Oscotec (039200.KQ) is poised for a corporate value re-rating following its global licensing deal for an autoimmune disease drug, according to an analyst report. The Korean biotech recently sealed its third global technology transfer agreement, following deals for lazertinib and an Alzheimer's drug (ADEL-Y01), and shareholder value is expected to be maximized if Genosco is fully integrated as a wholly owned subsidiary.
In a report Friday, Shinhan Securities said, "Following the licensing of ADEL-Y01 to Sanofi last December, the company has signed a follow-up global deal in just six months." The brokerage added, "Oscotec has demonstrated R&D capabilities across oncology, CNS (central nervous system), and immunology, and deals for its pulmonary fibrosis and chronic kidney disease drugs could be signed at any time."
Oscotec announced on the 1st of this month that it had signed a licensing agreement with U.S. biotech venture Agios for SYK inhibitor "cevidoplenib." The total deal size is up to approximately 1 trillion won (about $665 million), of which the non-refundable upfront payment is 37.5 billion won and development milestones amount to 210 billion won. Proceeds will be split between Oscotec and its subsidiary Genosco at a 75-to-25 ratio. The indication can be expanded to as many as three additional targets beyond immune thrombocytopenia (ITP).
SYK is an enzyme that mediates signal transduction within immune cells, triggering inflammation and autoimmune diseases. Cevidoplenib blocks inflammatory responses by inhibiting SYK, a protein overexpressed in various immune cells including B cells and macrophages. Oscotec previously completed global Phase 2 trials targeting immune thrombocytopenia and rheumatoid arthritis.
Oscotec is also in discussions for two additional licensing deals on follow-up drug candidates by 2027. The company plans to accelerate business development for its pulmonary fibrosis drug "GNS-3545" after confirming Phase 1 results within this year. Its chronic kidney disease drug "OCT-648" is scheduled to enter preclinical trials in June, with the goal of out-licensing to a global pharmaceutical company before entering Phase 1.
Shinhan Securities said, "The kidney disease space is an area of interest for many global pharmaceutical companies including Boehringer Ingelheim and Novartis, and a licensing deal is anticipated." The brokerage added, "The integration of Genosco as a subsidiary, a re-rating trigger, is progressing smoothly, and shareholder value is expected to be maximized upon full subsidiary integration." It further projected, "We judge Oscotec to be the most undervalued biotech relative to the size of its global licensing deals, with very significant medium- to long-term upside potential."
