CMG Pharmaceutical is moving forward with a 10-for-1 stock consolidation to alleviate concerns about being designated as a management risk.
On August 12, CMG Pharmaceutical announced that it plans to hold an extraordinary general meeting on September 2 to vote on a proposal to consolidate ten common shares with a par value of 500 won into one common share with a par value of 5,000 won.
If the stock consolidation is approved, trading will be suspended from October 1 to October 26, with the consolidated shares expected to be listed again on October 27.
CMG Pharmaceutical has received a warning from the Korea Exchange regarding management risk after its stock price remained below 1,000 won for 25 consecutive trading days.
According to current KOSDAQ regulations, a company is designated as a management risk if its common stock closes below 1,000 won for 30 consecutive trading days. As of August 5, CMG Pharmaceutical recorded 25 consecutive days below this threshold. If the stock price does not recover in the next five trading days, the company faces the risk of being designated as a management risk.
In response, CMG Pharmaceutical aims to secure an appropriate number of outstanding shares and create a stable trading foundation through the stock consolidation. The total number of issued shares will decrease from 148,123,556 before the consolidation to 14,812,355 after, while the market capitalization and shareholder equity will remain unchanged.
Alongside the stock consolidation, CMG Pharmaceutical plans to enhance its business competitiveness and increase corporate value through ongoing research and development (R&D), expansion of new products, and external business partnerships.
In the field of new drugs, the company is accelerating the development of three small-molecule drugs: a next-generation lung cancer treatment, an osteoarthritis treatment, and a new mechanism hair loss treatment. In the formulation sector, it aims to strengthen product competitiveness focusing on combination drugs and improved new drugs.
In the area of orally dissolving films (OSF), CMG Pharmaceutical is pursuing the commercialization of products utilizing its proprietary formulation technology both domestically and internationally, and plans to expand its prescription drug business.
Lee Joo-hyung, CEO of CMG Pharmaceutical, stated, "This stock consolidation is a measure to secure an appropriate number of outstanding shares and create a stable trading foundation. We will strengthen our business competitiveness and profitability to achieve tangible management results."
Meanwhile, CMG Pharmaceutical, along with several other KOSDAQ biotech companies such as Abion, Lab Genomics, Noeul, Chaperon, and Moa Life Plus, has received warnings about management risk after their common stock prices fell below 1,000 won for 25 consecutive trading days.
Since the implementation of the 'penny stock exit system' promoted by financial authorities, there has been a surge in warnings about management risk, prompting pharmaceutical and biotech companies to take urgent measures to defend their stock prices and pursue stock consolidations.
* This article has been translated by AI.
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