Bio Solution will be able to drive up its market capitalization once it obtains sales approval for osteoarthritis cell therapy CartiLife, an analyst said.

The biotech company had initially aimed to win the nod for CartiLife within this year, but the Ministry of Food and Drug Safety demanded more data including documents on quality control.

Despite the delay of approval to next year, the cell therapy is still promising, the analyst said.

Oh Tae-wan, an analyst at Korea Investment & Securities, said in a report on Thursday that Bio Solution’s value would increase after the release of CartiLife in Korea, along with anticipations for global clinical trials.

Oh said Bio Solution was relatively undervalued, compared to its peers on KOSDAQ.

Bio Solution’s market cap is around 307 billion won ($269.5 million). That of Kolon TissueGene, which has osteoarthritis treatment Invossa, stands at 2.43 trillion won. The market cap of Medipost, selling Cartistem, is 654.7 billion won.

“Bio Solution is still waiting for sales approval for CartiLife. Its value is underrated because it hasn’t started global trials yet,” Oh said. “Its value will be reassessed next year after winning approval in the first half, building an additional GMP (Good Manufacturing Practice) facility through fundraising, and beginning of global trials.”

Bio Solution sells Keraheal, a cell therapy that has a 70 percent share in the severe burn treatment market.

The sales growth of Keraheal-Alo, a treatment for second-degree burn rolled out last year, will also help boost Bio Solution’s value, Oh said.

With the government’s easing of criteria for insurance coverage, both Keraheal and Keraheal-Alo are likely to achieve steady sales growth, he said.

“Burns that need a hospital treatment often occur at industrial sites. Although we can’t expect explosive growth in the number of burn patients in our modern industries, the government expanded insurance coverage for industrial accident compensation from 60 percent of the burned area to 40 percent,” Oh said. “So, the company will be able to raise revenue from its cell therapies.”

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