Meritz Securities announced on July 29 that it has lowered its target price for Hanmi Pharmaceutical from 69,000 won to 63,000 won, a decrease of 8.7%, citing slower-than-expected recovery for Beijing Hanmi. However, the firm maintained a 'buy' rating, considering the upcoming domestic launch of the obesity treatment GLP-1 new drug in the second half of the year and the momentum in new drug development.
Kim Jun-young, a researcher at Meritz Securities, stated, "We are adjusting the target price to reflect the prolonged impact of the concentrated purchasing system at Beijing Hanmi and the delay in normalizing profitability. However, the domestic launch of epeglanatide in the second half is expected to mark the entry of Hanmi Pharmaceutical's obesity treatment business into a full commercialization phase."
For the second quarter, Hanmi Pharmaceutical reported consolidated sales of 467.2 billion won and an operating profit of 131.1 billion won, representing increases of 29.3% and 116.9%, respectively, compared to the same period last year. The operating profit exceeded market expectations by approximately 18.4%, largely due to a $75 million upfront payment from a technology transfer agreement with global pharmaceutical company Eli Lilly for sonapeglenatide, which was reflected as 112.7 billion won in royalty income.
On a standalone basis, product sales increased due to stable growth of the dyslipidemia treatment 'Rosuzet' and the expansion of co-promotion with global pharmaceutical companies. In contrast, Beijing Hanmi reported poor performance with sales of 60.7 billion won and an operating profit of 600 million won, impacted by decreased sales of key products due to the concentrated purchasing system in China.
Meritz Securities anticipates that the recovery pace for Beijing Hanmi will be slow due to ongoing drug price reduction policies in China, but it remains optimistic about the obesity treatment business and the value of new drugs. Notably, the triple-action obesity treatment candidate 'LA-TRIA' is expected to gain value as clinical results and market expansion of competing drugs become apparent.
Kim added, "Among global pharmaceutical companies, there are not many with a triple-action pipeline, excluding Novo Nordisk. If positive results are confirmed in the ongoing Phase 2 clinical trials, the value of the new drug could significantly increase."
* This article has been translated by AI.
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