Samsung Biologics and Celltrion posted record quarterly results in Q2, driving a recovery in Korean biotech stocks despite broader market declines. The KRX Bio TOP 10 index rose 6.92% over the recent week, while the KOSPI fell 10.73% during the same period, according to Korea Exchange data released on the 29th. Samsung Biologics reported Q2 revenue of 1.3209 trillion won and operating profit of 586.4 billion won, up 30.2% and 22.9% year-over-year respectively. Celltrion's Q2 revenue reached 1.3937 trillion won, a 45.0% increase, with operating profit surging 86.3% to 451.8 billion won. The biotech sector had faced downward pressure this year due to capital flows into semiconductors, interest rate concerns, and clinical trial uncertainties at some companies.
The KRX Bio TOP 10 index, which tracks the top 10 biotech companies by market capitalization, closed at 2059.75 on the previous day, down 37.13 points (1.77%). This performance was considered strong compared to the KOSPI's 10.84% decline and the KOSDAQ's 7.72% drop on the same day. Samsung Biologics stock rose 11.04% from 1.395 million won on the 21st to 1.549 million won on the 28th. During the same period, Celltrion gained 3.38% and Alteogen rose 8.61%.
According to KB Securities, the WICS Pharmaceuticals & Biotechnology index, which represents domestic listed pharmaceutical and biotech companies, fell 30.4% from the beginning of the year through the 24th. The KOSDAQ Pharmaceutical index declined 40.5% during the same period.
Samsung Biologics Records Q2 Revenue of 1.3209 Trillion Won
Samsung Biologics recorded Q2 revenue of 1.3209 trillion won and operating profit of 586.4 billion won, increases of 30.2% and 22.9% respectively compared to the same period last year. First-half operating profit reached 1.1672 trillion won, exceeding 1 trillion won for the first time on a semi-annual basis.
On the 24th, the day after the earnings announcement, Samsung Biologics stock jumped 10.08%, recovering the 1.5 million won level for the first time in three months. Following the earnings release, 17 securities firms issued 'buy' ratings on Samsung Biologics. The average target price was 2.01909 million won, approximately 30% higher than the closing price on that day.
The Songdo Plant 5 has started certification production and revenue will be reflected starting in Q3. Products manufactured at the Rockville facility will also be counted as revenue from Q3 after quality inspection. Samsung Biologics completed the acquisition of Polypeptide Group, a contract development and manufacturing organization (CDMO) for peptide drugs. Through the acquisition, the company plans to expand production bases to the United States, Europe, and India, and extend its business from antibodies to peptides and antibody-drug conjugates (ADC).
Seo Geun-hee, a researcher at Samsung Securities, stated, "Cumulative orders in Q2 reached $21.7 billion, and order inquiries are recovering in the second half as tariff uncertainty eases. Second-half growth drivers include full reflection of Plant 5 and Rockville plant revenue, and maintaining full operation of Plants 1-4."
Celltrion Achieves Q2 Revenue of 1.3937 Trillion Won
Celltrion's Q2 revenue was 1.3937 trillion won, up 45.0% from the same period last year, and operating profit was 451.8 billion won, an 86.3% increase. Revenue exceeded Samsung Biologics by 72.8 billion won, marking the first time Celltrion ranked first in quarterly revenue.
The improvement in performance was led by high-margin new products. Revenue from new products including Remsima SC, Zymfentra, Yuflyma, Vegzelma, and Steqeyma increased 76% year-over-year, accounting for 65% of total revenue. Quarterly revenue from five new products launched last year also exceeded 300 billion won. Analysts note that profitability improved along with revenue as the product mix shifted toward high-margin products.
Han Seung-yeon, a researcher at NH Investment & Securities, stated, "The sector has been neglected due to market concentration over the past year, but we believe it has reached a bottom with defensive characteristics and record earnings growth. The current moment, where mid-term earnings visibility and valuation appeal are significantly highlighted, is an opportune time for new entry."
Alteogen Announces 30% Stock Dividend and Patent Dispute Progress
Alteogen has not yet released Q2 results but demonstrated profit generation capability based on technology exports starting in Q1. Q1 revenue was 71.6 billion won and operating profit was 39.3 billion won, recording an operating profit margin of 54.9%. According to financial information provider FnGuide, the Q2 consensus (average of securities firm estimates) was revenue of 65.5 billion won, a 251.2% increase from the same period last year, and operating profit was expected to turn from a 400 million won loss to a 24.3 billion won profit.
Recently, the decision to tentatively postpone KOSPI transfer listing and remain on KOSDAQ, a 30% stock dividend, and partial resolution of patent uncertainty acted as short-term rebound factors. The company stated it will maintain KOSDAQ listing at this point considering KOSDAQ revitalization policies and market environment, but will review the transfer listing decision again later. The company decided on a stock dividend allocating 0.3 new shares per common share and redeemable convertible preferred share.
Patent uncertainty surrounding Alteogen's subcutaneous injection formulation conversion technology 'ALT-B4' was partially alleviated. U.S.-based Merck (MSD) launched the Keytruda subcutaneous injection product 'Keytruda Curex' using ALT-B4, but competitor Halozyme filed a lawsuit claiming the product infringes its patents. Recently, a Dutch court rejected Halozyme's injunction application, and rulings in the United States and United Kingdom also found Halozyme's related patents invalid, creating a favorable trend for MSD.
However, the year-to-date declines of these leading biotech stocks have not fully recovered. Compared to the beginning of the year, Samsung Biologics is down 7.96% and Celltrion is down 8.09%. Alteogen fell 35.12% during the same period.
Analysts Cite Undervaluation of Korean Biotech Sector
Securities firms evaluated that the corporate value of domestic biotech stocks has become excessively low compared to the industry's fundamental strength. Lee Sun-kyung, a researcher at SK Securities, stated, "Meaningful achievements such as numerous technology transfers in the first half and successful global mergers and acquisitions that will remain in the history of the domestic pharmaceutical industry were not reflected, while the sector reacted immediately to negative news from individual companies and expanded into risks across the entire sector. Considering the global biotech industry situation and the achievements of domestic biotech companies, there is a high possibility that positive factors that have been discounted across the sector will be belatedly reflected and lead to revaluation."
FAQ
What were Samsung Biologics' Q2 financial results?
Samsung Biologics recorded Q2 revenue of 1.3209 trillion won and operating profit of 586.4 billion won, representing year-over-year increases of 30.2% and 22.9% respectively. First-half operating profit reached 1.1672 trillion won, exceeding 1 trillion won for the first time on a semi-annual basis.
How did the KRX Bio TOP 10 index perform compared to broader Korean stock indices?
The KRX Bio TOP 10 index rose 6.92% over the recent week, while the KOSPI fell 10.73% and the KOSDAQ declined 6.30% during the same period, according to Korea Exchange data released on the 29th.
What corporate actions did Alteogen announce?
Alteogen decided to tentatively postpone KOSPI transfer listing and remain on KOSDAQ, considering KOSDAQ revitalization policies and market environment. The company also announced a 30% stock dividend, allocating 0.3 new shares per common share and redeemable convertible preferred share.
