Despite Technology Transfer Announcements, Bio Stocks Remain Lukewarm... "Success Cases Needed"

Cynicism Pervades the Industry Itself
"Need for Technology Transfer Achievements and Direct Sales Cases in the U.S."

[Asia Economy Reporter Myunghwan Lee] Pharmaceutical and biotech stocks are lingering in a bearish market. Despite some companies announcing technology transfer agreements, their stock prices have struggled to gain momentum. Experts diagnose that domestic biotech firms are being ignored by investors as they fail to deliver substantial achievements.

According to the industry on the 25th, Alteogen, a domestic biopharmaceutical company, signed a technology transfer agreement for the subcutaneous injection-related core technology ‘ALT-B4’ with Sandoz, a subsidiary of Novartis, on December 30 last year. The contract size reached $145 million (approximately 183.9 billion KRW). ALT-B4 is a recombinant enzyme protein that breaks down hyaluronic acid, allowing drugs to penetrate human subcutaneous tissue and convert protein formulations from intravenous injections to subcutaneous injections. After the technology transfer news was announced, Alteogen closed at 39,600 KRW, up 3.53% on the first trading day, January 2. Although it once rose more than 10% during the session, it gave up most of the gains by the close. On the very next trading day, January 3, the stock fell 8.33%, closing at a price lower than before the announcement.

In contrast, stock prices reacted immediately to positive news excluding technology transfers. On the 11th, Osstem Implant announced that it won the largest volume in the Chinese authorities’ volume-based procurement (VBP) bidding for dental implants. HK Inno.N also announced on the 19th that its new drug for gastroesophageal reflux disease, ‘K-CAB’ (local product name ‘Taixinzan’), was listed on Chinese medical insurance. On the day these announcements were made, Osstem Implant closed up 9.38%, and HK Inno.N closed up 8.59%.

This is interpreted as stock prices responding only to short-term and visible revenue-generating positive themes. Despite the nature of biotech requiring long periods for research and development (R&D) and commercialization, stock prices move only on short-term positive news.

This is evaluated as a result of widespread cynicism toward the domestic bio industry itself, which has yet to produce tangible results. Halozyme, a U.S. biotech company that uniquely holds human hyaluronidase-based technology like Alteogen, has shown a steady upward trend as sales of its licensed products increase. As of the close on the 24th (local time) on the NASDAQ market, Halozyme’s stock price rose 52.79% compared to one year ago.

Kiwoom Securities researcher Hyemin Heo said, "Cynicism toward biotech is widespread," adding, "Successful cases of technology transfer leading to performance growth or domestic new drugs’ direct sales success in the U.S. seem essential." She also noted, "Phase 3 combination data that can gauge the future commercial success of Yuhan Corporation’s Lazertinib is expected to be announced this year," and "Attention should also be paid to whether SK Biopharm’s Xcopri sales acceleration speed increases."