[Yuhan] Proof needed for Lazertinib numbers and subsequent growth narrative

The author is an analyst for NH Investment & Securities. He can be reached at seungyeon.han@nhsec.com -- Ed. Three pre-conditions for sustained rebound: Defensiveness, royalties, and global L/O deals We maintain a Buy rating and TP of W110,000 on Yuhan. The stock has performed sluggish in 2026, recording a -35% YTD return. Yuhan shares rebounded over July and August, as it delivered its strong commitment to support its share price through the cancellation of all treasury shares, alongside the highlighted defensive nature of pharmaceutical stocks. However, since then, the stock has declined amid dwindling investor interest in pharmaceutical shares.  The pre-conditions for Yuha’s sustained recovery should be: 1) renewed investor interest in the pharmaceutical sector as defensive stocks; 2) Lazcluze royalty income (driven by MARIPOSA OS data and potential milestone recognition in 2027); and 3) successful Lazcluze story including a global L/O deal for Lesigercept allergy indications. At the September WCLC, Yuhan updated achievements from Lazcluze clinical trials. First, PALOMA-2 (Phase II SC Rybrevant combo) demonstrated an ORR of 90%, mPFS of 26.1 months, and a 3-year OS rate of 70%, representing an improvement versus MARIPOSA (3-year OS of 60%). Second, COPERNICUS (SC Rybrevant combo with prophylactic adverse event management) demonstrated a superior safety profile versus MARIPOSA, supporting broader real-world adoption (rash 25% vs. 55%, VTE 3% vs. 23%). At ESMO (Oct 23-27), JNJ is scheduled to deliver an oral presentation of COCCCON (Phase II SC combo study focused on reducing skin toxicity). However, the key catalyst remains the final mOS result from MARIPOSA, expected in 2027. 3Q26 preview: Lazcluze royalties to be in line with expectations Yuhan is expected to book 3Q26 consolidated sales of W618.3bn (+8% y-y) and OP of W35.7bn (OPM 5.8%), with earnings exceeding consensus on robust growth at the high-margin overseas operations (sales of W137.0bn, +2% y-y) and the pharmaceutical segment (sales of W379.7bn, +6% y-y). We maintain quarterly Lazcluze royalty forecast of W10.6bn (1Q: W5.4bn, 2Q: W7.0bn) for 3Q26. Based on Bloomberg monthly prescription data, meaningful acceleration in prescription has yet to be observed. Additional details on global MARIPOSA sales are expected to be disclosed during JNJ's earnings announcement scheduled for Oct 13.