US Prescription Trends Hold Steady in December
The author is an analyst of NH Investment & Securities. He can be reached at pk.park@nhqv.co. -- Ed.
US market prescription trends proved stable m-m in December. The US market shares of most domestic biosimilar players have been widening as of late, but further decline in their ASPs is being seen in 1Q23. Meanwhile, SK Biopharmaceuticals XCopri’s prescription growth rate rose y-y in December.
US prescription trends hold steady in December, but ASP decrease worsening in 1Q23
US biosimilar drug prescription trends in December held steady m-m (refer to page 2). Looking at Infliximab, the US market shares of Inflectra and Renflexis are on the rise, reaching 30.8% and 9.4%, respectively. Although Inflectra’s market share expansion has slowed somewhat due to Celltrion Healthcare’s lack of DP CMO, we nevertheless expect steady growth for it in 2023 thanks to stable capacity. Truxima’s market share further upped to 29.1%, with Celltrion Group sales falling due to ASP deterioration.
The downslide in ASP (updated in January) of Celltrion’s biosimilar drugs looks to be worsening compared to the previous level.
Meanwhile, prescription data for SK Biopharmaceuticals’ XCopri reached 17,133 TRx (+62% y-y, +6% m-m), confirming the largest growth among competing drugs (with the exception of Vimpat generics).
4Q22 earnings preview: Celltrion, Celltrion Healthcare
We expect Celltrion to show 4Q22 sales of W569.0bn (-8.5% y-y) and OP of W187.8bn (-15.4% y-y), remaining in line with our estimates but missing consensus. If excluding 3Q22 one-time unrealized gains (related to the sale of shares in the USA subsidiary), we estimate that its 4Q22 sales rose q-q. Overall OPM for 4Q22 likely strengthened slightly on an absence of unrealized profits, but biosimilars OP was likely sapped by a fall in Lonza CMO shipments.
For Celltrion Healthcare, we see 4Q22 sales of W555.1bn (-8.4% y-y) and OP of W77bn (+10.3% y-y), levels slightly below consensus. We believe that biosimilar drug growth is being led Inflectra in the US and Remsima SC in Europe. We size diagnostic kit sales estimated at W40bn. Meanwhile, SG&A expenses will likely show a q-q amplification on the reflection of: 1) W5bn in compensation for distribution costs to partners following the transition to direct sales in Europe; and 2) W8.7bn in employee incentive payments.
In addition to anticipating that the Celltrion Group will be preparing this year for aggressive market expansion from 2024, we draw attention to its merit as a defensive play thanks to stable earnings ballast. That said, we view US approval of Yuflyma (Adalimumab biosimilar) as presenting a risk factor, noting that approval prior to the existing release date target (Jul 1) is required.