Attached File Samsung Securities_20170323.pdf

– Handok’s recent acquisitions of Genexine, Teva-Handok, Pacific Pharmaceuticals,
NB Postech, and Theravalues have bolstered its capabilities in biologics, generics,
OTC drugs, rapid diagnostic kits, and health supplements.

– In-licensed prescription drugs are driving Handok’s growth, while its in-housedeveloped
OTC drugs and health supplements should lift profitability. Expectations
have risen for the firm’s cash cow Ketotop after it hiked the pain relief patch’s ASP
by 10% this month and since related capacity expansions are underway.

– Results are expected soon in Europe for the phase II adult clinical trials on
Genexine’s long-acting human growth hormone as well as interim results for its
phase II pediatric clinical trials.

– Handok is Korea’s 13th-largest pharmaceuticals player in terms of sales, and
appears undervalued given its investment holdings, with the firm believed to have
turned around last year, while its Teva-Handok JV is expected to do so in 2018.