Reasons to Watch HK Inno.N in the Second Half of the Year

HK Inno.N Corporation is emerging as a company to watch in the second half of the year, following strong performance and promising U.S. clinical trial results.

On the 9th, the securities industry predicted that HK Inno.N’s performance would continue to grow, driven by the growth of its gastroesophageal reflux disease treatment, K-Cab, and expected royalty income from technology transfers. Despite the medical strike, the impact has been smaller than expected.

Park Jae-kyung, an analyst at Hana Securities, projected HK Inno.N’s Q2 sales to reach KRW 227.1 billion ($173 million), an 11.1% increase year-on-year, and operating profit to grow by 56.1% to KRW 23.9 billion ($18.2 million). He noted that sales would align with consensus, while operating profit would slightly exceed expectations.

K-Cab’s strong performance and the success of its prescription drugs were major factors. Specifically, K-Cab’s Q2 prescription amount increased by 21.4% year-on-year to KRW 46.6 billion ($35.5 million), with growth accelerating after collaboration with Boryung. Sales in the cardiovascular and diabetes/nephrology segments are expected to grow by 117.4% and 95%, reaching KRW 68.6 billion ($52.2 million) and KRW 25 billion ($19 million), respectively. The H&B (Health & Beauty) segment, which saw a slowdown in Q1, is also expected to grow by 2.3%, reaching KRW 25.1 billion ($19.1 million).

Royalty income from technology transfers is also expected to be reflected in Q2. Last month, HK Inno.N out-licensed a new autoimmune disease drug candidate, co-developed with IM Biologics and Y Biologics, to Navigator Medicine, a U.S. pharmaceutical company.

Shin Min-soo, an analyst at Kiwoom Securities, estimated, "On July 17, HK Inno.N announced the out-licensing of the bispecific antibody drug candidate 'IMB-101' for KRW 1.3 trillion ($990 million). Assuming a 10% share, HK Inno.N is expected to receive approximately KRW 3 billion ($2.3 million) in upfront payments."

There is also growing anticipation for K-Cab’s entry into the U.S. market. K-Cab is undergoing Phase 3 clinical trials in the U.S. for 'non-erosive reflux disease' and 'erosive reflux disease' indications through its partner. The non-erosive reflux disease trial concluded in late May, and the erosive reflux disease trial is expected to conclude by the end of this year.

Kim Jung-hyun, an analyst at Kyobo Securities, stated, "The results for non-erosive reflux disease will be announced in the second half, and the erosive reflux disease results will be released next year. If K-Cab proves effective in U.S. trials, expectations for its entry into the U.S. market will rise, increasing the company’s valuation." He added, "This is a company to watch in the second half of the year."