KOSPIBiotech & Pharma000100

Yuhan

₩74,400▼ 0.53%2026-10-02 close

Market Cap

₩5.5T

Turnover

₩8.9B

Volume

120,000 shares

Shares out.

73.6M

PER

25.6×

PBR

2.5×

EPS

₩3,176

Dividend Yield

0.74%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩600 per share · Prices as of the 2026-10-02 close

Report overview

Lazertinib Royalties Lift Profits; What Comes Next

Yuhan's profits rose sharply in 2025 and the first half of 2026 on lazertinib milestones and royalties, yet quarterly volatility tied to the timing of license income and the absence of a new out-licensing deal stand out in equal measure.

1
Consolidated 2025 revenue reached 2.1866 trillion won with operating profit of 104.4 billion won, lifting the operating margin to 4.8% from 54.9 billion won of operating profit in 2024.
2
Second-quarter 2026 revenue of 639.5 billion won and operating profit of 66.9 billion won pushed the quarterly operating margin above 10%, which the company attributed mainly to a 30 million dollar European commercialization milestone for lazertinib.
3
Operating profit was only 8.8 billion won in the first quarter of 2026, showing how widely quarterly earnings swing with the timing of license income recognition.
4
Johnson & Johnson reported 546 million dollars in first-half 2026 sales for the lazertinib-Rybrevant combination, up about 70% year on year, expanding Yuhan's royalty base.
5
The generic pricing rate cut from 53.55% to 45% effective August 1 and six years without a new out-licensing deal are cited as pressure points.

Business structure

Founded in 1926, Yuhan Corporation is one of Korea's established pharmaceutical companies, with revenue split across a pharmaceutical division covering prescription (ETC) and over-the-counter (OTC) drugs, an overseas division centered on active pharmaceutical ingredient (API) exports, a consumer health business, and license income from the lazertinib out-licensing deal.

According to Seoul Economic Daily (July 30, 2026), second-quarter 2026 pharmaceutical division sales rose 11.3% year on year to 366.8 billion won, of which prescription drugs accounted for 302.8 billion won and non-prescription products 63.9 billion won.

The same report put overseas division sales, including subsidiary Yuhan Chemical which supplies APIs to Gilead Sciences, at 121.0 billion won, up 5.4%. TheBio reported in August 2026 that first-half license income of 63.9 billion won equaled 5.5% of total revenue, with 92.2% of it concentrated in the second quarter.

Lazertinib was in-licensed from Oscotec and Genosco in 2015, developed clinically by Yuhan, and out-licensed to Janssen in 2018; Yuhan sells it domestically while Johnson & Johnson holds overseas development and commercialization rights.

Money Today reported on May 14, 2026 that roughly 300 million dollars of the total 950 million dollars in milestones including the upfront payment has been received, and Bizwatch reported that about 40% of milestone payments is shared with Oscotec and Genosco under the in-licensing contract.

In the domestic prescription market the company competes with other large Korean drugmakers across chronic-disease therapies and in-licensed products, and off-patent in-licensed items such as the diabetes drugs Trajenta and Jardiance are exposed to generic competition.

Consolidated subsidiaries include ImmuneOncia, focused on immuno-oncology, and Addpharma, focused on incrementally modified drugs. In sum, high-margin license income sits on top of a stable domestic drug and API export base, and the size and timing of that license income shape the profit profile.

Earnings trend

Quarterly revenue · Operating profit

₩579B₩49.9B25Q2₩570B₩22B25Q3₩546.1B₩26.1B25Q4₩526.8B₩8.8B26Q1₩639.5B₩66.9B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩1.8T₩36B2022₩1.9T₩56.8B2023₩2.1T₩54.9B2024₩2.2T₩104.4B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩579B	₩49.9B	8.6%
2025Q3	₩570B	₩22B	3.9%
2025Q4	₩546.1B	₩26.1B	4.8%
2026Q1	₩526.8B	₩8.8B	1.7%
2026Q2	₩639.5B	₩66.9B	10.5%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩1.8T	₩36B	₩90.6B	2.0%	4.6%	23.2%
2023	₩1.9T	₩56.8B	₩136.1B	3.1%	6.6%	33.9%
2024	₩2.1T	₩54.9B	₩70.7B	2.7%	3.4%	36.8%
2025	₩2.2T	₩104.4B	₩194.1B	4.8%	8.4%	36.3%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

On an annual basis, revenue rose steadily from 1.7758 trillion won in 2022 to 1.8590 trillion in 2023, 2.0678 trillion in 2024 and 2.1866 trillion in 2025, while operating profit moved from 36.0 billion won to 56.8 billion, 54.9 billion and then jumped to 104.4 billion won in 2025.

