Hanmi Pharmaceutical's ₩285 Billion Technology Export Secures Growth Momentum for Biotech Sector

The recent sharp decline in Samsung Electronics' stock price is primarily attributed to the market's disappointment with its shareholder return policy. Unlike SK Hynix, Samsung Electronics is likely to prioritize dividends over share buybacks, raising concerns that share buybacks could be difficult due to issues with the Financial-Industrial Separation Law.

It is advised to maintain caution regarding the stock price until Samsung Electronics' performance is confirmed and Nvidia's earnings are announced.

There is a projection that the expansion of artificial intelligence (AI) infrastructure investment will act as a positive catalyst for the semiconductor industry in the mid-to-long term. However, the market also shows caution regarding the burden of financing AI infrastructure.

This is because funding primarily occurs through corporate bond issuance, and an increase in corporate bond issuance can cannibalize demand for government bonds, leading to an interest rate burden. With US Treasury yields remaining high, market caution coexists.

Market attention is concentrated on the upcoming Jackson Hole Meeting, where new Fed Chair Kevin Sea is scheduled to speak. His remarks are expected to provide important clues for gauging the Fed's future monetary policy stance.

Of particular interest will be his comments on the recent mention of increased buybacks by the US Treasury and the persistently high long-term Treasury yields.

Hanmi Pharmaceutical has signed a technology export agreement with Genentech for its UCN2 pipeline, a metabolic disease drug candidate, valued at ₩3.2 trillion. UCN2 is a substance known as Urocortin 2, and what's particularly noteworthy about this contract is the upfront payment of approximately ₩260 billion ($190 million) despite being in Phase 1 clinical trials.

This is an unusually high valuation for an early-stage new drug, demonstrating Hanmi Pharmaceutical's technological capabilities are recognized in the global market. UCN2 holds great promise as it possesses a new mechanism that can address the muscle loss side effects, which have been pointed out as a limitation of existing GLP-1 treatments.

Hanmi Pharmaceutical's new drug candidate, UCN2, is garnering attention because its mechanism is fundamentally different from the antibody-based treatments of competitors like Eli Lilly or Regeneron. In preclinical stages, this substance demonstrated both muscle mass increase and selective reduction of body fat, showing potential to overcome the limitations of existing obesity treatments.

Notably, unlike competitor substances that halted in Phase 2, UCN2 has already proven muscle mass preservation effects in preclinical stages, highly valuing it as a First-in-Class candidate.

D&D Pharmatech is reportedly developing its own pipeline similar to UCN2, the mechanism of Hanmi Pharmaceutical's technology transfer. This substance is currently in preclinical and early research stages.

This indicates a search for new possibilities in the obesity treatment market through a technological connection, rather than just a stock surge logic.

D&D Pharmatech plans to share its preclinical results at conferences or through poster presentations within the year. It is expected that discussions for technology transfer with global pharmaceutical companies will significantly expand once efficacy is confirmed in early clinical trials.

This is projected to increase the value of the UCN2 analogue pipeline currently under development and positively impact the overall biotech market.

HanAll Biopharma, with a current market capitalization of approximately ₩3 trillion, is undervalued by over 40% compared to Immunovant (IMVT 1401), which is valued at around ₩12.5 trillion in the US market. Immunovant is the only domestic new drug valued at over ₩10 trillion in the US market.

Even if the target market capitalization is adjusted from 50% to 40%, a valuation of over ₩5 trillion is considered necessary. It is projected that HanAll Biopharma has high potential for a rebound if investment sentiment in the pharmaceutical and biotech sector recovers.

It is encouraging that, despite the current high level of US 10-year Treasury yields, stock prices in the pharmaceutical and biotech sector are showing an upward trend. This suggests that if the macro environment improves and Treasury yields decline in the future, it will have an even more positive impact on this sector.

The upward trend despite high interest rates reflects inherent growth potential, and if environmental changes such as interest rate cuts occur, a sustained bull market for the pharmaceutical and biotech sector can be expected.

Recently, some venture capital stocks surged, including hitting the daily limit, due to issues related to Rebellions. However, it is pointed out that stocks that have already achieved a '점상한가' (limit-up from previous day's closing price without any trade) are realistically difficult for individual investors to purchase.

In such situations, it is suggested that a wise investment strategy would be to choose large-cap stocks that can actually benefit or stable alternative stocks, rather than chasing stocks that have surged due to individual issues.

SK Telecom is considered a key beneficiary regarding the Entropiq initial public offering (IPO), and its stake in Rebellions also acts as short-term momentum. The Entropiq IPO has few direct beneficiaries, further highlighting SK Telecom's symbolic importance.

Based on these factors, SK Telecom is expected to show an upward pattern, breaking through its previous highs.

BH is considered a leading beneficiary of the robotics momentum in the second half of the year and the launch of Apple's foldable phone, and is currently in a buyable range. After the highlight of Samsung's robotics momentum, trading volume temporarily plummeted, but the stock price remains at a bottom.

Based on Elliott Wave theory, it is projected to be a time to expect a third wave of ascent. An attempt to raise the stock price is anticipated soon.

The biotech sector is currently showing stock price increases despite high US bond yields. This suggests that individual momentum within the sector is at play amidst macroeconomic uncertainty.

If US bond yields peak and begin to decline, the biotech sector is expected to gain additional upward momentum. Given its strength even at current interest rate levels, a larger rebound is possible if the macroeconomic environment eases.

Therefore, it is important to keep an open mind regarding the upside of existing biotech stocks and to formulate investment strategies while monitoring bond yield trends. The biotech industry is sensitive to macroeconomic variables, but also possesses strong technological momentum, making its future trajectory noteworthy.

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