Concerns over potential side effects of AstraZeneca PLC’s COVID-19 vaccine failed to dent the trading debut of its South Korean partner, SK Bioscience Co, which yesterday finished its first day of trading with a 160 percent gain, boosting its market capitalization to 12.9 trillion won (US$11.5 billion).
Following a record number of bids from retail investors for its US$1.33 billion initial public offering (IPO), shares of SK Bioscience soared by their daily limit to 169,000 won from the float price of 65,000 won.
The heavily subscribed IPO by SK Bioscience, the local manufacturer of AstraZeneca’s vaccine, is the largest domestic listing since game developer Netmarble Corp raised US$2.39 billion in 2017.
Photo: Bloomberg
It comes just a week after a hot US$4.6 billion New York share sale by e-commerce giant Coupang Inc drew attention to South Korean listings globally.
SK Bioscience’s debut comes as several EU countries, such as Germany and France, temporarily suspend the AstraZeneca vaccine rollout on worries about side effects.
While the WHO has said that the vaccine should continue to be administered, the European Medicines Agency was to provide a definitive assessment yesterday.
“It is difficult to tell exactly how much negative impact this will have on SK Bioscience,” analyst Douglas Kim said in a note on investment research network Smartkarma before its trading debut.
South Korea plans to inoculate 12 million people before July, with early batches of the vaccine relying mostly on AstraZeneca shots manufactured in SK Bioscience’s factory in Andong, South Korea.
SK Bioscience last month signed a licensing agreement with Novavax Inc to manufacture its COVID-19 vaccine in South Korea.
SK Bioscience is among numerous South Korean companies trying to ride the boom market after the country’s benchmark KOSPI soared 30 percent last year on a flood of retail buying.
Drugmakers and healthcare stocks were among the biggest winners since the start of the COVID-19 pandemic, although their stock price gains have lost steam this year.
SK Bioscience benefited from retail investors’ hunger for shares. South Korean mom-and-pop buyers poured in a record 63.6 trillion won to get their hands on SK Bioscience shares, beating the previous 59 trillion won in retail bids for last year’s US$321.5 million IPO by Kakao Games Corp, the gaming unit of South Korea’s leading messaging app, Kakao Corp.
Institutional investors, who made up 55 percent of the SK Bioscience IPO, also poured into the offering. Bids from institutional investors were oversubscribed by 1,275 times.
SK Bioscience has said that it is planning to use the IPO proceeds for research and development, as well as the construction of a plant to produce the next-generation pneumococcal vaccine in its pipeline, among other things.
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