The operating margin improved from 2.0% in 2022, 3.1% in 2023 and 2.7% in 2024 to 4.8% in 2025, still in the low single digits for a company with more than 2 trillion won in sales.

Net profit attributable to owners of 194.1 billion won in 2025 far exceeded operating profit of 104.4 billion won, indicating a sizable contribution from non-operating items.

Quarterly, after revenue of 579.0 billion won and operating profit of 49.9 billion won in the second quarter of 2025, results eased to 570.0 billion and 22.0 billion in the third quarter and 546.1 billion and 26.1 billion in the fourth, when net profit attributable to owners of 114.4 billion won dwarfed operating profit of 26.1 billion won.

The first quarter of 2026 brought revenue of 526.8 billion won but only 8.8 billion won of operating profit, a 1.7% margin, which brokers and media attributed to delayed recognition of the European lazertinib milestone.

The second quarter of 2026 delivered revenue of 639.5 billion won and operating profit of 66.9 billion won for a 10.5% margin, and Yuhan said in its preliminary filing that separate-basis quarterly revenue and operating profit were both record highs.

For the first half combined, revenue was 1.1662 trillion won and operating profit 75.7 billion won, with most of the profit concentrated in the second quarter.

TheBio noted that license income carries low cost of goods and selling expenses so a high share flows through to profit, which explains the margin lift but also implies margins normalize quickly in quarters without milestone income.

On the balance sheet, the debt-to-equity ratio stood at 36.3% at end-2025 with equity of 2.3623 trillion won and operating cash flow of 106.2 billion won, a relatively light debt load for the revenue base.

Industry analysis

Korea's pharmaceutical industry is under structural pressure from the drug pricing reform that took effect on August 1, 2026.

According to Yakup, the base pricing rate for generics and off-patent originals falls from 53.55% to 45%, alongside new multi-product listing management and stepped price cuts linked to the number of identical products.

Policy remarks reported by MedipanaNews indicate the government intends to redirect spending toward innovation, including price premiums for innovative pharmaceutical companies tied to research and development.

Rapportian reported that firms with new drugs and export bases can gain share through the reshuffle while generic-dependent firms bear the heaviest burden; Yuhan holds both proprietary drug royalties and API exports, giving it relatively more cushion.

Even so, generic exposure on off-patent in-licensed products is a pressure point shared across the domestic prescription market.

On the demand side, the lazertinib-Rybrevant combination competes with AstraZeneca's Tagrisso monotherapy in first-line EGFR-mutated non-small cell lung cancer, and Money Today reported the combination is expanding approvals from the United States into Europe, Japan and China.

In cycle terms, the company is transitioning out of the early commercialization phase dominated by milestone recognition and into a period where sales-linked royalties carry more weight.

Relative to domestic peers, its structure differs from large CDMO or biosimilar-focused companies, so the pace at which its global partner expands prescriptions distinctly drives the earnings trajectory.

Outlook

In its second-quarter announcement the company said its business plan set at the start of the year is proceeding smoothly and that it expects growth to continue in the second half.

Second-half profit expectations, however, have been lowered: HuffPost Korea cited an NH Investment & Securities forecast of 609.4 billion won in third-quarter revenue and 13.7 billion won in operating profit, implying higher sales but lower operating profit.

The same report pointed to the absence of the one-off second-quarter milestone and the start of full-scale research spending at subsidiary ImmuneOncia after its rights offering as drags on consolidated operating profit, and noted a view that cumulative first-half lazertinib royalties of 12.4 billion won make the annual target of 45 billion won difficult to reach.

On the prescription side, Insight cited iM Securities' view that the permanent J-code for the subcutaneous Rybrevant formulation, effective July 1, should show a revenue effect from the third quarter.

In the pipeline, Edaily reported in May 2026 that R&D head Kim Yeul-hong presented five post-lazertinib candidates and said out-licensing of the allergy drug recigersept was imminent, while Sisa Journal-e reported that no out-licensing announcement had emerged as of August.

