"The Fourth Quarter Will Be Different": Biotech Stocks Seek a Rebound on Earnings and New-Drug Momentum

[Financial News] Major biotech companies that languished in September are seeking a rebound in October. Investors are watching to see whether the biotech sector, whose sentiment was weakened by its sensitivity to external factors such as interest rates and liquidity, can turn things around in the fourth quarter on the back of improved earnings and new-drug development results.

According to Korea Exchange (KRX) on October 4, major biotech stocks, including Samsung Biologics, Celltrion, SK Biopharmaceuticals and Alteogen, all fell during September. Alteogen posted the steepest monthly decline at 13.07%, followed by SK Biopharmaceuticals at 12.17%. Samsung Biologics and Celltrion also fell 9.09% and 1.99%, respectively.
However, all four stocks rose on the first trading day of October, signaling a shift in sentiment. Alteogen gained 4.13%, while Celltrion, SK Biopharmaceuticals and Samsung Biologics advanced 3.32%, 3.09% and 2.73%, respectively. The rally did not continue, however, as the stocks edged lower again the following day.
The market is focused on whether September's weakness will continue or whether the stocks will gradually recover on the strength of earnings and business catalysts. Major biotech companies are approaching business milestones that could determine their stock performance in the fourth quarter.
For Samsung Biologics, key factors include growing demand for contract development and manufacturing organization (CDMO) services, rising utilization at Plant 5 and additional contract wins. On October 2, Samsung Biologics signed a 90 billion won contract to manufacture products for a European pharmaceutical company, securing its eighth order of the year. The deal pushed its cumulative order backlog for the year above 1 trillion won. A second three-week general strike by the Samsung Biologics union, scheduled to begin on October 26, is also expected to be a short-term variable.
For Celltrion, expanding global sales of newly launched biosimilars, including the new drug Zymfentra, will be important. A key factor for the stock will be whether new products such as Avtozma, OMLYCLO and Osenbelt can establish stable growth trajectories in global markets.
At SK Biopharmaceuticals, attention is focused on the continued increase in U.S. prescriptions for Xcopri, its internally developed epilepsy treatment that has established a profitable business structure, as well as the performance of its follow-on pipeline. In August, SK Biopharmaceuticals also in-licensed Opacalim, a next-generation epilepsy drug candidate worth 1.1 trillion won, as it sought to secure a new growth engine.
For Alteogen, key catalysts include the commercialization of Merck Sharp & Dohme's (MSD) KEYTRUDA QLEX, which uses Alteogen's subcutaneous (SC) formulation-conversion platform technology, and whether Alteogen receives related milestone payments. MSD has set a goal of converting 30% to 40% of KEYTRUDA prescriptions in the United States to the subcutaneous formulation by the end of next year.
A securities industry official said, "Stocks that suffered steep declines in September remain capable of a technical rebound, but they need to prove their growth potential through earnings and business performance for stock prices to rise in the fourth quarter," adding, "In October, investors should focus less on short-term stock-price fluctuations and more on how well each company's fundamentals support them."
[email protected] Kang Jung-mo Reporter