Medigen Biotechnology share prices continue to plummet
By John Liu, The China Post
August 11, 2014, 12:01 am TWN
Despite United Microelectronics Corporation's (聯電, UMC) recent acquisition of Medigen Biotechnology Corp. (基亞生技) shares, Medigen's stock price continued to plummet to NT$213.5.
Medigen's stock prices have been dropping for 10 straight days, resulting in a NT$31 billion loss in market value.
The company's share price was as high as NT$437.5 on July 23, giving it a market value of NT$60.68 billion.
As a new drug development company, Medigen has been developing a drug designated PI-88, which aims to treat early-stage carcinoma. The drug was expected to be the first one in its category to be approved by the FDA.
However, a test analysis revealed on July 27 pointed out that PI-88's medical effectiveness might have been overstated. The market has reacted negatively to the news. Medigen's share price began to plummet on July 28.
As Medigen share prices plummeted, investors had to seek out other ways to pay back the high-interest loans. They then sought to sell off other bio concept shares that are easier to trade, causing their prices to go down.
Analysts estimated that up to NT$4.8 billion worth of high-interest loans were doled out in the market for this purpose. Now that share prices have plummeted, creditors have lost a total of NT$1.6 billion.