U.S. pharmaceutical companies Johnson & Johnson (J&J) and Merck (MSD), which possess cancer treatments generating annual revenues in the trillion-won range, are under scrutiny from the domestic bio industry regarding the approval status of their subcutaneous (SC) formulations by the U.S. Food and Drug Administration (FDA). This is expected to significantly impact not only these two companies but also their domestic partners Yuhan Corporation and Alteogen regarding stock trends in the latter half of the year and future performance.
Cancer drugs administered via intravenous (IV) injection take 4 to 5 hours to administer, while the SC formulation can greatly reduce this time to within 5 minutes, allowing patients to administer the medication at home. Global pharmaceutical giants are developing their existing cancer treatments into SC formulations. If the SC formulation, which can significantly reduce the time for drug administration, is released, it could lead to an expansion of prescriptions in the global market and subsequently an increase in revenue.
The SC formulation of J&J's cancer drug, Librevant, is expected to receive FDA approval in the second half of this year. It previously received approval in Europe.
According to J&J's announcement on June 16 (local time) regarding its second-quarter performance, the global revenue from the combination therapy of Librevant and Yuhan Corporation's Leczira (local product name Razakruz) totaled $179 million (approximately 250 billion won). This confirms the growth trend of the combination therapy, which recorded revenue of $141 million (approximately 196.1 billion won) in the first quarter of this year.
As the prescriptions for the combination therapy of Librevant SC and Leczira expand, Yuhan Corporation's revenue is expected to increase, making it a significant growth driver for Yuhan Corporation.
MSD has also developed the cancer drug Keytruda in SC formulation. The FDA is expected to make its final approval decision in September. MSD aims to launch Keytruda SC as the first subcutaneous immune checkpoint inhibitor following FDA approval in October.
An immune checkpoint is a protein that marks normal cells so immune cells do not mistakenly attack them. Cancer cells often disguise themselves as immune checkpoints to evade immune cell attacks. Immune checkpoint inhibitors block these tricks of cancer cells, helping immune cells properly recognize and attack cancer cells.
Keytruda SC incorporates the formulation modification technology called 'human hyaluronidase' from the domestic company Alteogen. Alteogen's human hyaluronidase technology improves the permeability of subcutaneous tissues, allowing the drug to rapidly distribute in the tissues and be absorbed into the bloodstream.
When MSD launches Keytruda SC, Alteogen will receive milestone payments associated with approval and commercialization, as well as separate royalties based on sales.
Keytruda is the world's top-selling cancer drug, with sales last year growing 18% year-over-year to $29.5 billion (approximately 41 trillion won). In the first quarter of this year, Keytruda's sales rose 4% compared to the same period last year, recording approximately $7.2 billion (approximately 10 trillion won). Second-quarter results are expected to be announced on the 29th.
Heo Hye-min, a pharmaceutical and bio research analyst at Kiwoom Securities, noted, 'J&J reported strong second-quarter performance, causing its stock to surge 6% from the previous day, and stocks of BMS, Amgen, Gilead, GSK, Eli Lilly, and AbbVie also rebounded simultaneously.' This has been analyzed as a result of the Trump administration's tariff exemption confirming that the expected tariff impact on J&J has been halved.
The SC formulation could boost the strong performance of global pharmaceutical companies. This is why domestic companies that provide the foundational technologies are receiving favorable evaluations in the market. Research analyst Heo stated, 'The FDA approvals of the SC formulations being developed by J&J and MSD will be key momentum for the stock price increases of Yuhan Corporation and Alteogen.'