[Click eStock] "SK Biopharm, Growth Potential of 'Xcopri' Expected... Buy Rating"

[Asia Economy Reporter Lee Myunghwan] Shinhan Financial Investment announced on the 1st that it newly issued a buy rating and a target price of 100,000 KRW for SK Biopharm. This is due to the expected growth of the company's epilepsy treatment drug, Xcopri.

Considering the clinical efficacy and sales growth trend of Xcopri, a new epilepsy drug developed by SK Biopharm, Shinhan Financial Investment evaluated that "blockbuster-level" growth is anticipated. They expect cash flow generation starting from 2024 due to Xcopri's growth, and pointed out that based on the secured cash, there is potential for growth into a global pharmaceutical company.

Regarding market concerns that Xcopri's growth rate is slower than expected, Shinhan Financial Investment assessed that the speed is positive considering it is still in the early stages of launch. They noted that Xcopri shows faster growth compared to other third-generation competing drugs, while also taking into account the unfavorable early launch environment. They also emphasized the need to consider the inherent characteristics of the epilepsy drug market and the low initial penetration rate.

Shinhan Financial Investment forecasted that if SK Biopharm strengthens its product portfolio and improves operational efficiency, the pace of corporate value growth will accelerate further. They explained that securing epilepsy drugs with mechanisms of action that do not overlap with Xcopri, or assets for rare epilepsies that have not yet been developed, is expected considering marketing synergies. Given that valuations of global bio companies have significantly declined, they predicted opportunities within the next year.

Shinhan Financial Investment evaluated that SK Biopharm's recent stock price has fallen due to the sluggish bio market and deteriorating earnings. They pointed out that the earnings decline is not due to sluggish U.S. sales growth of Xcopri, but rather due to increased selling and administrative expenses. Researcher Jang Sehoon of Shinhan Financial Investment analyzed, "From 2023, full-scale growth in Xcopri prescriptions is expected with the normalization of local marketing," adding, "Since the time to strengthen the product portfolio may come within a year, now is judged to be a buying opportunity."

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