Hanmi Pharmaceutical to gain a new growth driver with launch of 'Epe' obesity drug; stock concerns already priced in

[Financial News] Analysts expect Hanmi Pharmaceutical to enter a new phase of growth ahead of the late-month launch of Epe, a domestically developed obesity treatment.
By leveraging a lower price than competing product Wegovy to gain early market share, the company could also boost its value through potential additional licensing deals for its global drug pipeline.
On the 15th, Wi Hae-ju, an analyst at Korea Investment & Securities, maintained a 'Buy' rating on Hanmi Pharmaceutical and set a target price of 730,000 won. The target was cut 10% from the previous level to reflect the earnings outlook for Beijing Hanmi, but the analyst judged that concerns about earnings had already been substantially priced in following the recent share-price correction.
Particular attention was paid to the price competitiveness of Epe, which is set to launch at the end of this month. Epe's initial monthly treatment cost is 129,000 won, 37% less than Wegovy. It is also priced 17% lower for maintenance therapy. The analysis is that lowering the burden of long-term obesity treatment could increase early market penetration.
Analyst Wi estimated Epe's sales next year at 128.7 billion won. He said, "Now that it has secured price accessibility in the domestic obesity-treatment market, the pace of prescription growth and patients' assessments of efficacy and side effects will determine its growth prospects."
The company's progress in developing new drugs globally is another area of interest. Hanmi Pharmaceutical signed two licensing agreements with global pharmaceutical companies this year.
The triple agonist efocipegtrutide completed a Phase 2b trial in the United States for metabolic dysfunction-associated steatohepatitis (MASH) in July and is now undergoing data analysis.
The assessment is that expectations for additional licensing deals could come into focus depending on future clinical results.
However, short-term earnings are expected to be somewhat weak.
According to Korea Investment & Securities, Hanmi Pharmaceutical's third-quarter revenue is forecast to rise 3% year on year to 374 billion won, while operating profit is expected to fall 32% to 37.5 billion won.
The main reason is a decline in sales at Beijing Hanmi due to the impact of China's volume-based drug procurement system. 
Analyst Wi said, "Despite this, the upfront payment from the Genentech licensing deal is expected to be reflected in the fourth quarter, limiting its impact on full-year earnings."
Analyst Wi added, "Hanmi Pharmaceutical's share price has fallen 25% over the past five trading days, but the potential for further declines is likely to be limited," and said, "The company's commercialization results for Epe and clinical results for its MASH drug will be key factors supporting a share-price rebound." 


[email protected] Kim Kyung-ah Reporter