Oscotec (039200.KQ) is entering a mid-to-long-term rerating phase following its corporate governance restructuring, according to analyst assessment.
"Oscotec has secured a stable cash flow foundation through two technology transfers to global big pharma companies and the commercialization of lazertinib," said Kwon Hae-soon, analyst at Eugene Investment & Securities, on Wednesday. "Given its multiple promising pipeline candidates expected to achieve additional technology transfers by 2028, there is sufficient room for mid-to-long-term share price appreciation."
Oscotec shares have risen 22% year-to-date, outperforming the broader market by approximately 3 percentage points, but remain about 7% below their March peak. "Following the announcement of the technology transfer for Alzheimer's disease candidate ADEL-Y01, profit-taking emerged, and some concerns over management stability were reflected in the price," Kwon said. "External variables in April compounded the situation, pushing the stock into a correction phase."
The governance restructuring has mitigated Oscotec's structural risks, according to analysts. "The company introduced a professional management system and strengthened its board-centered advanced governance structure at the March shareholders' meeting, reducing structural risks," Kwon said. "This will set a new standard for domestic biotech governance going forward." She added that shareholder value would continue to rise as drug development achievements and mid-to-long-term growth strategies become more concrete.
The merger with subsidiary Genoscope is identified as a key mid-to-long-term catalyst. Oscotec is pursuing the merger to enhance R&D and operational efficiency while consolidating its global drug development capabilities under a single focal point. "While schedule delays are possible due to disagreements with some shareholders, the company is actively communicating to reach an agreement as soon as possible," Kwon said, projecting that specific integration direction and methods would become visible within this year.
Global sales expansion of lazertinib is also anticipated. "Global market sales will begin in earnest from the second half," Kwon said. "Market penetration is expected to increase through improved prescription convenience with the launch of Rybrevant subcutaneous formulation, geographic expansion of global launches, and release of final median overall survival data." Global sales of lazertinib combination therapy are projected to reach $3 billion to $4 billion by 2028, with approximately 200 billion won in revenue expected to flow to Oscotec.
A multi-layered pipeline structure that reduces dependence on single events is also cited as a strength. Multiple candidates are under development, including sebidofleni for immune disorders, GNS-3545 for idiopathic pulmonary fibrosis, OCT-648 for renal fibrosis, and OCT-598 targeting anticancer resistance. "Sebidopleni is in business development discussions with global biotechs based on an indication expansion strategy following completion of global Phase 2 trials," Kwon explained. "GNS-3545 and OCT-648 are targeting technology transfers in 2027-2028." OCT-598 also entered global Phase 1 trials in the second half of last year, with technology transfer expected after 2028. "This pipeline structure provides a foundation for generating repeated technology transfer momentum over the mid-to-long term without relying on single events," Kwon said.
Eugene Investment & Securities maintained its "Buy" rating and target price of 75,000 won for Oscotec.
