[E-Daily Reporter KIM JI-WAN ] SK BIOPHARMACEUTICALS(326030)is attributing significance beyond that of a mere follow-up pipeline to Opakalim (BHV-7000), a new epilepsy drug candidate it acquired from the U.S.-based Biohaven. It is projected that this could serve as a turning point for expanding its U.S. business—which had previously been focused on Xcopri—into an “epilepsy franchise” in the long term.

In a report released on the 27th of last month, Meritz Securities maintained its “Buy” rating on SK BIOPHARMACEUTICALS while raising its target price to 160,000 won. Compared to the closing price of 91,600 won on the 26th of last month, this represents an upside potential of 74.7%. The key factor behind the target price increase is the company’s new valuation of Opakalim’s new drug value at 984.7 billion won.

SK BIOPHARMACEUTICALS secured worldwide exclusive development and commercialization rights from Biohaven not only for Opakalim but also for follow-on Kv7 compounds and the Kv7 discovery platform. The total contract value is $795 million, of which the upfront payment alone amounts to $400 million. The upfront payment accounts for 50.3% of the total, which is relatively high even among late-stage CNS (central nervous system) new drug deals.

Meritz Securities focused not so much on Opakalim itself as on SK BIOPHARMACEUTICALS’ business structure for leveraging it.

Kim Jun-young, an analyst at Meritz Securities, assessed, “The core of this deal lies not merely in adding to the pipeline, but in expanding the U.S. business structure—which is currently focused on Xcopri—into an epilepsy franchise.”

In the second quarter of this year, U.S. sales of Excofry totaled 224.4 billion won, accounting for 90.7% of the company’s total revenue. As things stand, Excofry is effectively the sole driver of the company’s U.S. business. If Opakalim is commercialized, SK Biopharm will be able to leverage the existing Excofry sales organization and the prescription network of epilepsy specialists.

Meritz Securities assessed this not merely as a strategy to prepare for the expiration of Excofry’s patent after 2032, but rather as a structure that extends Excofry’s cash-generating period while adding a second new drug sold directly in the U.S. after 2029. Analyst Kim noted, “Given the ability to jointly utilize the existing sales and distribution infrastructure for epilepsy, Opakalim’s strategic value for SK BIOPHARMACEUTICALS has room to grow even further.”

However, the real test for Opakalim will be the results of the Phase 3 “RISE3” clinical trial, scheduled for the second half of this year. Opakalim is a treatment that activates the Kv7.2/7.3 channels in neurons to suppress excessive neural excitation. Since the competing drug Azetukalner has already demonstrated efficacy in Phase 3 clinical trials, uncertainty regarding the Kv7 mechanism itself has been significantly reduced. Accordingly, Opakalim’s competitiveness is expected to hinge not simply on how much it can enhance seizure suppression, but on how effectively it can reduce CNS side effects—such as dizziness and fatigue—while maintaining efficacy comparable to that of competing drugs.

Researcher Kim stated, “The key to Opakalim lies in how much it can reduce CNS side effects while maintaining a seizure-suppressing effect comparable to that of Azetukalner,” adding, “Ultimately, the balance between efficacy and tolerability is crucial.”

In fact, in the 25 mg azetucalner treatment group, 31.5% of patients experienced dizziness, 9.7% had gait disturbances, 10.5% experienced confusion, and 14.5% discontinued treatment due to side effects. In contrast, in the 75 mg Opakalim open-label extension (OLE) study, dizziness was reported in 5.0%, fatigue in 4.1%, and falls in 4.6%. However, since the Opakalim data comes from an OLE rather than a randomized controlled trial (RCT), direct superiority cannot be conclusively determined at this stage. Ultimately, the key will be whether RISE3 can simultaneously demonstrate efficacy comparable to that of the comparator drug and better tolerability. Meritz Securities viewed the so-called “therapeutic index” as the key factor that will determine Opakalim’s commercial competitiveness.

Some market observers question why Biohaven sold Opakalim just a few months before the Phase 3 clinical trial results were due. If the company had been confident in the trial’s success, it could have sold the asset at a higher valuation after the results were announced.

However, Meritz Securities determined that this does not necessarily need to be interpreted as a negative clinical signal. Biohaven spent $635 million on R&D last year, and its cash outflow from operating activities reached $609 million. The company also faced significant financial pressure in the first half of this year, with $235 million in cash outflow from operating activities.

Analyst Kim interpreted the background of Biohaven’s deal as a strategic choice to secure milestone payments and long-term royalties while transferring the risks of clinical success or failure and the burden of commercialization investments to SK BIOPHARMACEUTICALS. In fact, Biohaven has secured a total of $400 million in cash and retains the right to development and approval milestones of up to $150 million, as well as royalties based on future sales.

Ultimately, RISE3 is expected to determine the value of SK BIOPHARMACEUTICALS’s $400 million bet. Meritz Securities currently values Opakalim’s U.S. new drug value at 984.7 billion won, based on a 46% probability of clinical success.

Analyst Kim stated, “The key variable affecting future value is RISE3,” and analyzed that if efficacy comparable to that of Azetucalner and differentiated CNS tolerability are confirmed, both the probability of clinical success and market share could be projected higher. Conversely, if RISE3 fails to demonstrate clear differentiation in tolerability, the burden of the high upfront payment—amounting to $400 million—may once again come into focus.