Daol Investment & Securities, in a July 31, 2026 report, projected about 92 billion won of license income for the year and placed the recigersept clinical readout between late 2026 and early 2027.

On governance, CEO Cho Wook-je's term expires on March 15, 2027 and the company's corporate governance report calls for a candidate to be confirmed roughly six months before the shareholder meeting, leaving the next leadership lineup as a near-term item to watch.

Ultimately the second half hinges on how far royalties and core-business growth offset the milestone gap, and whether a new out-licensing deal is actually signed.

Valuation

PER

25.6×

PBR

2.5×

ROE

10.4%

EPS

₩3,176

BPS

₩31,923

Dividend per share

₩600

The earnings multiple is calculated on the most recent four quarters of profit, and that profit contains one-off elements such as the European lazertinib milestone and the large non-operating gain in the fourth quarter of 2025.

Compared with the range in which established Korean pharmaceutical companies have historically traded, the current multiple sits near the upper end, which is often read as the market pricing in expected growth in lazertinib royalties.

The shares trade at a premium to net assets, reflecting a sector where value attaches to intangible royalty streams rather than the size of the asset base.

The dividend yield runs below the broader Korean market average, consistent with a policy weighted toward reinvestment in research and development rather than payouts.

Views on valuation diverge: Shinhan Securities said on May 6, 2026 that it cut its target price to 120,000 won from 170,000 won on royalties falling short of expectations while maintaining a buy rating, and Daol Investment & Securities said on July 31, 2026 that it lowered its target price to 120,000 won from 140,000 won while also maintaining a buy rating.

KOSAI neither endorses nor disputes these views, and simply notes that the starting point for interpreting any multiple is which level of profit is treated as normalized.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Income mix shifting from milestones to royalties

TheBio analyzed that lazertinib income is shifting from one-off milestones toward royalties tied to actual sales. Based on Johnson & Johnson disclosures, first-half 2026 sales of the lazertinib-Rybrevant combination reached 546 million dollars, up about 70% year on year.

As the sales base widens, the share of recurring income in the mix rises. Only about one third of the total 950 million dollars in contracted milestones has been received so far, leaving the remainder as a contractual item outstanding.

Core drugs and API exports growing together

Seoul Economic Daily reported that second-quarter 2026 pharmaceutical division sales rose 11.3% year on year while the overseas division grew 5.4%.

An independent research report cited by NewsMP said API exports by the overseas division accounted for about 14.3% of 2025 revenue, underpinned by long-term supply contracts with global pharmaceutical companies. Annual revenue trends confirm the top line has expanded every year even excluding license income.

Industry commentary also holds that companies combining export and proprietary-drug bases have relatively more cushion during the pricing policy transition.

Low leverage and cash generation

The debt-to-equity ratio was 36.3% at end-2025, higher than 23.2% in 2022 but still low, with equity of 2.3623 trillion won. Operating cash flow of 106.2 billion won in 2025 was broadly in line with operating profit of 104.4 billion won.

Sisa Journal-e reported that research spending expanded from 180 billion won in 2022 to 268.8 billion won in 2024 and 242.4 billion won in 2025. The balance sheet capacity to absorb pipeline investment is cited as a supportive factor.

Bear factors

Quarterly profits swing with license recognition timing

Operating profit was just 8.8 billion won in the first quarter of 2026 before jumping to 66.9 billion won in the second, and media and brokers commonly attribute much of the gap to the timing of European milestone recognition.

In 2025 as well, reports indicated that 70.3 billion won of the 104.1 billion won annual license income landed in the fourth quarter. Under such a structure, a single quarter says little about underlying earnings power. In quarters without milestones, core-business margins have repeatedly reverted to the low single digits.

Six years without a new out-licensing deal

HuffPost Korea reported that Yuhan has not landed a new out-licensing deal in the six years since lazertinib in 2018, two MASH candidates in 2019 and a functional gastrointestinal drug in 2020.

The same report noted the value-up plan announced in October 2024 targeted at least one out-licensing deal per year, a goal missed in its first year of 2025. Sisa Journal-e reported that the third-quarter out-licensing announcement anticipated by R&D head Kim Yeul-hong had not materialized as of August. The timing of such deals is inherently hard to predict, leaving lingering uncertainty.

Pricing reform and generic encroachment

From August 1, 2026 the base pricing rate for generics and off-patent originals fell from 53.55% to 45%, and multi-product listing management was introduced.

