[Click eStock] "Celltrion Healthcare, Positive News for Remsima... 60% Sales Growth Expected This Year"

Hana Financial Investment Report, Target Price Up 24%
Q2 Operating Profit Up 624% Year-on-Year

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained its buy rating on Celltrion Healthcare on the 14th and raised the target price by 24% from the previous level to 140,000 KRW.

In the second quarter, the company is estimated to have recorded sales of 418.4 billion KRW and operating profit of 67 billion KRW, increasing by 17% and 624% respectively compared to a year ago. Inflixtra for the US market generated an average of 25 billion KRW per quarter last year, resulting in annual sales of over 100 billion KRW, but this year, sales are expected to reach around 200 billion KRW.

Prescription data for Truxima in June showed a 13.1% share, up from 10.4% in the previous month. Its share is increasing at a similar pace to Kanjinta, and if this trend continues, Truxima's share is expected to expand to 30% by the end of the year. US sales of Truxima are estimated to be about 106.8 billion KRW per quarter. Annual sales of Truxima for the US market are expected to exceed 400 billion KRW this year.

On the 25th of last month, Remsima SC received a recommendation for approval from the European Medicines Agency (EMA) Committee for Medicinal Products for Human Use for an additional indication for inflammatory bowel disease. This is the second indication obtained after approval for rheumatoid arthritis in November last year. Since Remsima SC is not a simple biosimilar, unlike general biosimilars that apply indication extrapolation, it must obtain approval through clinical trials for each indication.

Minjung Sun, a researcher at Hana Financial Investment, said, “Considering that the original product Remicade’s prescription share for inflammatory bowel disease increased overwhelmingly to 63% before patent expiration, market expectations for Remsima SC should be focused on full-scale growth due to the additional indication for inflammatory bowel disease,” adding, “Considering that final marketing approval is obtained two months after the recommendation, approval is expected in August.”

Until the second quarter, Remsima SC was launched with an indication limited to rheumatoid arthritis only in the UK, Germany, the Netherlands, and Ireland, but with approval for inflammatory bowel disease in the third quarter, it is expected to be launched in large markets such as France, Italy, and Spain.

This year, Celltrion Healthcare is expected to achieve high growth with double-digit quarterly sales growth. Annual sales are expected to reach 1.8 trillion KRW, a 65% increase from the previous year. Researcher Minjung Sun forecasted, “Despite selling and administrative expenses increasing by more than 40% year-on-year due to the establishment of an overseas direct sales system, operating profit margin is expected to record 16% annually due to leverage effects.”