[Click eStock] "Yuhan Corporation, Fruitful Results in Global New Drug Development"

[Asia Economy Reporter Ji Yeon-jin] Shin Young Securities announced on the 8th that they are raising the target price of Yuhan Corporation to 84,000 KRW, as the company is expected to improve its performance and has a high possibility of success in global new drug development.

Yuhan Corporation's sales last year are expected to grow by 8.2% year-on-year to 1.6017 trillion KRW, and operating profit is expected to be 97.9 billion KRW, due to the recovery of the pharmaceutical business performance since the second quarter of last year and the large-scale royalty inflow from Janssen. This year, sales are estimated to increase by 7.8% year-on-year due to steady growth in the health and wellness business and pharmaceutical business. However, operating profit is forecasted to decrease by 17.1% compared to the previous year due to a 40% decline in royalty income.

Last month, the company received conditional approval from the Ministry of Food and Drug Safety for the non-small cell lung cancer targeted therapy 'Lazertinib (product name: Lacraza tablets)'. It is expected that domestic sales will be possible in the second half of the year once the drug price is confirmed. The domestic sales of the existing targeted therapy 'Tagrisso' were 80 billion KRW as of last year. The expected sales of Lazertinib this year are about 7 billion KRW, but if it is approved as a first-line treatment for non-small cell lung cancer through phase 3 clinical trials, greater sales growth is anticipated.

At the recent European Society for Medical Oncology (ESMO), the combination therapy of Lazertinib and Amivantamab suggested the possibility of development as a treatment for Tagrisso-resistant patients, for whom there is no existing treatment. The global phase 3 clinical trial for the combination therapy is planned to be completed in 2023, followed by a plan to apply for approval from the U.S. FDA.

Myung-sun Lee, an analyst at Shin Young Securities, said, "Yuhan Corporation is securing a new drug pipeline through various open innovations," adding, "This year, in addition to Lazertinib, pipelines that were initially licensed out are entering clinical trials, making additional milestone income possible."

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