Onconic Therapeutics Develops Follow-On New Drugs Based on Jacubo Profits...Company Value Revaluation in Focus

ARIS Highlights Reinvestment Structure of Jacubo Profits into Next-Generation Drug Development

47.3 Billion Won in Sales and 7.4 Billion Won in Operating Profit in First Half

Jacubo Secures Approval in India, Nesuparib Advances to Phase 2 Cl

The business structure of Onconic Therapeutics, which generates revenue and profit through its self-developed new drug Jacubo and reinvests in the development of subsequent new drugs, has been cited as a factor for a potential revaluation of the company's value.

Independent research firm ARIS, in its corporate analysis report on Onconic Therapeutics published on August 20, highlighted Jacubo's commercial performance in Korea, its product approval in India, and the clinical value of its next-generation anticancer drug, Nesuparib. In particular, ARIS evaluated the structure of reinvesting profits generated from self-developed new drugs into subsequent pipelines as a key competitive advantage.

Product image of Jakubo, a proprietary drug developed by Onconic Therapeutics. Onconic Therapeutics

ARIS pointed out that, in the recent Korean stock market environment where capital flows are concentrated into certain industries and stocks, the share prices of most KOSDAQ-listed biotech companies have been sluggish. The firm analyzed that Onconic Therapeutics is also undervalued relative to its fundamentals, noting that Jacubo's performance, global business expansion, and the development value of Nesuparib are not fully reflected in the current share price.

ARIS also emphasized not only the size of the company's pipeline, but also its financial structure, which can support the development of subsequent new drugs. Since biotech firms in the clinical stage continually spend on research and development, factors such as available cash, the cash burn rate, and the need for additional fundraising all significantly impact company valuation. ARIS evaluated Onconic Therapeutics' structure—which generates revenue and profit through Jacubo and reinvests these proceeds into the development of follow-on drugs such as Nesuparib—as a virtuous cycle, described as 'new drug development → approval and commercialization → cash generation → follow-on new drug R&D.'

In the first half of this year, Onconic Therapeutics recorded sales of 47.3 billion won and operating profit of 7.4 billion won. As of the end of June, the company held 58.1 billion won in cash and cash equivalents. Of the sales in the first half, 93.8% was generated from Jacubo product sales, while 6.2% came from technology transfer revenue. ARIS also cited as a positive factor the company's strategy of building its sales base around product sales rather than relying on one-off milestone payments for technology transfer.

The overseas expansion of Jacubo was also identified as a key variable for the future. Earlier this month, Jacubo received product approval in India as a treatment for erosive gastroesophageal reflux disease. This was the company's first approval from a foreign regulator. The local partner company is currently proceeding with commercialization procedures for launch.

The clinical development of next-generation anticancer drug Nesuparib was also highlighted as a factor that could further enhance the company's value. Nesuparib is an anticancer drug candidate that simultaneously inhibits the proteins PARP and tankyrase. It is currently in phase 2 clinical trials for four indications: pancreatic cancer, ovarian cancer, endometrial cancer, and gastric cancer. Previously, the drug candidate received Orphan Drug Designation from the U.S. Food and Drug Administration (FDA) for pancreatic cancer, gastric cancer, gastroesophageal junction cancer, and small cell lung cancer.

ARIS judged that, at present, the value of Jacubo is primarily reflected in the company's valuation. ARIS analyzed that if Nesuparib's clinical results are further substantiated in the future, the value of these follow-on drugs could also be reflected, leading to a revaluation of the company.

A representative of Onconic Therapeutics stated, "We are establishing a foundation to generate profits through Jacubo and reinvest them in the development of subsequent new drugs. We will continue to strengthen this virtuous cycle by expanding Jacubo's domestic and overseas commercialization performance, while continuously investing in follow-on new drug pipelines such as Nesuparib."

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