[Click eStock] "Yuhan Yanghang, 'Reclaza' Approved for Combination Therapy in the US... Target Price Up"

KB Securities has raised the target price of Yuhan Corporation to 180,000 KRW. This outlook is based on the expectation of improved performance following the approval of the combination therapy of the lung cancer treatment drug Lazertinib (product name Rexarza) in the United States.

Im Hyo-young, Vice President of Yuhan Corporation, explaining about Reklaza
[Photo by Yonhap News]

Yuhan Corporation achieved sales of 598.8 billion KRW and an operating profit of 47.6 billion KRW in the third quarter of this year. Sales increased by 24% compared to the same period last year, and operating profit increased approximately 50-fold. Both results exceeded market expectations by 9% and 50%, respectively.

Hye-min Kim, an analyst at KB Securities, analyzed, "With the U.S. Food and Drug Administration (FDA) approving the combination therapy of Amivantamab and Yuhan's Rexarza, a milestone payment of 60 million USD (approximately 80 billion KRW) has started to come in, leading to increases in sales and profits."

Rexarza was the first domestically produced anticancer drug to receive FDA approval in the United States last August. Rexarza is a targeted anticancer drug that inhibits cancer cell proliferation and growth by interfering with the signal transmission of the epidermal growth factor receptor (EGFR), which is involved in lung cancer cell growth.

Analyst Kim stated, "Sales in the non-prescription segment of the pharmaceutical business also increased by 12.7% to 52.9 billion KRW," adding, "This increase in sales was due to the reflection of drug price hikes." She also explained, "The lifestyle health segment contributed to improvements in both sales and profitability."

However, she diagnosed, "The prescription drug segment saw a decline in sales and profits due to reduced prescriptions of in-hospital items at general hospitals caused by conflicts between medical and pharmaceutical sectors." She continued, "While the U.S. approval of Rexarza is a symbolic event, performance volatility may increase depending on drug prices and market share, so related strategies are necessary in this phase."