When will it rise? Why are only Korean pharma and bio like this? | Kim Seon-ah, Hana Securities Research Center Senior Research Fellow [Double Up]

Summary

Kim Seon-ah of Hana Securities discusses why Korean pharma/biotech stocks have lagged global peers and remain under supply pressure. She highlights China’s rapid biotech growth due to speed, cost, and integrated ecosystems, but argues Korean large-caps like Celltrion, SK Biopharm, and Samsung Biologics have the key ingredients to produce innovative drugs in about 3 years. She also lays out a Q4 recovery thesis driven by the ESMO conference, seasonal tech-transfer deal surges, and potential KOSDAQ rebalancing.

• Korean biotech clearly decoupled from global biotech (IBB) since June and is under supply-driven selling.
• Alteogen's noise was from a misreport, and the company remains KOSDAQ’s market cap leader.
• At the BIO USA conference, China’s rapid biotech ascent was a major theme; the US worries about losing competitiveness.
• China excels in speed, low cost, AI integration, BD capabilities, and efficient multi-center clinical trials.
• Despite this, Korean large-cap pharma have strong R&D manpower, capital, and BD track records to deliver novel drugs in ~3 years.
• Near-term catalysts for Korean biotech: ESMO in October, Q4 tech-transfer deal seasonality, and KOSDAQ rebalancing around Sept-Oct.
• The speaker advises focusing on fundamentals and suggests the current weakness could be a buying opportunity ahead of Q4.