[Click eStock] Boryung Pharmaceutical, Leaping Forward as a Cancer Drug Specialist

[Asia Economy Reporter Ji Yeon-jin] Shin Young Securities announced on the 15th that it raised the target price for Boryung Pharmaceutical to 24,000 KRW, reflecting this year's performance improvement and the equity value from Boryung VigenCell's KOSDAQ listing.

Boryung Pharmaceutical recorded sales of 117.9 billion KRW in the fourth quarter of last year, a 15.1% decrease compared to the same period last year, and an operating profit of 4.9 billion KRW, down 22.7%. The decline in operating profit is analyzed to be due to a decrease in contract manufacturing sales of antibiotics caused by strengthened personal hygiene due to COVID-19, the cost of acquiring exclusive domestic sales rights for NK/T cell lymphoma treatment from Boryung VigenCell, and an increase of about 1.5 billion KRW in depreciation expenses following KGMP approval of the cancer injection factory at the Yesan plant.

This performance decline is expected to recover as COVID-19 stabilizes. Regarding the Yesan plant, it is an investment aimed at transforming into a specialized anticancer drug company. Attention should be paid to the fact that sales of 23.9 billion KRW, a 15.9% increase compared to the same period last year, were achieved with the new launches of Dukaro and Akab among the main products in the Kanab family.

This year, sales are expected to reach 583.1 billion KRW, up 7.7% from the previous year, and operating profit is forecasted to increase by 17.8% to 47.5 billion KRW. Analyst Myungseon Lee of Shin Young Securities said, "The Kanab family’s sales will grow centered on the new Dukaro and Akab, and growth of other main products is also expected to continue." He added, "With the full-scale production of anticancer injections at the Yesan plant, cost ratio improvement can be expected through direct manufacturing of Lilly’s Gemzar, which was introduced long-term. In particular, synergy from joint immuno-oncology research and development with Boryung VigenCell and the in-house anticancer drug pipeline BP2002 is also anticipated as the company moves toward becoming a specialized anticancer drug company."