[Click eStock] "SK Biopharm, Target Price Raised by 11.5%"

On the 11th, Korea Investment & Securities raised the target price of SK Biopharm to 145,000 KRW, an increase of 11.5%, while maintaining a buy rating.

They recorded sales of 136.6 billion KRW and operating profit of 19.3 billion KRW, meeting consensus expectations. US sales of Xcopri reached 113.3 billion KRW. Although sales at the end of September were sluggish due to the hurricane impact, growth continued thanks to strong sales at the beginning of the quarter.

The number of prescriptions in September this year was 31,000, still growing faster compared to competing products. Meanwhile, most of the finished product sales planned for this year were recognized in the third quarter, which increased costs and resulted in a gross profit margin of 87.9%.

Sales for this year are expected to reach 541.2 billion KRW, with operating profit at 89.9 billion KRW. Compared to previous estimates, sales were raised by 4.3% and operating profit by 7.8%. In the fourth quarter, milestone payments from partners and recognition of deferred Xcopri sales due to the hurricane impact are expected. Xcopri sales are projected at 440 billion KRW. The visibility of achieving the guidance of 320 million USD has significantly increased. Meanwhile, the gross profit margin for the fourth quarter is expected to be 93%, due to the high margin from Xcopri and milestone payments. Although development costs will increase in 2025 with the start of marketing clinical trials, the investment is expected to pay off with increased Xcopri sales after the Briviact patent expires in the second half of 2026, which is seen as a positive factor.

The target price was raised by 11.5% to 145,000 KRW. Xcopri sales for 2027 were raised by 4% to 859 billion KRW (a 25% growth compared to 2026). Applying a target PER of 43 times (the average 24F PER of pharmaceutical companies selling new drugs in the US or with potential US market entry) to the present value of 2027 net profit of 259.5 billion KRW, SK Biopharm’s fair market capitalization is estimated at 11.3 trillion KRW. Researcher Wi Hyeju of Korea Investment & Securities said, “Although the marketing clinical trial design is not yet known, if the efficacy and safety of Xcopri are directly compared with competing drugs, it will be easier to persuade clinicians,” adding, “In fact, the success strategy of some blockbusters is to present head-to-head clinical trial results.”