Biotech firms use bonus points and share buybacks to please shareholders
The biotech trade is more and more adopting shareholder-friendly insurance policies, with Alteogen, Seegene and Hugel lately asserting free shares and share buybacks.
Earlier final month, Macrogen determined to offer money dividends for the primary time within the firm’s historical past. Dongkoo Bio & Pharma and HLB have mentioned they may even concern new free shares.
The most recent strikes are an obvious effort to maintain new shareholders joyful amid a bullish investor local weather within the biotech sector, spurred by a big rise in biotech inventory costs final 12 months.
On Wednesday, Alteogen introduced that it has determined to supply 0.5 new shares for one widespread share. The announcement got here eight months after the choice to supply one free share for one widespread share in July final 12 months. The corporate mentioned the free share issuance was geared toward restoring shareholder worth to current shareholders.
Alteogen mentioned it’ll concern a complete of 14,384,455 shares – 14,041,450 widespread shares and 343,005 convertible most well-liked shares (CPS). After the capital improve, the variety of peculiar shares of Alteogen and CPS can be 42,124,350 and 1,029,015 respectively. The corporate has set the reference date for the brand new allocation of shares on March 25 and itemizing date scheduled for April 12.
Alteogen expects bonus points to spice up liquidity and promote clean buying and selling within the inventory market.
“The capital improve by means of free shares is a part of our coverage of accelerating shareholder worth and return to shareholders. It is compensation for shareholders, ”mentioned Park Quickly-jae, CEO of Alteogen.
He mentioned his firm’s inventory costs have been dropping as a result of inadequate liquidity and distorted data, regardless of Alteogen’s licensing offers and optimistic medical outcomes from its pipelines.
Nonetheless, the corporate will look to the long run and full its ongoing initiatives to maximise shareholder worth, Park added.
On Tuesday, Seegene’s board of administrators set the agenda for the twenty first basic assembly of shareholders, the place shareholders are anticipated to introduce quarterly dividends.
Seegene is pushing for the introduction of the quarterly dividend system. Within the occasion of an IPO, Seegene shareholders will obtain dividends greater than twice a 12 months, as a substitute of every year, the corporate mentioned.
“If we are able to shut the shareholder record greater than twice a 12 months, as a substitute of as soon as on the finish of the 12 months, we’ll provide extra energetic and personalised investor relations actions for shareholders,” mentioned Kim Bum-joon, vp of company administration at Seegene. He added that such a system would additionally encourage an inflow of long-term traders preferring a secure move of funds.
Along with the final shareholders’ agenda, Seegene determined to repurchase its shares price 30 billion gained ($ 26.3 million) to recoup the losses in share costs and the undervalued worth of the corporate. .
The share buyback is geared toward virtually benefiting shareholders, Seegene mentioned. The corporate additionally plans to strategically use repurchased shares and 240,000 shares it at present owns sooner or later.
Hugel, which grew to become the primary Korean firm to enter the Chinese language botulinum toxin market final 12 months, additionally determined to purchase again 30 billion gained shares to extend shareholder and firm worth and stabilize costs. actions. The buyback program is legitimate till September 9 and Samsung Securities would be the supervisor.
The repurchase of Hugel shares is that this time the fourth. The corporate performed the three-round repurchase program, buying 87.4 billion gained price 240,000 treasury shares from 2018 to 2019. Amongst them, the corporate bought 100,000 shares. The corporate additionally issued two free shares for one peculiar share.
“Though Hugel has wonderful international competitiveness within the BTX trade, it has been grossly undervalued as a result of decline in inventory costs attributable to exterior elements,” mentioned a Hugel official. “The corporate determined to repurchase shares to enhance the undervaluation by means of the restoration in inventory costs and to point out our confidence within the continued progress of the corporate.”