[Click eStock] "HK Innoen, Growth Potential Greater Than Condition in Peptic Ulcer Treatment"

[Asia Economy Reporter Ji Yeon-jin] SangSangIn Securities on the 8th gave a buy rating and a target price of 73,000 KRW for HK Innoen, stating that as the COVID-19 situation improves, a recovery in performance is expected for Condition and Hovenia tea, and that investment in new drug development will expand, increasing the future value of the new drug pipeline.

Researcher Ha Tae-gi of SangSangIn Securities said, "Currently, pharmaceutical and bio stocks are undergoing a downward adjustment period due to instability in macro variables such as interest rates," adding, "If macro variables stabilize, the company's current stock price is at a level that is buyable from a long-term perspective."

HK Innoen is a pharmaceutical company focused on prescription drugs. It was incorporated into the Kolmar Korea Group from CJ Healthcare in 2018 and was listed on the KOSDAQ in August this year. Last year, its consolidated sales amounted to 598 billion KRW, with sales composition of 86% prescription drugs and 14% HB&B (health supplements, cosmetics, functional beverages, etc.).

In prescription drugs, sales of infusion solutions are in the 80 billion KRW range annually. Starting this year, a vaccine distribution contract with MSD in the U.S. has generated an additional sales factor of around 180 billion KRW annually.

It is expected that the 350 billion KRW raised through the listing will be used to repay borrowings and create growth potential. Sales growth was achieved with the peptic ulcer treatment 'K-CAB,' which is evaluated to have great potential in the global market going forward. K-CAB is rapidly growing in sales by improving the shortcomings of existing PPIs and H2RAs (H2 receptor antagonists) through its effects on erosive esophagitis, non-erosive esophagitis, peptic ulcers, and Helicobacter pylori eradication. Last year, K-CAB sales reached 81.2 billion KRW, a 134% increase compared to the same period last year. This year’s first half sales increased by 25% to 25.4 billion KRW.

K-CAB currently has licensing-out contracts in 24 countries, indicating high global growth potential. When launched in China in 2022, milestone payments of 7 billion KRW and sales royalties (3 to 4 billion KRW) will be generated, and clinical phase 1 trials are underway in the U.S.

Regarding new drugs, the non-alcoholic steatohepatitis (NASH) treatment 'IN-A010' is undergoing phase 2 clinical trials in Europe, and the self-developed autoimmune treatment 'IN-A002' is in phase 1 clinical trials domestically.

However, the overhang issue from the initial public offering (IPO) shares is considered a risk. During the three-month lock-up period after the IPO, 1,980,450 shares will be released on the 9th of next month, and 4,621,050 shares will be released on February 9th of next year.

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