[Featured Stock] SK Biopharm Hits Upper Limit on First Day of Listing... 159% Increase from IPO Price 'Jackpot'

[Asia Economy Reporter Yoo Hyun-seok] SK Biopharm recorded the upper price limit from the first day of listing on the KOSPI. This represents a 159% increase compared to the public offering price.

As of the morning of the 2nd, SK Biopharm's stock price rose 29.59% (29,000 KRW) from the opening price of 98,000 KRW to 127,000 KRW. The opening price was set at 98,000 KRW, which is twice the public offering price of 49,000 KRW.

SK Biopharm was established in 2011 when SK's Life Science business division was spun off as a simple physical division. It is a company developing new drugs related to the central nervous system. The epilepsy treatment 'Xcopri' and the sleep disorder treatment 'Sunosi' developed by SK Biopharm have received final approval from the U.S. Food and Drug Administration (FDA) and have started sales in the United States. Both have completed technology transfer contracts with overseas pharmaceutical companies.

In the demand forecast conducted for domestic and overseas institutional investors, a competition rate of 835.66 to 1 was recorded. Additionally, in the subscription for general investors held on the 23rd and 24th of last month, a competition rate of 323 to 1 was recorded, attracting deposits amounting to 31 trillion KRW.

Among domestic securities firms, Samsung Securities and Eugene Investment & Securities set SK Biopharm's target price at 100,000 KRW and 110,000 KRW, respectively. Researcher Seo Geun-hee of Samsung Securities said, "The target price was calculated based on sales estimates in the U.S., Europe, and other regions for the pipeline including the epilepsy treatment new drug cenobamate (product name XCOPRI®) and the sleep disorder treatment new drug solriamfetol (product name SUNOSI®)."

He added, "It is difficult to expect short-term performance improvement due to marketing costs in the U.S. for cenobamate and solriamfetol and increased research and development (R&D) costs due to expanded indications, but listing in major large insurance companies, European approval, and milestone receipts from Avel Therapeutics are positive factors for the stock price."

Eugene Investment & Securities forecasted that SK Biopharm will achieve sales of 1.8 trillion KRW by 2030. Researcher Han Byung-hwa explained, "Since SK Biopharm is a company based on the massive industrial capital of the SK Group, there is no doubt about its growth. SK Biopharm's sales are estimated to be 46 billion KRW in 2020, 629.4 billion KRW in 2024, and 1.8 trillion KRW in 2030." He added, "Starting with direct sales of XCOPRI® in the U.S. in 2020, the company's sales are expected to grow at an average annual rate of about 45% until 2030."