Lemon Healthcare Rebounds to Limit-Up on Second Trading Day; D&D Pharmatech, PharmaResearch Also ...

[Hong Ju-yeon, Edaily Reporter] South Korea's pharmaceutical and biotech sector posted broad gains on Tuesday despite heightened market volatility that triggered a sell-side sidecar on the benchmark stock market early in the session.

Lemon Healthcare, which closed below its initial public offering (IPO) price on its market debut the previous day, staged a dramatic turnaround by hitting the daily upper trading limit on its second trading day. Shares of D&D Pharmatech and PharmaResearch also finished sharply higher.

Lemon Healthcare share price trend (Data=Naver Finance)

Lemon Healthcare rebounds to daily limit after first-day drop below IPO price

According to KG Zeroin MP Doctor, Lemon Healthcare closed at the daily upper limit of 12,220 won, up 2,820 won from the previous session. The closing price was 22.2% above its IPO price of 10,000 won. The stock remained highly volatile during the session, however, falling as much as 14.8% to 8,520 won at one point.

On its debut the previous day, Lemon Healthcare surged to as high as 20,300 won, more than double its IPO price, shortly after trading began. The stock later erased all of its gains and ended its first trading day at 9,400 won, down 6% from the offering price.

Market participants attributed Monday's limit-up rally to bargain buying following the previous day's sharp decline.

Lemon Healthcare operates a two-way medical data brokerage platform that connects participants in the healthcare data ecosystem, including hospitals, patients, insurers and pharmaceutical companies, in real time.

Based on its core Lemon Digital Bridge (LDB) technology, the company operates LDB-H, a smart hospital service used under contracts with 38 of South Korea's 47 major tertiary hospitals, as well as LDB-E, a reimbursement claim service for private indemnity insurance.

The company plans to use proceeds from its IPO to build infrastructure for the distribution and trading of medical data for artificial intelligence training and to further upgrade its existing services.

"Through our KOSDAQ listing, we will further strengthen the competitiveness of our medical data brokerage platform and accelerate the development of infrastructure for distributing and trading AI training medical data, establishing ourselves as a company that connects the medical AI ecosystem," Chief Executive Hong Byung-jin said.

D&D Pharmatech share price trend (Data=Naver Finance)

D&D Pharmatech ends up 12.4% amid volatile trading

D&D Pharmatech closed at 85,300 won, up 9,400 won, or 12.38%, from the previous session. During the day, the stock traded between a high of 91,900 won and a low of 72,600 won, showing large price swings. Regarding the share price increase, a company official said, "There is no specific reason. It appears to reflect expectations for a potential big deal in the future."

The market is expecting D&D Pharmatech to sign a license-out deal for its metabolic dysfunction-associated steatohepatitis (MASH) treatment candidate DD01 within this year. DD01 is a dual agonist targeting both glucagon-like peptide-1 (GLP-1) and glucagon (GCG) receptors, with a mechanism designed to improve fatty liver disease through weight loss and blood glucose control. At the European Association for the Study of the Liver (EASL) conference in late May, D&D Pharmatech presented Phase 2 results showing that DD01 achieved statistical significance on key endpoints. The company expects to receive the clinical study report (CSR) for DD01 in the third quarter.

Brokerages also view DD01 as having strong bargaining power for a licensing deal. In a report published last month, Huh Hye-min, an analyst at Kiwoom Securities, said, "As the only late-stage MASH asset in the global market that has successfully completed a Phase 2 trial and is capable of being licensed out to big pharma, DD01 is in a favorable negotiating position." She added, "Compared with Boston Pharmaceuticals' efimosfermin, which was licensed to GSK in a deal worth a total of $2 billion (3.03 trillion won) after completing Phase 2, DD01 demonstrates comparable or superior histological outcomes, including liver fat reduction (-68.2% vs. -49%), MASH resolution (57% vs. 39%) and fibrosis improvement (34% vs. 24%)."

The company previously said, "Our primary goal is to find the partner that can develop and commercialize the product globally in the fastest and most efficient manner. Companies currently in discussions have developed a greater understanding of the asset, and we are comprehensively considering both the partner best suited for product development and the terms most favorable to the company."

PharmaResearch share price trend (Data=Naver Finance)

PharmaResearch climbs 8.4% on back-to-back positive developments

PharmaResearch closed at 340,500 won, up 26,500 won, or 8.44%, from the previous session. The gain is interpreted as reflecting growing expectations for future earnings following a series of positive developments. A PharmaResearch official said, "Various factors, including recent market conditions and investor sentiment, appear to have worked together, but we cannot attribute the move to any specific issue."

Brokerages are also optimistic about the resumption of PharmaResearch's earnings momentum. Domestic medical device sales in the first quarter reached 58.4 billion won, declining only 2.2% from the previous quarter despite lower spending by foreign visitors in January and February, supported by increased domestic demand and an expansion in medical specialties. Kang Eun-ji, an analyst at Korea Investment & Securities, said, "PharmaResearch's domestic medical device sales in the second quarter are expected to increase by more than double digits from the first quarter, driven by solid domestic demand and a recovery in demand from foreign visitors." The cosmetics business, which posted solid growth in both domestic and overseas channels during the first quarter, is also expected to continue its strong performance, supported by the expansion of TikTok sales channels in Southeast Asia and entry into offline distribution channels in the United States beginning in the second quarter.

In line with this, PharmaResearch signed an agreement on June 30 to acquire CG USA, a cosmetics OEM and ODM company based in California. The acquisition secures a local production base in North America, enabling the company to respond more effectively to growing demand for Rejuran cosmetics through Sephora and Amazon. The company also plans to enter the Canadian market in the second half of the year, accelerating its expansion across North America.

Son Ji-hoon, chief executive officer of PharmaResearch, said, "The acquisition of CG USA is a strategic decision aimed at strengthening supply stability and building a foundation for business expansion in the North American market. Leveraging local production capabilities and quality infrastructure, we plan to continue enhancing the competitiveness of our global derma cosmetics business."