Shinhan Investment Corp. on Tuesday kept its “buy” rating on Yuhan Corp. but cut its target price 29.4% to 120,000 won, citing slower-than-expected growth in prescriptions for lazertinib.
Analyst Lee Ho-cheol said lazertinib royalty income has fallen short of expectations, weighing on the stock’s recent performance, but added that a turnaround remains possible depending on key clinical results in the second half of the year.
Yuhan reported consolidated first-quarter 2026 revenue of 526.8 billion won, up 7.2% from a year earlier. Operating profit rose 37.3% to 8.8 billion won, with an operating margin of 1.7%. The results, however, missed market consensus, Lee said.
He cited several factors: the company did not recognize a $30 million milestone tied to a European launch of lazertinib; royalties of 5.3 billion won came in below expectations; and a higher share of overseas active pharmaceutical ingredient, or API, sales with higher cost ratios weighed on profitability.
Lee said the longer-term outlook remains intact. He expects Yuhan to receive the European milestone in the first half of the year, and said a foundation for broader prescribing is forming after lazertinib was listed as a preferred first-line regimen in NCCN guidelines and the U.S. Food and Drug Administration approved a subcutaneous formulation of the combination drug Rybrevant.
He also said the overseas API business is expected to grow on capacity expansion and improved bargaining power. Expansion of the HC building is underway, with operations targeted for the first half of 2028, and potential benefits from a U.S. biosecurity law have also been discussed.
Lee said the key variable for a rebound in the share price will be clinical results in the second half. He said that if the MARIPOSA Phase 3 trial shows the lazertinib-Rybrevant combination is superior to Tagrisso in median overall survival, or mOS, and safety, prescriptions could expand and the stock could see a valuation re-rating.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.