"Korean Biotech Faces Limited Impact from U.S. Tariffs and Drug Price Cuts"

U.S. Pharmaceutical Tariffs Expected to Stay at 15%
Limited Impact on Samsung Biologics and Celltrion Due to Low Drug Prices
"Technology Transfer Events Over Sales"
Spotlight on Alteogen, Rigakem Bio, and ABL Bio

The Donald Trump administration in the United States is working to enhance the competitiveness of domestic products in the pharmaceutical and biotech sectors by imposing tariffs, while also taking steps to lower the relatively high drug prices compared to other countries. On the 19th, Hana Securities released a report titled "Interest in Biotech Surges After August Earnings Announcements," analyzing that U.S. tariffs and drug price reductions are expected to have a limited impact on Korean biotech companies. The report emphasized the need to pay attention to technology transfer events around major conferences scheduled for next month.

U.S. Pharmaceutical Tariffs Likely to Be Delayed... Drug Price Cuts Are a Greater Concern

The Trump administration's announcement of pharmaceutical tariffs, initially expected in mid-August, now appears likely to be postponed until September. Hana Securities forecasts that the initial U.S. pharmaceutical tariff rate will remain around 15%. Sunah Kim, an analyst at Hana Securities, stated, "While there is a possibility that the rate could gradually increase, once the specific tariff rate and timing are determined, companies with high dependence on U.S. exports are expected to respond by increasing investments in the U.S. market." She added, "Therefore, if the tariff is set at 15%, we do not expect it to have a significant negative impact on stock prices."

The United States is one of the countries with the highest prescription drug prices in the world. In response, the Trump administration has issued a Most Favored Nation (MFN) executive order to apply the lowest global price to domestic prescription drugs, aiming to lower U.S. drug prices. In reaction, global pharmaceutical company Eli Lilly raised the price of its obesity drug Mounjaro in the UK by up to 170%, citing the need for "fair sharing of R&D costs among developed countries." There is a possibility that Lilly's pricing policy could be extended to other drugs and other pharmaceutical companies as well.

Korean Biotech Blue Chips Remain Unaffected

Due to the uncertainty brought by the Trump administration's policies in the pharmaceutical and biotech sectors, companies with significant exports of finished products to the U.S. could see substantial impacts on their stock prices. However, the pharmaceutical and biotech companies currently attracting attention in the domestic stock market are ▲ Rigakem Bio, ABL Bio, and D&D Pharmatech, which are biotech firms with high expectations for milestone payments due to clinical progress rather than sales, and ▲ Samsung Biologics and Celltrion, which are biosimilar companies with already low drug prices and relatively lower risk.

Second quarter earnings announcements concluded in August. The stock prices of pharmaceutical and biotech companies that did not show improved performance have returned to previous levels. The market is now focusing on upcoming conference presentations, licensing out agreements, and the possibility of a U.S. interest rate cut starting in September. Major global conferences such as the World Conference on Lung Cancer (WCLC), the European Association for the Study of Diabetes (EASD), the European Society for Medical Oncology (ESMO), and the Partnership Opportunities in Drug Delivery (PODD) are scheduled to take place. Since biotech stock prices typically move inversely to interest rates, there is growing interest in whether the U.S. Federal Reserve will implement at least one rate cut in the second half of the year. Analyst Sunah Kim stated, "If leading high-market-cap biotech firms such as Alteogen, Rigakem Bio, ABL Bio, and Peptron deliver on their promised technology transfer deals in the second half of the year, it could create major events that, together with an interest rate cut, would foster a positive atmosphere across the biotech sector."

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