Biotech stocks face a major decline crisis: FDA uncertainties combined with insider selling, Kangpei's stock price hits consecutive limit-downs

Kang Pei’s stock price has been plunging for consecutive days, with a short-term market capitalization loss of over 40 billion yuan within just two trading days. The number of sell orders on the limit-down board has accumulated to over 30,000 shares. What exactly is causing this significant decline in biotech stocks?

Double Blow Triggers Market Panic

The underlying trigger stems from the investor briefing held on September 9. Kang Pei announced that the Phase 3 clinical trial for its core weight-loss injection CBL-514 would be delayed by six months. The U.S. FDA recommended optimizing the quality of the Abdominal Fat Rating Scale (AFRS) used in the trial, requiring additional validation studies. CEO Ling Yufang emphasized that regulators did not question the drug’s design or efficacy, only demanding improvements in the scale’s quality—such as enhancing photo selection and expression methods to make it easier for subjects to be assessed.

What further worries the market is that internal insiders’ share disposals have become an invisible push factor lowering the stock price. According to data from the Public Information Observation Station, Kang Pei insiders have been selling more than they buy for three consecutive months: 137 shares sold in June (before the spin-off), 117 shares in July, and a total of 324 shares sold by four managers in August. Such signals of insider disposals are often interpreted by the market as warnings of insufficient confidence in the company’s prospects.

Postponement Brings Long-term Risks

Analysis institutions point out that delays in the new drug approval timeline have a tangible impact on valuation. If progress proceeds according to the new schedule, CBL-514 may not obtain approval in the U.S. until 2029, and the Asian market will also need to re-plan the Phase 3 trials. This means that Kang Pei, a biotech star company previously included in Taiwan’s Top 50 Index components, faces commercial variables far beyond expectations.

Kang Pei subsequently issued a clarification, stating that the delay in enrollment was an active choice to improve inspection registration success rates, not due to unsatisfactory trial data. However, market reaction to this statement was lukewarm, with the stock opening sharply lower and hitting the limit-down at 229.5 yuan on the 10th, and again hitting the limit-down at 207 yuan on the 11th. Investor pessimism has been firmly established.

What Are the Next Focus Points?

The company is negotiating licensing agreements with the world’s top ten pharmaceutical companies, hoping to accelerate commercialization through international cooperation. Market attention will focus on three aspects: whether Kang Pei can successfully complete scale optimization, progress in international licensing negotiations, and whether interim data analysis meets expectations. As a biotech company with a market value reaching hundreds of billions of dollars, any misstep in regulatory communication and progress management will directly impact investor confidence.