Hana Securities said on the 8th that after signing a large-scale technology transfer contract with Eli Lilly and Company, Hanmi Pharmaceutical can be expected to land additional technology transfers in the second half of this year. It maintained a Buy rating and raised the target price 10.9% to 710,000 won from 640,000 won. The previous session's closing price was 494,000 won.
Hanmi Pharmaceutical said on the 1st that it transferred technology (L/O) for "Sonefpeglutide" (project name: LAPSGLP-2 analog), a candidate for treating short bowel syndrome (SBS), to Eli Lilly and Company.
The total contract size is $1.26 billion (about 1.9 trillion won), including a non-refundable upfront payment of $75 million (about 113.0 billion won). The upfront-to-total ratio is about 6%. Hana Securities analyzed that, considering recent global license-out trends and orphan drug deal terms, this was a successful negotiation outcome.
Kim Seon-a, an analyst at Hana Securities, said, "It was hard to expect a big pharma like Lilly to jump into a small rare-disease market, so this deal is a highly unusual surprise," adding, "Lilly, which has already secured most of the key obesity-target peptides, appears to have found strong appeal in Hanmi Pharmaceutical's compound's excellent half-life (once-monthly dosing potential confirmed in phase 2)."
Sonefpeglutide is in a global phase 2 trial and is slated to end in the second quarter of next year. Hana Securities said it holds an overwhelming edge in convenience over the existing drug that requires daily dosing (teduglutide).
Hana Securities estimated that the deal likely includes options to expand indications beyond short bowel syndrome to other conditions related to impaired small-intestine function, such as type 2 diabetes (T2D) and Crohn's disease.
With this deal, Hanmi Pharmaceutical achieved the annual guidance it presented at the start of the year. As multiple promising compounds that have finished coordinating basic terms (term sheets) with potential partners are waiting in the wings, the odds of additional pipeline expansion in the second half are rising.
Key pipelines expected to be licensed out in the second half include: ▲ the triple-action obesity therapy "HM15275" ▲ the muscle-increase metabolic disease therapy "HM17321" ▲ and a therapy for congenital hyperinsulinism. In particular, the muscle-builder HM17321 has completed a single-ascending-dose (SAD) study, and clinical data could be released as early as July–August.
Kim said, "With Hanmi Pharmaceutical's global negotiating power proven through the Sonefpeglutide deal, the door has opened wide for technology transfers on favorable terms, such as adding combination-clinical options for obesity candidates," adding, "We maintain our top pick view in the pharma-biotech sector for the second half of this year."
The outlook for earnings is also bright. Hana Securities estimates Hanmi Pharmaceutical's consolidated sales this year at 1.6981 trillion won, up 9.7% on-year, with operating profit at 259.6 billion won. Next year, sales are forecast at 2.0432 trillion won and operating profit at 382.6 billion won, with both scale and profitability improving.