HuffPost Korea reported that the reform could pressure Yuhan's prescription drug results and flagged possible sales declines for off-patent in-licensed products such as Trajenta and Jardiance. IQVIA was reported as projecting that the impact of price cuts could widen to 10-14% over the medium to long term. Given continued reliance on the domestic prescription market, the policy variable warrants ongoing monitoring.

Risk factors

Partner dependency risk

Johnson & Johnson holds global development and commercialization rights to lazertinib outside Korea, so Yuhan's license fees and royalties depend on the partner's sales strategy and prescription expansion pace.

The recognition timing of the unreceived portion of the 950 million dollars in milestones is also tied to the partner's regulatory progress. The European milestone was in fact pushed back as country-by-country reimbursement listings proceeded. Competing drugs' clinical data and pricing moves are further variables outside the company's control.

R&D failure and cost risk

Among the five candidates presented as post-lazertinib assets, recigersept is in global Phase 2 while the others are in Phase 1 or Phase 1/2, all relatively early.

The MASH candidate YH25724 was out-licensed to Boehringer Ingelheim in 2019 and later returned, and Yuhan newly obtained approval for a domestic Phase 1 trial in 2026. Clinical failure or delay would directly affect out-licensing plans and the timeline for recouping research spending.

Expanded research spending at subsidiary ImmuneOncia has been reported as a potential drag on consolidated operating profit.

Leadership transition and policy risk

CEO Cho Wook-je's term expires on March 15, 2027, and the company's corporate governance report requires the CEO candidate to be confirmed roughly six months before the shareholder meeting.

Sisa Journal-e reported that a co-CEO structure is among the possibilities discussed, and any shift in research or business strategy under new leadership is something to verify.

In addition, as the government's pricing reform enters implementation, segment profitability may shift depending on item-level ceiling price adjustments. Pressure on global drug pricing from the United States is also cited as a shared external variable for the industry.

What to watch next

During September 2026
Watch for confirmation of the next CEO candidate. Sisa Journal-e reported that a board decision is imminent given the rule requiring confirmation about six months before the annual shareholder meeting, and the new leadership lineup offers a clue to continuity in research strategy.
Mid-October 2026
Check the lazertinib-Rybrevant combination sales and ex-US growth in Johnson & Johnson's third-quarter results. Whether the J-code for the subcutaneous Rybrevant formulation, effective July 1, translates into wider prescriptions serves as a leading indicator for royalty size.
Late October to early November 2026
Third-quarter results will show underlying profitability in a quarter without milestones. HuffPost Korea cited an NH Investment & Securities forecast of 609.4 billion won in revenue and 13.7 billion won in operating profit, implying a decline, so the key is how actual royalties and core margins compare with that bar.
Fourth quarter of 2026
Watch for whether a recigersept out-licensing deal is signed and whether median overall survival data from the MARIPOSA trial is disclosed. Shinhan Securities said in a May 2026 report that the data was scheduled for release in the second half, and both events would form the evidence base for pipeline value discussions.
January to February 2027
Full-year 2026 results and the dividend decision come into view. This will reveal annual license income, progress on the value-up plan announced in October 2024, and the impact of the August pricing reform on fourth-quarter prescription drug sales.

Overall view

Yuhan's recent results can be summarized as a profit recovery driven by lazertinib license income layered on top of the core business.

On an annual basis revenue grew from 1.7758 trillion won in 2022 to 2.1866 trillion won in 2025 and the operating margin improved from 2.0% to 4.8%, though it remains in the low single digits.

In 2026 the quarterly swing was pronounced, from 8.8 billion won of operating profit in the first quarter to 66.9 billion won in the second, which media and brokers commonly attribute to the one-off timing of European milestone recognition.

Supportive arguments include the rapidly growing combination-therapy sales at Johnson & Johnson that widen the recurring royalty base, simultaneous growth in API exports and the core prescription business, and a light debt load with a 36.3% debt-to-equity ratio.

Cautionary arguments include six years without a new out-licensing deal, observations that first-half royalties trail the annual target, and the view that the August pricing reform may pressure the prescription drug segment.

The next items to verify are therefore underlying profitability in a third quarter without milestones, whether the recigersept out-licensing deal is signed, and the MARIPOSA overall survival data. This report is for information purposes only and contains no buy or sell opinion or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.