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Medigen shares continue to plummet after drug fails trials

TAIPEI, Taiwan -- Shares of Medigen Biotechnology Corp. (基亞生技) extended their losses Friday, falling by the maximum daily decline of 7 percent for the 15th consecutive trading session after its new liver cancer drug failed clinical trials, dealers said.

The Securities and Futures Bureau under (證券期貨局) the Financial Supervisory Commission (FSC, 金融監督管理委員會) yesterday said that its new rules to regulate the information disclosure of certain industry sectors listed on Gre-Tai Securities Market — a.k.a. the over-the-counter market — are now on the drawing board, with an aim at reducing information asymmetry.

The stock encountered heavy downward pressure soon after the local market opened, and selling continued until the end of the trading session amid lingering concerns over Medigen's efforts to develop a new cancer drug, dealers said.

The losses suffered by Medigen shares also showed weakening market sentiment toward the local biotechnology sector, they added.

Shares of Medigen dropped 7 percent to close at NT$150.00 (US$3), with 28,000 shares changing hands on the Taiwan Stock Exchange. The weighted index ended down 0.25 percent at 9,206.81.

Even after Friday's sell-off, more than 11 million orders were placed by investors to sell Medigen shares, indicating that the stock may drop further over the next few sessions, analysts said.

Heavy selling of the stock has emerged since Medigen reported on July 27 that its new liver cancer drug— PI-88 — had failed interim analysis in clinical trials.

The report has badly undermined investors' confidence in Medigen. The company has strongly denied news reports that the development of the liver cancer drug was just a scam.

At a Medigen news conference Thursday, several local biotech experts endorsed the company's efforts to develop the new drug but this has had little effect on investors' outlook, analysts said.

Medigen's market capitalization has been cut by NT$40 billion since its share price fell 66 percent over the past 19 trading sessions.

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