[Click eStock] "Cell Biotech, Developing Treatments for Colorectal Cancer, Obesity, and Diabetes"

On the 8th, KB Securities analyzed that Cell Biotech is expected to start with probiotics and expand to innovative new drug development for colorectal cancer as well as treatments for obesity and diabetes.

Founded in 1995, Cell Biotech is engaged in the manufacturing and research and development of probiotic lactic acid bacteria products, as well as new drug development. As of 2022, it accounted for 35.5% of the domestic probiotic export value of 63.8 billion KRW, achieving the top position in domestic probiotic exports for 10 consecutive years.

Researcher Lim Clinical-guk of KB Securities stated in the report, "Cell Biotech's attempt at a structural transformation into a bio company based on the solid cash cow of probiotics is very innovative," and analyzed, "Multiple momentum factors such as entry into the Chinese market, excellent financial structure, and attractive valuation are also positive."

Cell Biotech's next growth momentum is the oral colorectal cancer treatment bio new drug development project ‘PP-P8’ utilizing probiotics. Through securing the core technology of the anticancer agent ‘P8’ and elucidating the mode of action of PP-P8, the domestic clinical phase 1 IND approval for the colorectal cancer new drug PP-P8 was completed in March. Phase 1 clinical trials are expected to begin in October.

Researcher Lim said, "As the world's first colorectal cancer treatment using live lactic acid bacteria, if phase 1 clinical trials succeed and therapeutic effects on metastatic colorectal cancer are confirmed in phase 2, it could be designated as an orphan drug," and predicted, "It may also be possible to market before phase 3."

Additionally, new entry into the Chinese probiotics market is expected to be an additional growth driver. China still has only a 20% penetration rate of functional foods, and the probiotics market size is growing annually by 11-12%, making it a market with great potential.

Researcher Lim analyzed, "Continuous sales growth is expected based on increased exports and expanded distribution networks, and significant profitability improvement is anticipated this year through cost reductions such as marketing expenses," adding, "As of the end of Q1 this year, the retention ratio is 2791%, cash equivalents are about 70 billion KRW, and the financial structure is very sound with no borrowings."