Shares in GlycoNex close 42 percent above IPO price

By Kevin Chen  /  Staff reporter

Wed, Dec 19, 2012 - Page 14

Shares in cancer-medicine developer GlycoNex Inc (台灣醣聯生技) closed more than 42 percent above their initial public offering (IPO) price during yesterday’s debut on the GRETAI Securities Market, after transferring their listing from GRETAI’s emerging board.

GlycoNex opened at NT$157 on the first day of trading on GRETAI, 48.11 percent higher than its IPO price of NT$106 and outperforming the over-the-counter index, which rose 0.50 percent. The stock ended at NT$151.5 after pulling back from an intraday high of NT$165.

The company, based in New Taipei City’s (新北市) Sijhih District (汐止), ended at NT$166.35 on the emerging board on Monday. The stock has risen 140.4 percent so far this year, according to the stock exchange’s data.

Established in 2001, GlycoNex’s core business is developing monoclonal antibody cancer drugs in their early stages and licensing them to pharmaceutical companies.

In 2009, the biotech firm transferred the technology to make the GNX-8 therapeutic drug, an antibody for treating colorectal cancer, to Japanese pharmaceutical company Otsuka Pharmaceutical for an initial payment of US$3 million.

The company will receive certain “milestone payments” of US$196 million during the various clinical trial stages and collect royalty payments based on the sales of the drug from Otsuka after it is put on the market, GlycoNex told a pre-IPO conference for investors last month.

Company chairman Tong Chang (張東玄) also told investors that GlycoNex aimed to develop one new drug every two or three years to grow revenue.

Last year, GlycoNex reported a net profit of NT$19.61 million (US$674,000), or earnings per share of NT$0.61, on a revenue of NT$79.56 million. That was compared with a net loss of NT$53.01 million, or NT$2.65 per share, on revenue of NT$10.21 million in the previous year.

Fubon Securities Investment Services Co (富邦投顧) forecast the company’s net profit would expand 533 percent to NT$57 million (NT$1.21 per share) next year, from NT$9 million (NT$0.2 per share) this year, after GNX-8 enters the first phase of clinical trials and predicted that the figure would increase to NT$308 million (NT$6.53 per share) in 2014 when the drug enters the second phase of clinical trials.

“We expect the company to receive a milestone payment of US$3 million next year after the GNX-8 enters its phase I clinical trial and another payment of US$15 million in 2014 when the drug enters its phase II clinical trial,” Fubon Securities analyst Heather Chang (張雅雯) said in a note yesterday. “There is a chance for the GNX-8 to go to the market in 2016, which we believe can bring in more than US$1 billion in future sales.”

Chang said GlycoNex would likely also receive between NT$40 million and NT$50 million in these two years from Mitsubishi Gas Chemical Co Inc, after the two sides in 2010 signed a technology-transfer deal including an initial payment of US$1.25 million and milestone payments of US$438 million.

Additional reporting by Camaron Kao