Investing in biotech stocks can offer high returns, but there are significant risks involved. Particularly, false and exaggerated information can mislead investment decisions. Recently, the cases of Qurient and HLB highlight these risks.
1. The Qurient Case: Exaggerated Licensing Achievements
In October 2021, Qurient announced a technology transfer agreement with Europe’s leading ophthalmology company, claiming the deal was worth 2.3 trillion won. However, the disclosed details showed an upfront payment of $6 million (about 7 billion won) and milestone payments of $157.5 million (about 183.7 billion won). Qurient explained that this amount included royalties based on future sales, despite not completing Phase 1 clinical trials. This exaggerated announcement greatly disappointed investors.
2. The HLB Case: Subjective Interpretations and False Disclosures
HLB faced investigations by financial authorities and prosecutors due to premature optimism and subjective interpretations. In June 2019, HLB announced that the clinical results of Rivoceranib were disappointing. However, just three months later, in September, they surprisingly claimed success in Phase 3 clinical trials. These conflicting announcements caused significant confusion among investors, and the Financial Services Commission deemed it a false disclosure and referred the matter to the prosecution.
3. The Need for Cautious Investment Approaches
While biotech stocks promise high returns, they also carry high risks. Instead of relying solely on corporate announcements or disclosures, it is crucial to thoroughly analyze the underlying data. Additionally, consulting with reliable experts is a good strategy. Such cautious approaches can reduce investment failures and lead to successful investments.
4. Conclusion: Avoid Being Misled by Exaggerated Information
The cases of Qurient and HLB clearly illustrate the risks of exaggerated information in biotech stock investments. Investors should not be misled by such information and must always make cautious decisions based on actual data. This is the first step toward successful investing.