Celltrion (068270) Summary
Core Content
Celltrion is a biopharmaceutical company focused on biosimilars and biologics. The document outlines recent financial results, upcoming product launches, and the company's future growth prospects. It highlights the company's strong performance in Q1 2017 and the potential for further improvements in the second half of the year due to the launch of biosimilars in key markets.
Key Highlights
Financial Performance (Q1 2017)
- Sales: Increased by 93.4% year-over-year (YoY) to KRW175.8 billion, exceeding consensus forecasts by 10.9%.
- Operating Profit: Rose by 256.5% YoY to KRW90.8 billion, surpassing forecasts by 22.0%.
- Net Profit: Jumped by 768.7% YoY to KRW68.2 billion, outperforming forecasts by 16.2%.
- Operating Margin: Improved to 51.6%, up by 23.6% YoY.
- Cost of Goods Sold (COGS): Reduced by 1.7% YoY to 37.1% of sales.
- SG&A Costs: Decreased by 21.9% YoY to 11.3% of sales.
US Market
- Inflectra (Remsima): Prescription sales in the US have been increasing, with wholesale acquisition costs reaching USD0.7m in January, USD1.58m in February, and USD4.41m in March 2017.
- Global Sales: Inflectra's global sales increased by 116.7% YoY to USD78 million in Q1 2017, with USD17 million in the US and USD61 million in other markets.
European Market
- Truxima: Approved by the EMA on Feb 23, 2017, and expected to launch in 27 EU member nations and EEA countries by end of Q2 2017.
- Market Share: Celltrion aims to gain market share for its biosimilars in Europe and the US.
Key Changes
| Metric |
New |
Old |
Diff |
| Recommendation |
BUY |
BUY |
- |
| Target Price |
KRW135,000 |
KRW135,000 |
0.0% |
| 2017E EPS |
KRW3,342 |
KRW3,399 |
-1.7% |
| 2018E EPS |
KRW4,586 |
KRW4,960 |
-7.5% |
Valuation Summary
| Metric |
2016 |
2017E |
2018E |
| P/E Ratio |
52.6 |
28.5 |
20.8 |
| P/B Ratio |
5.4 |
4.6 |
4.0 |
| EV/EBITDA |
36.5 |
21.5 |
15.7 |
| EPS Growth (% YoY) |
7.4 |
84.6 |
37.2 |
| ROE (%) |
11.4 |
16.6 |
19.9 |
Full-Year Forecast Revisions
| Metric |
Old |
New |
Diff (%) |
| Sales |
KRW564.2b |
KRW577.6b |
2.4 |
| Operating Profit |
KRW254.0b |
KRW252.7b |
-0.5 |
| Pre-Tax Profit |
KRW278.4b |
KRW269.6b |
-3.1 |
| Net Profit |
KRW236.6b |
KRW221.4b |
-6.4 |
Sales Forecasts
| Product |
2017E (KRWb) |
2018E (KRWb) |
Diff (%) |
| Remsima |
1,186 |
1,536 |
29.6 |
| Truxima |
478 |
670 |
39.7 |
| Herzuma |
390 |
561 |
38.3 |
Pipeline Biosimilars
| Project (Product) |
API |
Original Drug |
Major Indication |
Current Status |
| CT-P13 (Remsima) |
Infliximab |
Remicade (J&J) |
Auto-immune disease |
Approved in US, Korea, EU, Canada, Japan |
| CT-P06 (Herzuma) |
Trastuzumab |
Herceptin (Roche) |
Breast cancer |
Approved in Korea, EMA application |
| CT-P10 (Truxima) |
Rituximab |
Rituxan (Roche) |
Non-Hodgkin's lymphoma |
Approved in Europe, US FDA application |
| CT-P15 |
Cetuximab |
Eributix (Amgen) |
Colon cancer |
Completed pre-clinical trials |
| CT-P05 |
Etanercept |
Enbrel (Pfizer & Amgen) |
Rheumatoid arthritis |
Pre-clinical trials |
| CT-P17 |
Adalimumab |
Humira (AbbVie) |
Rheumatoid arthritis |
Pre-clinical trials |
| CT-P16 |
Bevacizumab |
Avastin (Roche) |
Colon cancer |
Pre-clinical trials |
| CT-P14 |
Palivizumab |
Synagis (AstraZeneca) |
Respiratory disease |
Manufacturing process development |
Major Biosimilars in Development
Europe
| Product |
Status |
| Humira |
Pre-clinical |
| Remicade |
Launched (Feb 2015) |
| Enbrel |
Pre-clinical |
| Lantus |
Filed (Nov 2016) |
| Avastin |
Pre-clinical |
| Herceptin |
Filed (Oct 2016) |
| Neulasta |
Filed (Nov 2016) |
| Rituxan |
Approved (Feb 2017) |
US
| Product |
Status |
| Humira |
Completed clinical trials |
| Remicade |
Approved (Apr 2017) |
| Enbrel |
Completed clinical trials |
| Lantus |
Filed (May 2016) |
| Avastin |
Phase III (Mar 2015) |
| Herceptin |
Completed clinical trials |
| Neulasta |
Filed (Aug 2016) |
| Rituxan |
Completed clinical trials |
Income Statement (Year-End Dec 31)
| Metric |
2015 |
2016 |
2017E |
2018E |
2019E |
| Sales |
529 |
578 |
892 |
1,186 |
1,536 |
| Cost of Goods Sold |
208 |
223 |
299 |
367 |
450 |
| Gross Profit |
321 |
354 |
593 |
818 |
1,087 |
| Operating Profit |
254 |
253 |
478 |
670 |
894 |
| Net Profit |
202 |
221 |
390 |
561 |
761 |
| EPS (parent-based) |
1,686 |
1,811 |
3,342 |
4,586 |
5,922 |
Cash Flow Statement
| Metric |
2015 |
2016 |
2017E |
2018E |
2019E |
| Cash Flow from Operations |
59 |
261 |
132 |
334 |
480 |
| Net Profit |
202 |
221 |
390 |
561 |
761 |
| EBITDA |
333 |
327 |
555 |
748 |
975 |
Market Outlook
- The company's performance is expected to improve throughout 2017 due to the launch of biosimilars in key markets.
- Celltrion's biosimilars are anticipated to gain significant market share in both the US and Europe.
- The company's financial guidance remains unchanged, with full-year sales and operating profit projected to increase by 49% and 93.4%, respectively.
Conclusion
Celltrion is on a strong trajectory, with notable financial improvements in Q1 2017 and a robust pipeline of biosimilars. The company's strategic focus on biosimilars and biologics, along with its expanding market presence in the US and Europe, positions it well for continued growth. The upcoming launches and approvals are expected to drive further performance improvements and enhance its market position in the biopharmaceutical sector.
