[THE INVESTOR] Yuhan’s earnings in the third quarter have been a major disappointment, said SK Securities on Oct. 31 lowering the target price to 230,000 won (US$201.77) from 300,000 won.
Its operating profit has tumbled from increasing R&D and personnel costs as well as swelling losses of subsidiaries. Although revenue will return to an upward cycle in the fourth quarter when it releases a new product, costs will continue to rise due to its growing pipeline, said analyst Lee Dal-mi.
Its most promising new drug candidate, a treatment for non-small cell lung cancer, will complete second-phase clinical trials within this year and will be rolled out provisionally next year in Korea. There still remains expectations for a license-out deal, she added maintaining a “buy” recommendation.
By Hwang You-mee (firstname.lastname@example.org)