[NA Eun-kyung, Edaily Reporter] Hair-loss treatments are emerging as a new investment theme in global stock markets following the obesity drug boom. In South Korea, expectations for expanded national health insurance coverage have sent related stocks sharply higher, although the investment case varies widely from companies already selling treatments to firms still in early-stage research.

Meanwhile, Peptron extended its sharp decline for a second consecutive session as the end of its technology evaluation period with Eli Lilly and Co. approaches, despite no disclosure of any material negative developments.

Insurance Hopes Fuel Hair-Loss Stocks

In South Korea, discussions about expanding national health insurance coverage for hair-loss treatments have fueled investor interest. The government announced in June that it would pursue broader coverage, particularly for younger people. However, it later canceled a public debate scheduled for July 4 amid controversy over national health insurance spending priorities.

The Ministry of Health and Welfare has also indicated that the issue requires a long-term review, leaving the prospects for implementation this year uncertain.

Despite the policy uncertainty, JW Shinyak and Hyundai Pharm jumped 30.0% and 29.9%, respectively, hitting their daily upper limits on Tuesday, according to KG Zeroin’s MP Doctor, formerly MarketPoint.

Both companies already sell hair-loss treatments, meaning they could see a relatively quick boost to revenue if insurance coverage is expanded.

JW Shinyak sells oral finasteride and dutasteride products as well as topical minoxidil. Hyundai Pharm markets Minoxyl, a topical minoxidil treatment.

JW Shinyak could have a relative advantage if coverage focuses on prescription drugs such as finasteride and dutasteride while excluding over-the-counter topical minoxidil.

Expanded coverage, however, would not necessarily boost profitability. Prescription volumes could increase, but margins may fall if reimbursement prices are set below current non-reimbursed prices.

Withus, Bioneer, and Samick Present Different Investment Opportunities

Withus Pharmaceutical, Bioneer, and Samick Pharmaceutical represent different investment cases in the hair-loss sector because their businesses range from drug manufacturing to cosmetics and early-stage research.

Withus Pharmaceutical rose 5.9%. The company manufactures long-acting injectable formulations, including IVL3001—a finasteride-based candidate being developed by Inventage Lab and Daewoong Pharmaceutical—and CKD-843, Chong Kun Dang Pharmaceutical’s Phase 3 dutasteride injectable.

While development and regulatory risks remain, Withus is the closest of the three to potential pharmaceutical commercialization.

Bioneer surged 25.1%. It sells CosmeRNA, an siRNA-based hair-loss treatment, in overseas markets. However, CosmeRNA is not directly covered by South Korea’s national health insurance system, meaning overseas sales and follow-up products are likely to be more important than reimbursement policy.

Samick Pharmaceutical soared 26.7%, but its hair-loss program is much further from commercialization. The company is researching SLIM2401, a long-acting injectable formulation of baricitinib designed for once-monthly administration.

“This is not at a stage where short-term research results would immediately lead to commercialization. It is a mid- to long-term R&D project,” said a Samick Pharmaceutical official.

Samick went public last October through a SPAC merger at a merger price of 7,480 won per share, which remains above Tuesday’s closing price of 6,830 won despite the day’s rally.

Peptron Slides as Lilly Evaluation Deadline Nears

Peptron fell 9.66% on Tuesday to 165,500 won after dropping 4.78% on Monday, bringing its two-day decline to about 14%.

No negative news was reported, but institutional and foreign investors sold a net 58,776 shares and 12,423 shares, respectively.

Short-selling volume jumped 46.2% to 75,282 shares on Tuesday from 51,483 shares the previous day. Short sales totaled about 12.79 billion won, accounting for 21.1% of combined trading volume on the Korea Exchange and Nextrade.

While it is difficult to attribute the decline solely to short selling, the rise in short-selling volume over two consecutive sessions may have added downward pressure. Tuesday’s net short position data have not yet been released.

Market observers said investor anxiety may also stem from the approaching expiration of Peptron’s platform technology evaluation agreement with Lilly.

Peptron signed an evaluation agreement with Lilly on October 7, 2024, for SmartDepot, its long-acting drug delivery platform. The evaluation period was initially set at approximately 14 months but was extended to a maximum of 24 months in a revised disclosure last December.

Under the current disclosure, the maximum period runs through Oct. 7, heightening investor interest in whether the evaluation will lead to a license-out agreement.

However, this date does not necessarily mean that a decision regarding the licensing-out will be announced then. The evaluation schedule could also be revised again depending on discussions between Peptron and Lilly.