[Click eStock] "Generic Competition Concerns Eased... HK Innoen Target Price Raised by 15%"

On June 9, DS Investment & Securities raised its target price for HK Innoen from 53,000 won to 61,000 won. This adjustment comes as uncertainty regarding the entry of generics into the US market has been removed, just as HK Innoen is preparing to enter the United States.

On June 7 (local time), the FDA approved the extension of the patent exclusivity for competitor Phathom's P-CAB-based gastroesophageal reflux disease treatment, "Voquezna," until 2032.

The extension of Phathom's exclusivity was a key variable for HK Innoen's "K-Cab" gaining market share in the US. Currently, Voquezna is the only P-CAB-based drug available in the US. With the patent extension, the launch of generics will be delayed, making it highly likely that K-Cab will become the second P-CAB-based drug in the US market.

HK Innoen has completed Phase 3 clinical trials for K-Cab in the US. The company plans to submit a New Drug Application to the FDA for two indications?erosive esophagitis and non-erosive esophagitis?in the fourth quarter of this year. If all goes as planned, K-Cab could be launched in the US as early as next year.

Kim Minjeong, a researcher at DS Investment & Securities, stated, "Following this approval announcement, the stock price of Phathom Pharma, which had fallen by up to about 86% since November 2024, immediately surged by approximately 90.2%, reflecting the alleviation of concerns." She added, "We propose to immediately reflect the first scenario corporate value of about 1.7278 trillion won for HK Innoen, as presented in our May 26 report."

She further explained, "If generics of Voquezna were to enter the market earlier than expected, it could lead to a drop in P-CAB prices and expanded insurance coverage, which could have acted as a market entry barrier for K-Cab as a latecomer." She added, "However, with this extension, K-Cab will be able to enter the market under a 'premium competition structure' with Voquezna starting in 2027, which is a very positive development."