Hanmi Pharmaceutical is projected to report second-quarter results that exceed market expectations. This strong performance is largely attributed to a substantial upfront payment from a technology transfer agreement with global pharmaceutical company Eli Lilly. However, excluding this payment, the core business has shown signs of slowing down, particularly in Beijing Hanmi.
According to the securities industry on July 12, Hanmi's Q2 results are expected to significantly surpass market consensus due to the impact of the upfront payment from the technology transfer agreement. Hana Securities forecasts consolidated sales of 492 billion won and operating profit of 121.5 billion won, while DS Investment Securities predicts sales of 460.1 billion won and operating profit of 134 billion won. These figures are well above the market consensus of 413.5 billion won in sales and 86.6 billion won in operating profit.
The boost in performance is primarily due to the technology transfer agreement for the obesity treatment candidate 'sonepaglutide,' a glucagon-like peptide-2 (GLP-2) analog, with Eli Lilly. The upfront payment of approximately 112.9 billion won received last month has been temporarily reflected in the sales figures.
The main reason for the underperformance in core operations is attributed to Beijing Hanmi. Before the onset of a management dispute in 2023, Beijing Hanmi accounted for 44% of the company's consolidated operating profit. From 2021 to 2023, its share of consolidated sales steadily increased, supporting Hanmi's profitability.
However, the impact of China's centralized purchasing system (VBP) has hindered growth. This system, which involves bulk bidding for pharmaceuticals, has intensified pressure to lower drug prices. Many of Beijing Hanmi's key products, including children's digestive aids and cold medications, are closely tied to the public hospital prescription market, suggesting that performance pressures will continue for the foreseeable future.
A Hanmi representative stated, "The centralized purchasing system is an opportunity for strengthening competitiveness rather than a risk," adding that the company will enhance its responsiveness based on its sales and marketing network targeting over 9,000 hospitals and more than 200,000 medical professionals across China.
Domestic operations are also seen as having limited immediate potential to boost performance. Recently, Hanmi has secured co-promotion agreements for migraine prevention drug 'Ajobi' from Handok Teva and non-narcotic pain reliever 'Anapraz' from Vivascon Pharmaceuticals, expanding its business scope. However, it will take time for these products to contribute significantly to sales.
The market views the upcoming launch of an obesity treatment as a potential turning point. Hanmi is set to release the glucagon-like peptide-1 (GLP-1) obesity drug 'efegludec' in the fourth quarter. The company aims to develop efegludec into a blockbuster product with annual sales of 100 billion won.
In April, Hanmi activated a company-wide committee to target commercialization of efegludec within the year. The strategy focuses on ensuring supply stability through its Pyeongtaek bioplant while leveraging price competitiveness and data on Korean patients to establish a foothold in the market. Unlike existing products that rely heavily on imports, Hanmi can manage the entire process from production to supply, which is a key differentiator.
Industry experts believe that Hanmi's recovery hinges on the successful market entry of efegludec. One industry insider noted, "Hanmi is likely to emphasize 'Korean-customized obesity treatment' as a key marketing point during the commercialization process of efegludec," adding, "How quickly the new drug drives performance will be crucial for the recovery of the core business."
* This article has been translated by AI.
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