[Click eStock] "Bionex, Evolving as a Bio CMO Company... 'Buy' Recommended"

Sangsangin Securities on the 21st upgraded the target price for Bionex to 34,000 KRW and newly issued a 'Buy' investment opinion, stating that the company is evolving from producing biopharmaceutical samples to a commercial biopharmaceutical CMO company.

Researcher Ha Taegi said, "Bionex is a company producing synthetic drugs (60% weight) and biopharmaceuticals (40% weight), and its future growth vision lies in biopharmaceuticals," adding, "Until recently, it has been producing clinical trial samples of biopharmaceuticals (CMO), but from 2025, commercial production will be in full swing, and sales and profits are expected to increase significantly."

He also evaluated, "Indirectly benefiting from the U.S. Biosecurity Act, the company is entering a stage of evolving into a global biopharmaceutical CMO specialized in medium-sized order volumes in the long term."

He expected that losses due to the upgrade of the Songdo plant would continue until the third quarter. Researcher Ha said, "The Songdo plant is currently being upgraded to cGMP level," and "The trigger was the preparation for CMO production of Celltrion's Actemra biosimilar; an FDA inspection was conducted in the third quarter, and approval is expected around January 2025."

He added, "As a result, biopharmaceutical sales decreased in the first half, fixed costs such as labor costs increased, and operating losses occurred," and "This situation is expected to continue until the third quarter of 2024."

However, it is anticipated that commercial bio CMO operations will start from the fourth quarter of this year, and production volume will increase in 2025.

Researcher Ha predicted, "Before Celltrion's Actemra biosimilar receives U.S. FDA approval, production for distribution inventory (for 2025) will occur in the fourth quarter of 2024, generating sales," and "From 2025 onwards, commercial sales will be generated steadily."

He further explained, "New PPQ volumes (17.4 billion KRW) for major domestic companies will be recognized as sales in 2025," and "The 5,000-liter line at the Osong plant will operate for PPQ volume production (estimated site change volume)."