Hanmi Pharmaceutical sets profit rebound in motion as obesity drug sales and technology exports become twin drivers

[Financial News]  Daol Investment & Securities said on the 28th that Hanmi Pharmaceutical is expected to post improved results in the fourth quarter, driven by the launch of an obesity treatment and the recognition of technology-export revenue. It expects sales of obesity drugs to become a new growth driver alongside continued growth in the company’s key domestic products. The firm maintained its Buy rating. It lowered its target price from KRW 720,000 to KRW 700,000 to reflect revisions to its earnings estimates for next year.
Daol Investment & Securities analyst Lee Ji-su focused on the domestic launch of efpeglenatide. The drug, which received domestic product approval on the 7th, is scheduled to begin supply at the end of this month, with first-year sales targeted at KRW 100 billion. This marks a move toward turning obesity-treatment development achievements into product sales.
The domestic Phase 3 trial found an average weight reduction of 9.75%. The analyst added, "Because the trial was designed primarily for Korean patients with a body mass index (BMI) of 27–35, it is difficult to compare it directly with global trials, where the average BMI is about 38." 
The company’s existing key products also continued to grow. Higher sales of Rosuzet, Daparon Family and other products helped third-quarter standalone revenue rise 8.3% year over year to KRW 291.5 billion. However, consolidated operating profit came to just KRW 37.8 billion, affected by supply adjustments at Beijing Hanmi and the recognition of provisions for bad debts. Consolidated revenue rose 4.2% to KRW 377.4 billion.
The analyst forecast, "In the fourth quarter, the launch of efpeglenatide and recognition of the upfront payment for the next-generation obesity treatment HM17321 will support improved results." Daol Investment & Securities assumed that the approximately KRW 260 billion upfront payment would be recognized over four quarters, starting in the fourth quarter of this year. The actual method of revenue recognition needs to be confirmed.
Meanwhile, Hanmi Pharmaceutical’s consolidated revenue this year was estimated at KRW 1.7252 trillion, with operating profit estimated at KRW 349.2 billion. These figures represent increases of 11.5% and 35.5%, respectively, from the previous year.
Follow-up clinical trials were also cited as a factor that could increase the value of the new drugs. The analyst added, "The Phase 1 trial of HM17321 and the Phase 2 trial of HM15275 are expected to be completed in the first half of next year," and said, "Key clinical data and follow-on technology-export deals could lead to a revaluation of the company’s value." 


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