* Stock at record high, may have run its course? * Government supply deal to boost 2009, 2010 earnings * But does Korea have enough chicken eggs? (For other Reuters BUY OR SELL items, click [BUYSELL/]) By Shin Jieun and Marie-France Han SEOUL, Aug 20 (Reuters) - Green Cross <006280.KS> is the only leading South Korean drugs firm able to mass produce the H1N1 flu vaccine, and its shares have almost doubled since late-April -- but is there even more upside? The stock hit a record high on Thursday -- valuing Green Cross at just over $1 billion -- in a week when two people died from H1N1 in Korea and neighbouring Japan confirmed its third H1N1 death. About 2.5 million shares were traded in the last three sessions, against a pre-H1N1 daily average of around 30,000. The South Korean government has set aside 193 billion won ($155 million) to secure H1N1 vaccines for 13 million people, or 27 percent of the population [ID:nSEO293894]. The United States has earmarked more than $1 billion and France almost 1 billion euros for vaccination against H1N1. ONE-HORSE RACE Analysts reckon talks with South Korean authorities will guarantee Green Cross to deliver 50 percent of the vaccine supply. "Green Cross was doing well in the vaccine business even before the government supply talks started getting investors' attention," said Bae Ki-dal, an analyst at Goodmorning Shinhan Securities. Bae expects the deal to price the vaccine at 8,000 won ($6.43) per dose. The contract will not only boost revenue, Bae said, but also help Green Cross become a major vaccine maker and increase its exports. "For a while, there was a feeling Korea had been relatively spared from the pandemic," said Lee Jung-in, an analyst at Korea Investment & Securities. "But given the speed at which it has spread over the summer, one can anticipate things will get worse when the weather gets colder," she said, noting schools reopen over the next two weeks. Lee set Green Cross's target price at 165,000 won, assuming a 7,000 won per dose price for the vaccine. WHERE'S THE EGGS? Yet Green Cross shares may have peaked. Its production capacity this year could be much lower than the 10 million doses predicted, due to difficulties in finding enough chicken eggs suitable to make its vaccine. Also, the procedure used for H1N1 has a lower yield than for more traditional vaccines. "The maximum number of chicken eggs available in the country is 12-13 million," said KTB Securities analyst Lee Hye-rin. With the World Health Organisation (WHO) saying the H1N1 vaccine's yield is about 25-50 percent of normal flu vaccines, Lee cautions that Green Cross may only be able to deliver 5-6 million doses. "If the yield doesn't improve, costs will go up," she said. Also, talks with the government over pricing and legal responsibility for the vaccine could complicate a deal. The WHO has said there could be safety issues during a pandemic when a vaccine is administered on a mass scale, even if these don't show up in safety trials. [ID:nL682054] "The shares are overvalued because the vaccine deal is already priced in," said Oh Seung-kyu, analyst at Tong Yang Securities. "There remains the possibility that the government seeks an extra budget for the vaccinations, but it's just too early to tell." ($1=1244.5 Won) (Editing by Jonathan Thatcher and Ian Geoghegan)
Anti-North Korea protesters scuffle with each other over controversy during a rally denouncing North Korea in Seoul August 19, 2009. North Korea said on Wednesday leader Kim Jong-il had sent condolences ...
