A local analyst said investors should pay attention to Yuyu Pharmaceutical's new drugs.

In a report published on Monday, IBK Securities analyst Chae Yun-seok introduced two new drugs – YP-P10 and YY-DUT -- under development by Yuyu.

"Yuyu Pharmaceutical is developing YP-P10, which is indicated for dry eye syndrome by using synthetic peptides," Chae said.

The company has confirmed the anti-inflammatory mechanism and corneal epithelial cell healing effect in preclinical studies and obtained phase 2 investigational new drug (IND) approval from the U.S. Food and Drug Administration in April 2022, and registered the first clinical patient in July, he said.

Chae stressed that the phase 2 clinical trial will enroll a total of 240 patients in seven hospitals in the U.S., and the results are expected to be announced in June this year.

Chae also mentioned YY-DUT, the company's hair loss treatment under development.

"This drug plans to change the formulation to one-third of the size of the existing dutasteride and obtain approval for hair loss in the U.S.," Chae said.

According to Chae, dutasteride's hair loss prescription in the U.S. and Europe is still off-label, and sales at online pharmacies are limited.

"Accordingly, the company is currently planning to enter men's online pharmacies such as Hims and Roman, which sell finasteride-based hair loss treatments," Chae said.

Clinical trials will begin in 2024, and release will begin in 2026, Chae added.

Chae stressed Yuyu is switching focus from generics to new drug development.

"As of 2020, since the inauguration of CEO Yu Wan-sang), the company is securing new growth engines by expanding R&D expenses from approximately 1.9 billion won in 2019 to 4.7 billion won in 2020 and 2021, and 6.9 billion won until the third quarter of 2022," Chae said.

As of 1:30 p.m., Tuesday, Yuyu's shares stood at 6,170 won ($5), down 0.32 percent from the previous trading day.