[THE INVESTOR] ToolGen shares fell sharply on Sept. 11, wiping out over 224 billion won (US$198 million) from the company’s market cap over two days after news reports alleged that it stole patents relating to genome editing technology for curing genetic diseases from Seoul National University.
The stock plunged 14.9 percent as of 2:40 pm, after it lost 15 percent a day earlier.
The patent issue first emerged last week when daily newspaper Hankyoreh reported that Kim Jin-soo, founder and largest shareholder of ToolGen and former chemistry professor at Seoul National University, had filed global patents on a CRISPR-Cas9 technique claiming it solely developed the technology without consent from co-developer SNU.
The report noted that the company is making unfair profits by holding rights to the gene-editing technology, which may be worth hundreds of millions of dollars although Kim and his team had developed it during his tenure at the school with funding from National Research Foundation, a quasi-governmental organization.
Buoyed by patent protections in the US and Korea, investors are hoping that the technology will become a cash generator. ToolGen’s stock price explosively grew from 2,100 won in June 2014 when it went public and hit an all-time high of 173,700 won in March.
It is the largest KONEX-listed share with 583.8 billion won market cap.
In response, SNU announced it plans to launch an internal investigation and hire external experts for detailed analysis of the patents filed by the ex-professor.
“We will take necessary civil and criminal legal actions if we find that the rights of SNU have been violated,” a university official said.
ToolGen has refuted the media report in a statement claiming that it had signed an agreement to in-license the technology from SNU.
“There are no issues with SNU because ToolGen had signed the deal through lawful procedures,” the company said.
It said it made reasonable payments to SNU including funding for gene editing studies for five years from 2006 to 2011 and technology transfer fees as well as donation of 100,000 shares of common stocks in Toolgen.
The patent controversy may thwart the firm’s plan to move its shares to the KOSDAQ market this year. The firm was set for the listing under the so-called “Tesla standards,” a relaxed listing rule for promising companies that have not posted significant profits.
“There is a possibility that the application (for ToolGen’s listing) will be suspended or rejected depending on the severity of the case,” an official at Korea Exchange, the country’s bourse operator, said.
By Park Han-na (firstname.lastname@example.org)