Morning Focus

December 4, 2018 Korea Morning Focus Company News & Analysis Major Indices Close Chg Chg (%) ABL Bio (Not Listed/Not Rated) KOSPI 2,131.93 35.07 1.67 A bispecific antibody developer with proven capabilities KOSPI 200 276.18 4.83 1.78 KOSDAQ 709.46 13.70 1.97 Sector News & Analysis Turnover ('000 shares, Wbn) Volume Value Telecom Service (Overweight) KOSPI 428,909 5,431 5G: An extension of LTE KOSPI 200 86,762 4,050 KOSDAQ 538,785 3,003 Economy & Strategy Update Market Cap (Wbn) BOK Monitor Value Dissipation of event risks KOSPI 1,427,529 KOSDAQ 237,940 KOSPI Turnover (Wbn) Buy Sell Net Foreign 1,789 1,467 323 Institutional 1,231 1,098 133 Retail 2,404 2,858 -454 KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 327 296 31 Institutional 233 147 86 Retail 2,453 2,558 -105 Program Buy / Sell (Wbn) Buy Sell Net KOSPI 1,441 1,222 219 KOSDAQ 225 146 79 Advances & Declines Advances Declines Unchanged KOSPI 648 186 60 KOSDAQ 960 248 66 KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Samsung Electronics 43,250 1,400 500 KODEX KOSDAQ150 13,215 810 319 LEVERAGE KODEX LEVERAGE 12,435 415 251 Hynix 70,500 900 190 SEMCO 125,500 5,000 185 KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value SillaJen 77,600 6,900 232 VESPA 30,000 -3,400 75 Posco Chemtech 66,300 -1,400 73 Celltrion Healthcare 79,800 1,100 68 Daea TI 8,510 30 68 Note: As of December 03, 2018 Mirae Asset Daewoo Research This document is a summary of a report prepared by Mirae Asset Daewoo Co., Ltd. (“Mirae Asset Daewoo”) and published on our website. Please review the compliance notices contained in the original report. Information and opinions contained herein have been compiled in good faith from sources deemed to be reliable. However, the information has not been independently verified. Mirae Asset Daewoo makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy or completeness of the information and opinions contained in this document. Mirae Asset Daewoo accepts no responsibility or liability whatsoever for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. Information and opinions contained herein are subject to change without notice. This document is for informational purposes only. It is not and should not be construed as an offer or solicitation of an offer to purchase or sell any securities or other financial instruments. This document may not be reproduced, further distributed or published in whole or in part for any purpose. ABL Bio (Not Listed/Not Rated) A bispecific antibody developer with proven Biotech capabilities ABL Bio is a bispecific antibody developer with an extensive pipeline Issue Comment Bispecific antibody is a newly emerging market attracting massive investments from big December 4, 2018 pharmas ABL Bio’s key strengths are its extensive pipeline and large number of licensing deals Mirae Asset Daewoo Co., Ltd. A bispecific antibody developer with extensive pipeline [ Biotech/Healthcare] ABL Bio is a bispecific antibody developer set to go public on KOSDAQ on December 19th. Taehee Kim Bispecific antibodies, which bind two different targeted antigens simultaneously, are +822-3774-6813 considered a more effective therapy than monoclonal antibodies. ABL Bio has a number of candidates in its pipeline based on its bispecific antibody platform technologies and focuses [email protected] on treatments for cancer and neurodegenerative diseases. Seunglok Huh +822-3774-1374 The IPO price range has been set at W13,000 to W17,000, implying a market value of [email protected] W588.9bn to W770.2bn (including stock options exercisable within a year). The company plans to raise W78bn to W102bn in the IPO, most of which will be used for R&D and working capital. A newly emerging market attracting massive investments from big pharmas The bispecific antibody market has only recently begun to take off. There are still no drugs generating meaningful sales, but the market is expected to grow to US$5.8bn by 2024, driven by Amgen’s acute lymphoblastic leukemia treatment Blincyto (which targets CD19 of B-cells and CD3 of T cells) and Roche’s hemophilia treatment Hemlibra (which targets coagulation factors IX and X). Global pharmas have also shown strong interest in bispecific antibodies. Bispecific antibodies have attracted around US$110bn from major pharmas in licensing deals this year—the fourth largest investment by candidate type, following small molecules, monoclonal antibodies, and gene therapies. Since 2017, Merck, Amgen, Janssen, and Genentech have licensed bispecific antibody technologies for more than US$1bn each (Table 4). Licensing deals for bispecific antibodies are generally made during the development or preclinical stage (rather than during phase 1 