[Click eStock] "Yuhan Yanghaeng, Attention on Other Candidate Substances Besides Lazertinib"

KB Securities Report

[Asia Economy Reporter Minji Lee] KB Securities maintained a buy rating and a target price of 75,000 KRW for Yuhan Corporation on the 2nd. This is based on the expectation of positive results not only from Lazertinib but also from other candidate substances.

Yuhan Corporation recorded sales of 410.9 billion KRW and an operating profit of 6.1 billion KRW in the first quarter. Sales increased by 8.4% compared to the same period last year, but operating profit fell by 56.1%. While sales met expectations, profits fell significantly short of forecasts. By segment, the pharmaceutical business grew by 8.7%, the lifestyle distribution business by 19.1%, the overseas business by 65%, and the special business by 61.5% compared to the same period last year.

However, the operating profit margin was weak at 1.5%. This was due to technology royalty income dropping by 14 billion KRW from the first quarter to 1.5 billion KRW, and a significant increase in advertising expenses for the new probiotic product Wisebiome and the pet business.

The largest value driver for the company, Lazertinib, is scheduled to update results from the Phase 3 monotherapy clinical trial and the combination clinical trial with Amivantamab this year. It is time to pay attention to other candidate substances besides Lazertinib. YH12852, a treatment for functional dyspepsia licensed to Processa Pharmaceuticals, recently began patient dosing in the Phase 2a clinical trial, and YH14618, a degenerative disc disease treatment developed by Spine Biopharma in the U.S., has passed Phase 2 and is confirmed to enter Phase 3.

Additionally, the initiation of Phase 1 clinical trials for the bispecific antibody YH32367 introduced from ALBIO, and the completion of Phase 1a clinical trials for the NASH treatment YH25724 being conducted by Boehringer Ingelheim, are also promising. KB Securities analyst Taehee Kim said, “The performance of candidate substances developed by Gilead, Boehringer Ingelheim, Spine Biopharma, and the potential for technology transfers of new pipelines are investment points. However, due to increased advertising expenses for new businesses, the performance momentum this year may be weak.”