068270 KS

Celltrion Inc

Healthcare


Presented:05/06/2020
Price:₩207,000.00
Cap:$25.12B
Current Price:₩200,500.00
Cap:$37.61B

Presented

Date05/06/2020
Price₩207,000.00
Market Cap$25.12B
Ent Value$22.05B
P/E Ratio92.84x
Book Value₩20,919.56
Div Yield0%
Shares O/S133.52M
Ave Daily Vol1,695,066
Short IntN/A

Current

Price₩200,500.00
Market Cap$37.61B
Celltrion, Inc. engages in the development, manufacture and distribution of pharmaceuticals. It operates through the Biopharmaceuticals, Chemical Drugs and Others businesses. Its products include remsima and biosimilars. The company was founded on February 27, 1991 and is headquartered in Incheon, South Korea.

Publicly traded companies mentioned herein: Amgen Inc (AMGN), Celltrion Healthcare Co Ltd (091990 KS), Celltrion Inc (068270 KS), Mylan NV (MYL), Pfizer Inc (PFE), Roche Holding AG (ROG SW), Samsung Biologics Co Ltd (207940 KS), Samsung C&T Corp (028260 KS), Teva Pharmaceutical Industries Ltd (TEVA)

Highlights

The presenter is short shares of Celltrion Inc (068270 KS), a South Korean company that produces and sells biosimilar products. Celltrion Inc (“CI”) has three commercialized products: Remsima (Remicade biosimilar), Truxima (Rituxan biosimilar), and Herzuma (Herceptin biosimilar). It sells products to Celltrion Healthcare (“CH”), which then sells to partners including TEVA and PFE, among others. CI’s stock price is ₩203,500 per share and trades at 18x EV/Sales and 47x EV/EBIT on 2020 consensus figures. This is a major valuation premium above generic peers (e.g., TEVA, PFE, MYL) trading at 2x – 5x EV/Sales and 6x – 14x EV/EBIT, especially considering the downside risks to the business such as demand concerns, increased competition, declining margins, and its history of regulatory issues. As this story plays out, the presenter sees ~50% downside to share prices on a series of earnings misses, which could include Q1’20 earnings that will be reported on May 8th (please note, the company reported lower than expected Q1’20 margins and earnings).

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Idea Discussion

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