Celltrion Continues Growth with New Product Launch

[Asia Economy Reporter Koh Hyung-kwang] Hana Financial Investment has raised the target price for Celltrion, which achieved strong performance in the second quarter, to 363,000 KRW and maintained a 'Buy' investment rating, stating that growth will continue with the launch of new products.

Minjung Sun, a researcher at Hana Financial Investment, said, "Celltrion posted an earnings surprise in the second quarter of this year, significantly exceeding consensus estimates," and analyzed, "This was due to the increased production efficiency as the expansion of Plant 1, completed at the end of last year, began full-scale operation from the second quarter." She added, "The profit margins, which were sluggish in the fourth quarter of last year and the first quarter of this year, were resolved all at once as plant operations normalized, and from now on, Celltrion's standalone operating profit margin is expected to exceed 45%."

Celltrion announced on the 7th that its consolidated operating profit for the second quarter of this year was preliminarily estimated at 181.8 billion KRW, a 118% increase compared to the same period last year. Sales reached 428.8 billion KRW, up 82.5%. Both operating profit and sales are the largest quarterly figures to date, with an operating profit margin of 42.4%.

Researcher Sun predicted that Celltrion's growth momentum will continue. He stated, "For biosimilars, if the growth of existing products slows down, the manufacturer's top-line growth rate also slows, so continuous new product launches are necessary for sustained growth," and added, "Celltrion's Remsima SC has received approval in Europe for all indications except pediatric indications and is scheduled to be actively sold in the European market from the third quarter. Regarding the Humira biosimilar, the approval application was submitted in Europe last March, and it is expected to launch in 2021."

He also explained, "In addition, the Phase 3 clinical trial for the biosimilar of Xolair, the market leader in asthma and urticaria sales, began last month, and the Phase 1 clinical trial for the biosimilar of Stelara, the number one product in the psoriasis market, started in June," adding, "Among big players, Celltrion is the first to develop both products, and furthermore, the new drug for the treatment of COVID-19 entered Phase 1 clinical trials last month in Korea and the UK."