South Korea's Celltrion dismisses Ghost Raven report as short-seller gambit

Incheon-based South Korean biosimilar company Celltrion has hit back at allegations from Ghost Raven Research, stating that the firm has used a shadow effort to question the company's accounting practices and related valuation.

Celltrion CEO Seo Jung-Jin

Details of the Ghost Raven Research report highlighted by the online version of Fortune said Celltrion was engaged in a "massive accounting fraud."

The claims, made anonymously, come as a Celltrion-Hospira Remicade biosimilar, Remsima, is approved and sold in Europe and in February, the U.S. FDA's arthritis panel voted in support of approval for the U.S. version as well as for psoriatic arthritis, Crohn's disease, ulcerative colitis and psoriasis. That has helped propel Celltrion to a market value approaching $11 billion. Hospira is now owned by Pfizer ($PFE).

In response, Celltrion released a statement that defended its biosimilar program and suggested the effort to discredit the company's financials was done to make gains by short-selling the shares.

"We believe that the short sellers of Celltrion stocks must have taken huge losses, and they are circulating these false reports to recover their damages," the statement said.

However, the Celltrion statement does not discuss the main contention in the Ghost Raven report, Fortune notes, that the parent company books revenues on sales to a subsidiary that has not been able to report its own figures on direct sales to customers or account for inventories, producing a gap in squaring accounts.

An indirect link was also drawn in the Fortune report over Celltrion's founder and CEO Seo Jung-Jin and the bankruptcy of Daewoo Motor where he worked and left shortly before its collapse.

- here's the story from Fortune
- and the statement from Celltrion on the Ghost Raven allegations
- and a related release on Remsima