[Asia Economy Reporter Oh Ju-yeon] SK Securities analyzed on the 10th that Yuhan Corporation's fourth-quarter earnings are expected to show high growth following the milestone (stepwise technology fee) inflow, as in the third quarter.
Researcher Lee Dal-mi stated, "Once the administration for the Phase 3 combination clinical trial of Lazertinib begins, additional milestone inflows are expected in the fourth quarter of 2020," adding, "Even if delayed, the inflow is expected by the first quarter of 2021, and strong performance is anticipated accordingly."
Lee mentioned that the milestone expected in 2021 includes a $10 million milestone related to the clinical entry of the NASH treatment exported to Boehringer. However, she assessed that in 2021, performance improvement in previously underperforming business divisions is more anticipated than milestones.
Lee said, "Regarding the previously underperforming API, most are currently AIDS treatments for Gilead, but sales growth from additional contracts is expected starting next year," and added, "Projects for additional contracts are currently underway. Therefore, Yuhan Chemical, which had been struggling with deficits, is expected to reach the break-even point (BEP) level in 2021, which is positive."
SK Securities raised Yuhan Corporation's operating profit forecasts for 2020 and 2021 by 23.1% and 11.6%, respectively, and increased the target stock price from KRW 74,000 to KRW 86,000. The investment opinion was maintained as 'Buy.'
Researcher Lee stated, "As the clinical trials of the technology-exported pipelines such as Lazertinib and the NASH treatment proceed smoothly, milestone inflows and the performance of previously underperforming business divisions are bottoming out and turning around, making it the most preferred company among traditional pharmaceutical companies."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
