BlackRock takes 5% stake in HLB amid FDA review

BlackRock, the world’s largest asset manager, has become the second-largest shareholder of Korean biotechnology firm HLB, amid the US Food and Drug Administration's review of its liver cancer drug.

According to HLB’s regulatory filing on Tuesday, BlackRock Fund Advisors had acquired 6,664,921 shares of HLB, or a 5.01 percent stake, as of Feb. 24. The filing stated that the on-exchange stock purchase was made under a simple investment purpose.

Jin Yang-gon, founder and chair of HLB, owned a 7.23 percent stake in HLB as its biggest shareholder as of the third quarter last year, according to the company’s quarterly report.

As companies are required to issue a notice when an investor’s holdings surpasses 5 percent, it remains unclear how much exactly BlackRock paid for the HLB stock. When the regulatory filing requirement was fulfilled on Feb. 24, the stock price of HLB was 52,600 won ($35.50) as of that day’s market closing.

Despite the latest lump sum stock purchase by BlackRock, shares of HLB fell on Wednesday, as the two main Korean bourses — the Kospi and Kosdaq — continued to slip, amid the ongoing conflict in the Middle East in the wake of US-Israeli strikes on Iran that began last weekend. HLB, which is listed on the Kosdaq, ended the day at 45,700 won per share, down 15.53 percent from the previous day’s closing.

HLB’s relations with BlackRock as an investor date back to December 2020, when the global asset manager purchased a 5.07 percent stake in HLB, marking the first time that BlackRock’s share in the company surpassed 5 percent.

Market watchers estimate that BlackRock’s average purchasing price of HLB was somewhere between 150,000 won and 200,000 won per share, given the firm’s stock price at the time. BlackRock later gradually began to sell its HLB shares, eventually selling all of them after 2021.

As for the reason BlackRock repurchased HLB stock, industry sources pointed to the ongoing review of Rivoceranib, HLB’s liver cancer drug candidate, by the US Food and Drug Administration. An FDA decision is expected to be announced on July 23. HLB has previously come up short twice in obtaining FDA approval for Rivoceranib.