[Post-IPO] Prestige Biologics Faces Performance Setback Amid EU-GMP Certification Delay

Expected Sales of 34.6 Billion at IPO... Last Year's Sales 3.2 Billion
Herceptin Biosimilar Sales Delayed
COVID-19 Vaccine Business Also Faces Difficulties

[Asia Economy Reporter Hyungsoo Park] Prestige BioLogics posted underwhelming results last year compared to expectations. The achievement rate of the projected performance used to calculate the appropriate IPO price at the time of listing was less than 10%.

According to the Financial Supervisory Service's electronic disclosure system on the 14th, Prestige BioLogics recorded sales of 3.2 billion KRW and an operating loss of 26.8 billion KRW last year. Although there were no sales in 2020, sales were generated last year by providing production services for pancreatic cancer antibody new drugs and Humira biosimilar prototypes. The scale of operating losses increased compared to the previous year.

Mirae Asset Securities, which underwrote the listing, had estimated that Prestige BioLogics would record sales of 34.6 billion KRW and operating profit of 6.3 billion KRW last year. Prestige BioLogics was listed on the KOSDAQ market on March 11 last year through a growth special case. The IPO price was set at 12,400 KRW. The performance estimates presented by Prestige BioLogics and Mirae Asset Securities influenced the calculation of the IPO price.

It was expected that sales related to the Herceptin biosimilar (HD201) and Avastin biosimilar (HD204) pipelines would occur. HD201 began sales in Europe, and marketing authorization applications were submitted in the United States, Canada, and Korea, with sales expected to start this year. Milestones and royalties were estimated at 6.3 billion KRW and 4.4 billion KRW, respectively. The European Herceptin biosimilar market is dominated by Celltrion, Amgen, and Samsung Bioepis, accounting for 85%. Prestige BioLogics expected HD201 to capture about 9% of the market even as a latecomer.

However, due to the impact of COVID-19, the European Medicines Agency (EMA)'s Good Manufacturing Practice (EU-GMP) certification inspection was delayed. The inspection and approval delays resulted in no sales from the Herceptin biosimilar.

With the GMP inspection delayed last year, Prestige BioLogics pursued contract manufacturing (CMO) of the Russian-developed COVID-19 vaccine "Sputnik V." This plan was not included when estimating performance at the time of listing. It was expected that even if HD201 sales did not materialize, achieving sales targets would not be a problem if COVID-19 vaccine contract manufacturing proceeded.

However, the Sputnik V contract manufacturing was postponed repeatedly and eventually stalled. This was due to ongoing economic sanctions against Russia by the United States and Europe following the Russia-Ukraine conflict.

Due to these successive setbacks, the stock price has remained near its lowest level since listing. The stock price, which surpassed 20,000 KRW in April last year, is recently trading below 7,000 KRW.

Prestige BioLogics, which submitted a disappointing performance report last year due to the impact of COVID-19, aims to normalize its performance this year. The company obtained EU-GMP certification for its manufacturing facilities last month. Mirae Asset Securities expects the approval to be reflected in this year's performance. The Avastin biosimilar, currently in phase 3 clinical trials, is also expected to generate sales from next year if approved as planned.

The company plans to leverage its antibody drug production technology know-how and EU-GMP certified manufacturing facilities to strive for entry into the European market for the Herceptin biosimilar.

Recently, Prestige BioLogics obtained a domestic patent for a "hybrid system for culturing and purification processes for antibody drug manufacturing." This patent covers a hybrid system combining stainless steel and single-use (SU) production equipment used in antibody drug manufacturing processes. Contract manufacturing of biopharmaceuticals requires flexibility due to multi-product production and frequent product changeovers.

Using the patented technology, cross-contamination can be prevented through independent operation of the culturing and purification units. Flexible connection between the culturing and purification units can also prevent bottlenecks in the purification process. It is expected to enhance competitiveness in the biopharmaceutical contract manufacturing market.

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