by Son Seonhee
Published 13 Feb.2023 08:47(KST)
[Asia Economy Reporter Son Sunhee] Eugene Investment & Securities announced on the 13th that it is lowering the target price of Daewoong Pharmaceutical from the previous 230,000 KRW to 170,000 KRW. This reflects the uncertainty regarding the ongoing lawsuit results with competitors. However, the investment opinion remains as 'Buy.'
Daewoong Pharmaceutical recently lost the first trial in the civil lawsuit related to botulinum toxin strains against Medytox. Following the ruling, Medytox stated that it plans to consider additional legal actions against companies that have illegally acquired and commercialized botulinum strains and manufacturing processes. Accordingly, the position of domestic botulinum toxin companies with unclear origins is expected to weaken.
Daewoong Pharmaceutical was not prosecuted last year in the related domestic criminal case due to insufficient evidence, reached a settlement in the final US ITC ruling (December 2020), and signed a settlement agreement at the US Federal Court of Appeals (February 2021), so it appears they did not anticipate losing this lawsuit. Daewoong Pharmaceutical has immediately expressed its intention to appeal. Although there is expected to be no short-term impact on performance, there are calls for the company to present a response strategy to investors in case of losing future lawsuits.
Researcher Kwon Hae-soon of Eugene Investment & Securities explained, "It is judged that there will be no short-term impact on the domestic and overseas sales of Nabota," but added, "Since the domestic lawsuit is expected to be prolonged, we lowered the target price reflecting the uncertainty." He further stated, "The uncertainty related to the lawsuit will act as a discount factor when evaluating Daewoong Pharmaceutical’s corporate value, which is expected to level up through overseas market expansion beyond the domestic market."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.