Brokerage : Shinhan Securities
Analyst : Minyong Eom, Seokhyeon Yoon
Investment Rating : BUY (Maintained)
Target Price : KRW 570,000 (Maintained)
Core Momentum : The UK High Court’s favorable initial ruling against Halozyme’s infringement counterclaims sets a positive precedent for European and US patent proceedings, while multiple upcoming out-licensing deals are expected to outweigh Keytruda SC royalty adjustments.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / Target Price KRW 570,000 (Maintained) (Upside potential of 41.8% based on the February 20, 2026 closing price of KRW 402,000)
- Market Data: Market Cap KRW 21.51 Trillion / Shares Outstanding 53.5 Million (Floating Shares 79.6%) / 52-Week High KRW 559,000, Low KRW 317,500 / 60-Day Average Trading Value KRW 340.28 Billion / Foreign Ownership 13.5% / Major Shareholders: Soonjae Park and 4 affiliates 20.4%, Inwoo Hyung and 2 affiliates 5.1%
- Annual Financial Forecast (Shinhan Securities Estimates):
- 2025F: Revenue KRW 239.3 Billion, Operating Profit KRW 114.1 Billion (OPM 47.7%), Net Profit (Controlling) KRW 25.0 Billion, PER 967.3x, PBR 81.2x, ROE 8.7%, EV/EBITDA 205.1x
- 2026F: Revenue KRW 579.3 Billion, Operating Profit KRW 342.1 Billion (OPM 59.1%), Net Profit (Controlling) KRW 423.8 Billion, PER 51.2x, PBR 30.0x, ROE 83.0%, EV/EBITDA 61.0x
- 2027F: Revenue KRW 998.7 Billion, Operating Profit KRW 477.3 Billion (OPM 47.8%), Net Profit (Controlling) KRW 608.3 Billion, PER 35.6x, PBR 16.3x, ROE 59.3%, EV/EBITDA 42.7x
🚀 2. [Market Opportunities & Business Outlook]
- First UK Patent Decision Sides with Merck:
- On January 21, 2026, the UK Patents Court found Halozyme’s infringement counterclaims lacked specific factual grounds.
- In response to Merck’s revocation action against two Halozyme MDASE patents, Halozyme filed a Statement of Case on Infringement (SOCI) alleging Keytruda SC infringed its patents. However, the court ruled that the SOCI failed to establish 1) specific active hyaluronidase sequences, and 2) concrete examples demonstrating increased enzyme stability.
- The UK court rejected Halozyme’s stay of proceedings and appeal seeking time extensions, ordering compliance by February 4, 2026. While the main trial is ongoing, early procedural dynamics favor Merck.
- Positive Read-Across for European and US Legal Proceedings:
- The preliminary injunction granted by the German District Court in December was based on potential infringement of EP 622 (one of the two patents litigated in the UK); consequently, the analyst expects increased likelihood that the German court’s preliminary opinion in Feb–Mar could lead toward lifting the preliminary injunction.
- The ruling is also evaluated to positively influence the US PTAB’s Post-Grant Review (PGR) decision scheduled prior to June 2.
- Pipeline Out-Licensing Momentum to Outweigh Royalty Concerns:
- While the Jan 20 GSK deal eased immediate patent anxiety, public disclosure of Keytruda SC’s ~2% royalty rate had lowered baseline revenue expectations.
- However, the analyst expects execution of multiple additional out-licensing agreements within 2026 to enhance future cash-flow visibility and drive share price recovery.
📝 Editor’s Comment (Perspective)
The analyst views the UK Patents Court’s initial favorable direction as a pivotal milestone that provides meaningful legal precedent for ongoing disputes, potentially paving the way for the lifting of the German injunction and supporting a positive outcome in the US PTAB PGR proceedings. The overarching perspective prioritizes the easing of global patent overhangs and the medium-term cash flow contribution from multiple upcoming out-licensing deals over transient sentiment dampening tied to the disclosed 2% Keytruda SC royalty rate.
To verify whether this investment thesis progresses as expected, investors should primarily monitor the German Patent Court’s preliminary opinion in February–March regarding the potential lifting of the preliminary injunction, the US PTAB’s PGR decision before June 2, proceedings in the UK main trial, and the execution of new definitive out-licensing (L/O) agreements with global pharmaceutical partners throughout 2026. These developments can be verified through upcoming quarterly earnings releases, official company IR presentations, regulatory filings on DART/KRX, and international patent court dockets.
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