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Atrial fibrillation asset newly reflected in pipeline value

Maintain Buy and raise TP to W155,000 (from W110,000)

Our target price for Chong Kun Dang is based on the sum of operating value (revised up to W1.7tr) and pipeline value (W210.7bn; newly reflected). In estimating operating value, we slightly raised our 12-month forward EBITDA estimate and applied an EV/EBITDA of 13.5x (vs. 11.2x previously), in line with the average multiple of top domestic pharma peers excluding Yuhan. Pipeline value reflects CKD-510 (PKN605), which the company licensed to Novartis in Nov. 2023. In Oct. 2025, Novartis initiated a phase 2 trial evaluating the drug for atrial fibrillation (AF). In its 4Q25 pipeline update, Novartis officially listed the drug as a phase 2 asset within its cardiovascular, renal, and metabolic (CRM) therapeutic area. Based on our assumptions in <Table 5>, we estimate the rNPV of CKD-510 at W210.7bn.

CKD-510: Pipeline value to come into focus as clinical development progresses

AF is the most common form of arrhythmia. Current pharmacological treatments are divided into direct oral anticoagulants (DOACs) for stroke prevention and anti-arrhythmic drugs (AADs) for rhythm control. Most existing AADs are ion channel blockers, which share a fundamental limitation: the risk of proarrhythmia, where the drug itself may induce arrhythmias. CKD-510 is a first-in-class rhythm control therapy with a novel mechanism of selective HDAC6 inhibition. Rather than directly inhibiting ion channels, it restores action potential duration (APD90) by stabilizing microtubules and normalizing calcium signaling. In studies of atrial tissue from AF patients, CKD-510 demonstrated superior APD90 recovery vs. dronedarone. For AF, Novartis appears to be simultaneously pursuing both anticoagulation (abelacimab; phase 3) and rhythm control (CKD-510; phase 2). Final phase 2 results for CKD-510 are expected in 2027?28, though interim updates are possible.

2026 outlook

For 2026, we expect Chong Kun Dang to post revenue of W1.9tr (+13% YoY) and operating profit of W85.8bn (+7% YoY). Contributions from newly in-licensed products, including Wegovy (W87bn) and Fexuclue (W86.4bn), are likely to drive top-line growth. That said, we forecast OP margin to narrow slightly to 4.5% (-0.3%p YoY), hurt by: 1) lower sales of major existing products (-10% YoY for Prolia) following patent expiry; and 2) a higher mix of in-licensed products (which have higher COGS ratios).