Meritz Securities on the 17th said that despite the absence of a milestone in the third quarter for Yuhan Corporation, overseas sales are expected to remain solid. It lowered its target price to 180,000 won from 200,000 won and maintained a "buy" rating.
On a consolidation basis, Yuhan Corporation's third-quarter revenue is expected to be 574 billion won and operating profit 22.8 billion won. That would be down 4.1% and 52.1%, respectively, from a year earlier. This is attributed to the absence of milestone receipts in the third quarter of this year.
This is a base effect from the receipt of an FDA approval milestone for the non-small cell lung cancer treatment Leclaza (brand name Lazcluze) in the third quarter of last year. In the previous quarter, a milestone was also received following approval in Japan, but there is no particular approval issue this quarter. However, with European approval expected in the fourth quarter and Chinese approval in the first quarter of next year, milestone receipts are likely to be reflected in results thereafter.
Overseas sales growth is also expected to continue to accelerate. As its subsidiary Yuhan Chemical signed a contract worth 258.1 billion won to supply active pharmaceutical ingredients for human immunodeficiency virus (HIV) infection treatments to Gilead, solid overseas sales are anticipated. In new drugs, the value of the allergy treatment resigecept was raised to 931.4 billion won from 524.2 billion won as phase 2 clinical trial approval was obtained.
Kim Jun-young, an analyst at Meritz Securities, said, "Growth momentum such as FDA approval of the subcutaneous formulation of Rybrevant and its listing as a preferred medication by the U.S. National Comprehensive Cancer Network (NCCN), and Leclaza sales based on this, are expected."