KOSDAQ Pharma Stocks Plunge 10.5% in One Month, Worst Among Major Sectors

The pharmaceutical sector on the KOSDAQ market experienced the most significant decline among major industries over the past month, plummeting 10.51%. This sharp drop outpaced the declines in other sectors, with general services falling 8.08%, finance down 7.44%, and paper and lumber declining 5.01%. Year-to-date, the KOSDAQ pharmaceutical sector has seen a 36.65% decline, ranking fourth in losses.

The pharmaceutical and biotech stocks' underperformance contrasts sharply with the rise of semiconductor materials, parts, and equipment stocks, which led market gains. In contrast, other sectors such as machinery and equipment and electrical and electronics saw gains of 14% and 10.28%, respectively. Investor funds have concentrated in these sectors, leaving pharmaceutical stocks sidelined due to limited capital and investor flows.

The global trend of rising interest rates further pressured pharmaceutical stocks, viewed as growth stocks. Increased policy rate hikes by central banks, including the Bank of Korea, the U.S., and Japan, have heightened concerns over discount rates applied to future value, impacting the sector's credibility. Company-specific issues, such as the termination of Orum Therapeutics' technology transfer agreement after Bristol Myers Squibb discontinued Phase 1 clinical development, and allegations of insider trading at ABL Bio, have further exacerbated the sector's decline.

Analysts predict that investors will become more selective in their stock choices, focusing on corporate fundamentals due to the postponed KOSDAQ promotion and relegation system.