Celltrion's minority shareholders ready proxy contest in protest to stock downfall

[Photo by Yonhap]

[Source: Celltrion’s minority shareholders]

Minority shareholders of South Korea’s biopharma heavyweight Celltrion are readying a proxy contest to pressure the management for endeavors to prop up the share prices that have plunged 45 percent from the peak in December by threatening to exit en masse from the company.

A group of Celltrion’s minority shareholders started a campaign last week to muster proxies from other minority shareholders after their demand for buyback and other aggressive stock-price boosting measures was rejected by the company in a recent meeting.

The minority shareholder group said Wednesday they already amassed some 14 million shares and plans to raise their votes to up to 50 million, which represent more than a third of the company’s outstanding shares, threatening to dump them if the management keeps neglecting their demand for endeavors to bolster the stock value.

Celltrion’s minority shareholders take up nearly 65 percent of the company’s rights issues. An extraordinary general meeting can be convened with more than 3 percent of shareholder votes under the country’s Commercial Code.

Celltrion lost 37 percent of its value this year in contrast to an increase of 2 percent in the price of entire Kospi shares and 6 percent in peer company Samsung Biologics. Against its peak of 396,239 won in December, it is off 45 percent.

Celltrion shares fell 12 percent this month alone due to a weak quarterly outlook. The market consensus for the company’s third-quarter operating profit is 204.7 billion won ($174 million), down by 16.55 percent from a year ago, according to FnGuide. Investor sentiment remains tepid amid news that MSD is preparing to launch an oral Covid-19 antiviral, a potential game changer over Celltrion’s intravenous injection therapy Rekirona. Celltrion reduced its capacity for lucrative biosimilar products to make room for the production of Rekirona, an analyst wrote.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]