[Click eStock] "Green Cross in Talks for Contract Manufacturing with COVID-19 Vaccine Developer"

Post-Charge Finishing Process Capability Exceeds 1 Billion Doses
Expectations for Entry of Immunoglobulin Injection into the US Market

[Asia Economy Reporter Gong Byung-sun] Green Cross is drawing attention as it negotiates a contract for contract manufacturing with a COVID-19 vaccine developer supported by the Coalition for Epidemic Preparedness Innovations (CEPI). Since it has sufficient capacity for the fill-finish process, which involves filling vaccine bulk into containers and packaging, there are predictions that additional contract manufacturing agreements may be possible.

According to industry sources on the 2nd, Green Cross and the CEPI-supported vaccine developer are negotiating a main contract for contract manufacturing of the COVID-19 vaccine. Due to the urgent global vaccine supply, it is expected that the main contract will be signed within the first quarter. This is an additional contract following the selection as a CEPI COVID-19 vaccine contract manufacturer in October last year.

Myung-sun Lee, a researcher at Shin Young Securities, explained, “Green Cross has the fill-finish process capacity to produce more than 1 billion doses of vaccine, so additional contracts beyond CEPI are possible,” adding, “In the pandemic situation, the business transformation of Green Cross, a leading domestic vaccine and blood product specialist company, is drawing attention.” Green Cross plans to proceed with the approval and distribution of the Moderna vaccine starting from the second quarter in line with government plans.

Accordingly, vaccine sales are expected to increase this year, and the performance of its subsidiaries is also expected to continue growing. Although it recorded an operating loss of 22.4 billion KRW in the fourth quarter of last year, falling short of the market expectation of an operating profit of 10 billion KRW, an operating profit is forecasted for this year. Even reflecting only the confirmed CEPI contract this year, 350 million doses of vaccine are planned to be produced, with sales expected to reach 395.5 billion KRW and earnings before interest, taxes, depreciation, and amortization (EBITDA) estimated at 83.1 billion KRW.

Entry into the North American market for immunoglobulin (IVIG) injections is also anticipated. Green Cross applied for approval from the U.S. Food and Drug Administration (FDA) for IVIG 10% on the 26th of last month. IVIG 10% is a blood product injection used for low and agammaglobulinemia. The application results are expected to be announced within the first quarter of next year. Researcher Lee said, “Entry into the North American market for IVIG injections has been a long-cherished goal for Green Cross,” adding, “If it passes the FDA, not only short-term but also long-term business growth is expected.”

Against this backdrop, Shin Young Securities maintained a ‘Buy’ investment rating on Green Cross and raised the target stock price from 200,000 KRW to 430,000 KRW. The closing price on the previous trading day was 378,500 KRW. The target price was estimated considering this year’s earnings forecasts and the average valuation premium of pharmaceutical companies. Researcher Lee said, “Although specific contract terms such as contracted products, vials, syringes, and scale have not yet been finalized, growth is gradually expected through strengthening the core business this year.”

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