A local analyst said Hanmi Pharmaceutical's stock price will increase due to the earnings growth of Beijing Hanmi Pharmaceutical, backed by increased demand for cold medicine in China.
"Since China has been slowly changing into a With-Covid policy since December, the re-proliferation of Covid-19 is continuing in the country, and the demand for cold medicine has soared," Daol Investment and Securities analyst Lee Ji-su said. "Therefore, Beijing Hanmi Pharmaceutical will likely see strong growth for its cough and sputum medicine Itanjing and Yianping."
However, Lee stressed that the fourth-quarter growth of the company might not be as strong as expected due to reduced sales of the Chinese offshoot following the lockdown in China in October.
Lee also stressed that Hanmi has also resolved its biggest uncertainty after Spectrum Pharmaceutical, its U.S. partner, received a complete response letter (CRL) regarding the disapproval of poziotinib, a non-small cell lung cancer treatment.
"Since the company's share price has been falling since the U.S. Food and Drug Administration's (FDA) Oncologic Drugs Advisory Committee (ODAC) voted against the approval of poziotinib in September, the decline in stock prices due to the FDA's CRL was insignificant," Lee said. "The company also has a lot of research and development (R&D) momentum, such as HM12525A and HM15211, its non-alcoholic steatohepatitis (NASH) treatment."
The results of the phase 2 clinical trial of HM12525A and the interim results of the phase 2 clinical trial of HM15211 will be announced in the first quarter of next year, Lee added.
Based on the trial results, the company may be able to sign additional license out agreements, Lee added.
Taken together, Lee said her brokerage issued a new "buy" opinion on Hanmi Pharmaceutical's shares and increased the target price expected by his brokerage from 330,000 won to 370,000 won ($257 to $288).
As of 2:30 p.m., Wednesday, Hanmi Pharmaceutical's shares stood at 305,000 won, up 5.34 percent from the previous trading day.