DAOL Investment & Securities analyzed on the 31st that it is necessary to pay attention to the second half performance and research and development momentum of HK inno.N. In the second half, sales of HK inno.N's main product, the anti-ulcer drug K-Cab, are expected to continue growing in both domestic and international markets, and results from clinical trials of maintenance therapy are anticipated to be announced. The target price was raised from the previous 63,000 won to 65,000 won, and the investment opinion was maintained at 'buy'.
HK inno.N's revenue for the second quarter of this year was reported at 263.1 billion won, with an operating profit of 19.5 billion won. This represents a 20% increase in revenue and a 19.8% decrease in operating profit compared to the same period last year. The operating profit fell short of market expectations.
The poor performance in the second quarter seems to be attributed to delays in the export production schedule of the main product K-Cab and recalls in the beverage business. K-Cab has been reliably increasing prescriptions domestically but recorded 49.2 billion won in revenue as production schedules for export products fell behind. In the beverage business, consumption of hangover remedies decreased, intensifying competition, and it turned to a loss with an operating loss of 1.7 billion won due to quality issues.
Researcher Lee Ji-soo from DAOL Investment & Securities noted, 'Starting from the end of July, sales growth for K-Cab and newly introduced cancer drug Avastin is expected.' He added, 'As contracts for distributing COVID-19 vaccines, classified as essential vaccinations, are also being signed, related sales are expected to occur.'
The results of the Phase 3 clinical trial for K-Cab, conducted in the United States for erosive esophagitis, are expected to be completed in the third quarter. The application for FDA approval is anticipated to occur in the fourth quarter.
This researcher indicated, 'There still remains the possibility of a technological transfer to Europe within this year,' and added, 'It is essential to keep an eye on the overseas performance of K-Cab in the second half.'