MEDEZE Shares Plummet Amid Medical Council Warning on Stem Cells

MEDEZE Group Public Company Limited, a service provider for stem cell analysis, separation, culture, and storage, has seen its share price decline significantly following a warning from the Medical Council of Thailand regarding the use of stem cells.

MEDEZE’s shares were initially offered to investors at a price of 9 baht per share, with a P/E ratio of about 35 times. However, the company’s asking price or reserve price was considered expensive compared to stocks in the hospital group.

On October 15, MEDEZE shares debuted on the stock exchange, opening at 13.30 baht and peaking at 13.80 baht before being sold down to a low of 10.60 baht. The shares eventually closed at 11.20 baht, 2.20 baht above the reserve price, with a trading value of 4,166.95 million baht.

However, in the following trading days, MEDEZE shares lost steam, and the price weakened, moving around 1 baht for several days. The Medical Council of Thailand’s warning that stem cells can only be used to treat certain diseases that the Medical Council can treat, such as hematology and ophthalmology, further impacted the company’s shares.

The warning also stated that using stem cells outside of approved diseases, such as in beauty treatments, may be against the law. This directly affects MEDEZE, as its main business is stem cells, and investors are worried about the earnings outlook.

As a result, MEDEZE shares fell below the reserve price for the first time on October 31, closing at 8.85 baht. The shares continued to decline, dropping another 5 satang to close at 8.80 baht on November 1, with a low of 8.30 baht during trading hours.

The Medical Council’s warning has led to a reevaluation of the limitations of MEDEZE’s stem cells business, which will impact revenue generation trends and operating results. The company’s P/E ratio remains high, at 34 times, which is higher than the average of stocks in the hospital sector.

MEDEZE shares have been expensive since the initial price was set, and the use of stem cells was a major selling point. However, the Medical Council’s warning has reduced the appeal of MEDEZE shares, and the company’s stock price has absorbed the bad news.