or 2 trials). Looking at the seven bispecific antibody deals made by big pharmas since 2016, three of them were concluded during the development stage, while the remaining four were signed during the preclinical stage. It is also interesting to note that, despite being in the early stages of development, each bispecific antibody candidate has fetched a value of around W300bn on average. FY (Dec.) 2016 2017 2018F 2019F Revenue (Wbn) - 0.1 5.7 9.6 OP (Wbn) -3.5 -9.7 -17.4 -18.9 OP margin (%) - - - - NP (Wbn) -13.7 -74.7 -110.6 -18.9 EPS (W) -712 -3,890 -2,443 -418 ROE (%) - - - - P/E (x) - - - - P/B (x) - - - - Dividend yield (%) - - - - Note: All figures are based on non-consolidated K-IFRS Source: Company data, Mirae Asset Daewoo Research estimates Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT. December 4, 2018 ABL Bio Figure 1. Bispecific antibody diagram Figure 2. Deal values by candidate type (2018 YTD) Source: Company data, Mirae Asset Daewoo Research Source: GlobalData, Mirae Asset Daewoo Research Figure 3. Bispecific antibody market forecasts Figure 4. Hemlibra’s sales forecasts (USD bn) 이중항체 (USD bn) Hemlibra 7 4.0 5.8 6 3.5 5 4.6 3.0 2.5 4 3.6 2.0 3 2.6 1.5 2 1.7 1.1 1.0 1 0.5 0.5 0.1 0.2 0 0.0 2016 2018F 2020F 2022F 2024F 2017 2018F 2019F 2020F 2021F 2022F 2023F 2024F Source: GlobalData, Mirae Asset Daewoo Research Source: GlobalData, Mirae Asset Daewoo Research Key strengths: Extensive pipeline and various licensing deals Key strengths: 1) An extensive pipeline built on platform technologies One of ABL Bio’s biggest strengths is its extensive pipeline built upon its bispecific antibody platform technologies. Within bispecific antibody combinations, the company focuses on T- cell engagement and dual targeting and has strengths in oncology therapies for blood, gastric, ovarian, and colon cancers. The company has developed a bispecific antibody with high penetration of blood-brain barriers (BBB), which is currently in a non-clinical study as a potential treatment for Parkinson’s and Alzheimer’s. The company is also developing an antibody-drug conjugate (ADC) for the treatment of cancer in collaboration with LegoChem Biosciences. Mirae Asset Daewoo Research December 4, 2018 ABL Bio Table 1. ABL Bio’s pipeline Program Indication Stage Notes Antibodies for Gastric/ovarian/colon cancer Phase 1 angiogenesis inhibition /monoclonal antibodies Brain tumor In vivo efficacy & POC Licensed to TRIGR for oncology Brain tumor Antibody search Licensed to TRIGR Gastric/breast/hematologic In vivo efficacy Licensed to TRIGR cancer T cell engager bispecific Hematologic cancer In vivo efficacy Licensed to TRIGR antibodies Breast cancer (triple Antibody search Licensed to TRIGR negative) Hematologic cancer/solid In vivo efficacy Licensed to Dong-A ST tumor Colon/breast/gastric cancer In vivo efficacy Licensed to Yuhan Bispecific antibodies for Solid tumor 1 In vivo efficacy Licensed from I-Mab cancer immunotherapy Solid tumor 2, 3 In vivo efficacy Collaboration with I-Mab Solid tumor 4 Antibody search Collaboration with I-Mab Immuno-oncology Colon/renal/ovarian cancer In vivo efficacy Triple-negative Antibody search breast/ovarian/liver cancer Collaboration with Genome & Solid tumor Antibody discovery Company Bispecific antibodies for neurodegenerative Parkinson’s Nonclinical With BBB-penetration diseases Alzheimer’s Antibody discovery With BBB-penetration Hematologic cancer, solid In vivo efficacy & cell line Collaboration with LegoChem ADC tumor development Biosciences Collaboration with LegoChem Solid tumor Antibody search Biosciences Source: Company data, Mirae Asset Daewoo Research Key strengths: 2) Strong capabilities proven by large number of licensing deals ABL Bio also boasts robust technology, as proven by its large number of licensing deals. The company has signed five licensing agreements this year alone. This includes partnerships with top domestic drugmakers Dong-A ST and Yuhan, and two massive contracts worth US$546mn (July) and US$595mn (November), respectively, with US-based TRIGR Therapeutics. The July deal with TRIGR Therapeutics was for five assets, while the November deal was for ABL001, a bispecific antibody targeting VEGF and DLL4. Table 2. ABL Bio’s licensing deals Date of Counterparty Milestone Amount received Stage contract Under Dong-A ST 1/24/18 development Under TRIGR Therapeutics US$546mn US$4.3mn 7/30/18 development Under Dt&SanoMedics 8/22/18 development Under Yuhan W59bn W0.2bn 9/10/18 development TRIGR Therapeutics US$595mn US$5mn Domestic Phase 1 11/30/18 Source: Company data, Mirae Asset Daewoo Research Mirae Asset Daewoo Research December 4, 2018 ABL Bio Table 3.

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