[Click eStock] "SK Biopharm, Cenobamate Market Expansion ... Target Price Up 36%"

Eugene Investment & Securities Report
Investment Opinion Downgraded to 'Neutral'

[Asia Economy Reporter Minji Lee] On the 4th, Eugene Investment & Securities raised the target price for SK Biopharm by 36% from the previous level to 150,000 KRW. This decision was based on the expectation that sales could significantly increase due to the growth of Cenobamate.

[Image source=Yonhap News]

Currently, Cenobamate (US drug name Xcopri) is expanding its market size. After the US and Europe, it has completed technology export to the Japanese market as the third region, and in Europe, the number of countries with technology export expanded from 32 to 41. Cenobamate is sold directly in the US, while in Europe and Japan, it is licensed out and royalties are received. In Europe, regulatory approval has been completed, and sales approval is expected from the first half of this year. In Japan, sales are expected to begin in 2024.

Accordingly, Cenobamate’s sales this year are projected to reach 73.2 billion KRW, a significant increase from 10.6 billion KRW last year. Researcher Byunghwa Han of Eugene Investment & Securities stated, “From 2024, when indication expansion begins in the US, sales are estimated to reach 568.2 billion KRW.”

Due to pipeline investments, operating profit is expected to remain in deficit until 2023 but turn positive from 2024. This is because the indication for Cenobamate, the main drug in the US market, is expanding from partial seizures to generalized seizures, which is expected to increase sales. From 2025, sales of Carisbamate, a treatment for Lennox-Gastaut syndrome, may begin, further increasing profit growth.

According to Eugene Investment & Securities’ estimates, SK Biopharm’s sales and operating profit in 2024 are expected to be 633.3 billion KRW and 78.1 billion KRW, respectively. By 2030, sales are expected to grow to 1.8 trillion KRW and operating profit to 776.7 billion KRW. Researcher Han said, “The estimates only consider three drugs: Cenobamate, Solriamfetol, and Carisbamate. If other promising drugs receive approval, the performance estimates will increase further.”

However, the investment opinion was downgraded from buy to neutral. This is because the stock price increase after listing was larger than expected, resulting in a higher valuation compared to competitors. Researcher Han explained, “The sales and market capitalization of UCB, the global number one epilepsy drug company, are 7.3 trillion KRW and 23 trillion KRW, respectively. In the mid to long term, SK Biopharm is expected to grow into a company that surpasses UCB, but some time is needed to verify this.”

This content was produced with the assistance of AI translation services.