Will Last Year's Underperforming Pharmaceutical Bio Stocks Rebound This Year... Which Are the Promising Stocks?

[Asia Economy Reporter Ji Yeon-jin] Can the pharmaceutical and bio sector, which underperformed in 2021, rebound in the new year?

According to the financial investment industry on the 2nd, although many bio companies signed technology export (l/O) agreements last year, there were no results that met investors' expectations. Rather, stocks of Ollipass, HanAll Biopharma, and Oscotec fell due to data releases that were below expectations. In addition, the ongoing COVID-19 pandemic delayed clinical trials, leading to downward adjustments in pharmaceutical and bio stock prices.

However, COVID vaccine-related stocks received some attention, and contract manufacturing organization (CMO) stocks for COVID vaccines saw significant gains. These include SK Bioscience and Green Cross, and Korea Korus and Huons Global consortium stocks related to Russian vaccine CMOs also showed strength, but due to slow progress, most stock prices fell sharply.

The COVID-19 treatment developed by Pfizer received emergency approval from the U.S. FDA, and if its effectiveness is proven, many changes are expected this year. The influence of COVID-related theme stocks is expected to weaken further.

Also, since this year is expected to be a period of rising interest rates, the pharmaceutical and bio sector, which consists of growth stocks, is likely to face increased uncertainty. From the perspective of stock supply and demand, there are many competing growth themes such as metaverse, NFT, electric vehicles, and hydrogen economy, creating an unfavorable environment.

However, there is a strong outlook that pharmaceutical and bio stock prices will enter a recovery phase. Researcher Ha Tae-gi of Sangsangin Securities said, "Bio stock prices have been significantly adjusted downward, and there are expectations for new clinical trials this year and new drug pipeline development," adding, "depending on the bio company, there may be cases of limited stock price increases."

Korea's manufacturing-oriented CDMO business, based on the 'ppalli-ppalli (quick-quick)' culture, remains promising, and bio-pharmaceutical CDMO-related stocks such as Samsung Biologics are expected to maintain upward momentum this year. Hana Pharmaceutical needs to confirm the possibility of CMO for anesthetic Bifavo in Europe and Japan this year. In addition, bio companies that present persuasive competitiveness in CMO are expected to see stock price increases.

In the new drug development sector, key points to watch this year for major bio companies include clinical data from NK cell therapy-based bio companies such as GC Cell and NKMax. Also, Alteogen, LegoChem Bio, and Olix, platform-based bio companies, are expected to undergo verification processes for value appreciation and expansion of clinical pipelines. Especially, verification of efficacy data for platform-based pipelines during clinical trials is expected to be important.

Attention should be paid to late-stage Phase 1 or early Phase 2 efficacy data from companies like MedPacto and TiumBio, which are developing anticancer drugs (own therapeutic pipelines, combined prescriptions improving tumor microenvironment), and the possibility of overseas technology exports should be examined.

It is also advised to keep an eye on the progress of ST Pharm's mRNA development. ST Pharm has submitted an Investigational New Drug (IND) application to the Ministry of Food and Drug Safety for the mRNA COVID vaccine candidate 'STP 204,' and stock price volatility may occur this year.

Also, attention is focused on whether SK Bioscience's Phase 3 clinical trial results for the COVID vaccine will be released in the first quarter of this year. However, since Pfizer and Moderna's mRNA vaccines dominate the market, it is necessary to assess how much antigen synthesis-type COVID vaccines can penetrate the market.

Expected stocks in the pharmaceutical sector this year include Daewoong Pharmaceutical and Yuhan Corporation. Daewoong Pharmaceutical is expected to improve performance as it escapes long-standing international litigation over Botox products, activates global business, and benefits from domestic sales of Pexuprazan. Yuhan Corporation is expected to increase corporate value due to domestic sales of Lazertinib and potential U.S. product approvals.

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