[E-Daily Reporter NA EUN-KYUNG ] Following obesity treatments, hair loss treatments are emerging as a new investment opportunity in global stock markets. In South Korea as well, related stocks have surged on expectations that hair loss treatments will be covered by national health insurance; however, the rationale for potential gains varies widely, ranging from companies already selling products to those still in the early stages of research.

Meanwhile, Peptron, Inc.—whose technology evaluation with Eli Lilly is nearing its conclusion—plummeted for two consecutive days without any specific negative announcements.

Wall Street’s Next Gold Mine Is

Hair Loss Drugs

… Domestic Insurance Coverage Is ‘On Hold’

In an article published on the 29th of last month (local time), Bloomberg stated, “Forget glucagon-like peptide-1 (GLP-1) stocks. Hair loss treatments are Wall Street’s next gold mine.” The report highlighted that while the U.S. population suffering from hereditary hair loss totals approximately 50 million Namsung and 30 million women, no new treatments have been approved since the late 1990s.

The candidate closest to commercialization is Cosmo’s topical treatment for male pattern baldness, “Classcoteron.” Cosmo plans to submit a New Drug Application to the U.S. Food and Drug Administration (FDA) in the first quarter of 2027. Global investment bank Jefferies estimated global sales of up to $3 billion (approximately 4.1 trillion won), assuming the company secures a sales partner. The stock price of Veradermics (ticker: MANE), which is developing an oral minoxidil, has risen by about 500% since its initial public offering (IPO) last February, and the stock price of AppSai (ABSI), which is developing the AI-based injectable drug ABS-201, has also more than doubled this year.

In South Korea as well, related stocks garnered attention earlier this year due to discussions about expanding health insurance coverage for hair loss treatments; however, as those discussions have since stalled, the policy impact on this recent stock price surge appears to be limited. Although the government announced in June that it would push for expanded coverage, primarily for young adults, it canceled the “Public Forum” scheduled for July 4 amid growing opposition over the prioritization of national health insurance finances. The Ministry of Health and Welfare has also stated that long-term review is necessary, making the likelihood of institutionalizing the policy within the year uncertain.

JW SHINYAK CORPORATION and Hyundai pharm… There Was a Reason for the Price Limit Up

Even as policy discussions show little progress, hair loss-related stocks continue their upward trend day after day. According to KG Zeroin MP DOCTOR (formerly Marketpoint) on the 1st, JW SHINYAK CORPORATION(067290)and Hyundai pharm(004310)rose 30.0% and 29.9%, respectively, hitting their daily price limits. It is believed that the stock prices were driven up by the expectation that both companies—which sell hair loss treatments—could see relatively rapid revenue growth if the expansion of insurance coverage becomes a reality.

JW SHINYAK CORPORATION sells oral finasteride and dutasteride, as well as topical minoxidil. Hyundai pharm also markets the topical minoxidil product “Minoxil.” If the policy is designed to focus on prescription drugs such as finasteride and dutasteride while excluding over-the-counter topical minoxidil, JW SHINYAK CORPORATION could be at a relative advantage.

However, inclusion in the insurance coverage list does not necessarily lead to improved profitability. While prescription volumes may increase, profits per product could decline if the insurance-reimbursed price is set lower than the existing non-covered price.

Different Timelines for Hair Loss Drugs… A Comparison of Withus Pharmaceutical. Co., LTD., BIONEER CORPORATION, and SAMIK PHARM. Co., LTD.

Withus Pharmaceutical. Co., LTD(330350)·BIONEER CORPORATION(064550)·#SAMIK PHARM. Co., LTD. differs in nature from JW SHINYAK CORPORATION and Hyundai pharm, whose products are prescribed domestically. Their commercialization stages—including candidate compound production, sales of hair loss-relieving cosmetics, and early-stage formulation research—and potential to benefit from policy changes also vary.

Withus Pharmaceutical. Co., LTD, which rose 5.9% on the 1st, is responsible for producing long-acting injectables. It handles the production of “IVL3001,” a finasteride-based drug being developed by Inventage Lab Inc. and DAEWOONGPHARMACEUTICAL, as well as “CKD-843,” a dutasteride injectable currently in Phase 3 clinical trials by CHONGKUNDANG. Although there are risks of development failure and approval delays, these companies are the closest to commercializing their drugs among the three.

BIONEER CORPORATION, up 25.1%, is selling “Cosmerna,” a short-interfering RNA (siRNA)-based hair loss treatment, overseas. However, since Cosmerna is not directly covered by national health insurance, factors such as the expansion of overseas sales and the performance of follow-up products—rather than policy benefits—will be the key determinants of its stock price.

SAMIK PHARM. Co., LTD., up 26.7%, is the stock among the three that will take the longest for expectations regarding its hair loss product to translate into actual results. This is because the company is researching SLIM2401, a long-acting, once-monthly injectable formulation of baricitinib, but the project is still in its early stages. SAMIK PHARM. Co., LTD. also drew a clear line, stating, “This is not a project that will lead to immediate commercialization based on short-term research results; it is a medium- to long-term R&D initiative,” and added, “We do not have any drugs scheduled for imminent launch.”

SAMIK PHARM. Co., LTD. went public last October through a merger with Hana Financial SPAC No. 28. The merger price was 7,480 won, which remains higher than the closing price of 6,830 won on the 1st—a 26.7% surge.

Lilly Evaluation in Final Stages… Peptron, Inc. Sees Second Consecutive Day of Increased Short Selling

Peptron, Inc.(087010)Following a 4.78% decline on the 31st of last month, the stock closed at 165,500 won on the 1st, down 9.66%. The cumulative decline over the two days was approximately 14.0%. Although no specific negative news was announced, institutional and foreign investors net sold 58,776 shares and 12,423 shares, respectively.

Short selling volume also increased by 46.2%, rising from 51,483 shares on the 31st of last month to 75,282 shares on the 1st. The value of short selling transactions on the 1st totaled approximately 12.79203 billion won, accounting for 21.1% of the combined trading volume on the KRX and NexTrade (NXT).

While it is difficult to definitively attribute the stock price decline to short selling, the fact that trading volume increased for two consecutive days and the proportion exceeded 20% suggests it may have contributed to downward pressure. However, since the net short position as of the 1st has not yet been disclosed, it remains unclear whether the actual short position has increased.

The market views the approaching end of the maximum contract term for the ongoing platform technology evaluation with Lilly as a source of anxiety that has weighed on investor sentiment. On October 7, 2024, Peptron, Inc. signed an agreement with Lilly to evaluate “SmartDepo,” a long-acting drug delivery platform. The contract term was originally set at approximately 14 months but was amended to a maximum of 24 months via a corrective disclosure last December.

According to the current disclosure, the maximum term runs through October 7 of this year. This has heightened concerns over whether the evaluation results will lead to a subsequent technology transfer. However, an announcement regarding the technology transfer is not guaranteed on that date, and there is a possibility that the evaluation schedule could be revised again based on discussions between the two parties.