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Sept. 28 (NBD) -- Genscript Biotech Corporation (Genscript) on Friday denied allegations of clinical data fabrication claimed by short seller Flaming Research in a statement.

Genscript halted trading in shares at 11:32 a.m. on Thursday following Flaming Research's accusation, seeing its stocks plummet 26.79 percent on the day to close at HK$11.86 (1.5 U.S. dollars).  

Trading resumed Friday morning. As of 1:50 p.m. of the day, Genscript shares bounced back by 14.67 percent.

Genscript was founded in New Jersey, the U.S. in 2002, and got listed in Hong Kong in 2015. The short seller rated Strong Sell on the biotech company at the target price of HK$3.29 (0.4 U.S. dollars).

In the report, Flaming Research questioned Genscript's capability in development and innovation of CAR-T cell therapy and charged the biochemical company with clinical data fabrication in its files submitted to the American Society of Clinical Oncology.

The report shows Genscript selectively disclosed the better data collected at the Second Affiliated Hospital of Xi'an Jiaotong University, one of the hospitals participating in Genscript's clinical trials, in order to misguide investors.

When reached for comments by NBD on Thursday, Genscript said Flaming Research's report contains many loopholes and is unsubstantiated, and it will make a clarification announcement as soon as possible.

In a statement released later on Friday morning, Genscript denied any wrongdoing claimed by the short seller, adding that Flaming Research's ultimate aims are to drive down its share price and undermine its reputation. The biotech firm is consulting its legal advisers and will consider taking legal actions against Flaming Research, according to the statement.

Genscript stated the company had neither information on nor any contact with Flaming Research before and after the short seller's report was published.

Little has been known about Flaming Research. The research company leaves only an email address on its website for contact. 

Email: gaohan@nbd.com.cn