Chinese plastic surgery promoter So-Young International Inc. (Nasdaq: SY) said it had unlisted banned drugs and deleted related fake reviews from its platform, still seeing its stock plummeted Monday.
The Beijing-based company indicated that it formed the internal investigation team immediately responding to the allegation that So-Young allowed unlicensed neurotoxic protein and fake reviews according to Chinese media.
Some medical institutions in the platform of So-Young were selling banned botulinum toxins, at a price far lower than the market price, according to the Beijing News. Beijing Kairunting Medical Beauty Hospital sold Hengli at 99 yuan, or $15, per 20 units for the drug made in China, and 299 yuan, or $44 per 20 units for that under the U.S. brand named Botox.
The toxin is used commercially in medicine, cosmetics and research, especially for reduction of facial wrinkles. The recommended dose is 100 units, which is the maximum recommended dose.
Wrinkle-reducing products in So-Young’s brand list contain five unlicensed brands from South Korea apart from two only authorized products of Hengli and Botox.
“There will be no drug testing service, but we can offer you the refund if you don’t trust us,” a doctor in the hospital said to the journalist on July 10th.
So-Young said the reported illegal drugs sold on the new oxygen platform came from Korean medical and aesthetic institutions in its official statement.
“Although these drugs have not obtained the certification from China Food and Drug Administration, but they are legal in Korea and So-Young informed customers of the drug compliance status,” So-Young added.
The hospital didn’t offer human placenta injection in So-Young but it said it offered the injection for $8800 each injection in person according to the Beijing News.
China’s drug regulatory authorities have never approved the production of human embryonic and cosmetic drugs such as human placenta, nor have they approved the importation of placental products, according to Chinese regulation.
“These products are now off the shelves,” So-Young said in the statement.
So-Young was also reported to fail to detect fraudulent reviews. The company said it had deleted more than 710,000 suspicious accounts, 150,000 posts and 2.32 million comments totally in the past year. Looking ahead, the company said it will launch its AR Face Recognitio system to improved its security and auditability.
The Chinese medical aesthetic service promoter was welcomed by the Wall Street in its debut on May 2, raising $179.4 million in its IPO. So-Young markets the products and services performed of approximately 4,000 medical aesthetic service providers as of Dec. 31 in 2018, according to its prospectus.
Shares in So-Young were trading at $15.24 per American depositary share, down 9 percent intraday Monday.