The total sales of 91 healthcare (pharmaceuticals, biotechnology, medical devices) corporations listed on the domestic securities market in the third quarter of this year amounted to 8.4 trillion won, an increase of 10.8% compared to the same period last year. However, in contrast to the generally growing performance of large corporations, small and medium enterprises (SME) have seen a decline in sales, operating profit, and research and development investments, leading to an analysis that the polarization between large corporations and SMEs is deepening.
The Korea Bio Association noted on the 20th that this analysis was derived from the survey results regarding the trends of listed biohealthcare corporations in the third quarter of 2024. This survey targeted 91 public corporations included in the biohealthcare sector selected from the Korea Exchange (KRX) industrial index.
According to this, the domestic sales of the 91 healthcare corporations in the third quarter were approximately 5.6 trillion won, an increase of 12.6% compared to the same period last year, while exports during the same period reached about 2.7 trillion won, a 7.2% increase. By sector, the sales of pharmaceuticals in the third quarter increased by 9.6% compared to the previous year, totaling about 7.2 trillion won, while medical devices saw an increase of 18.8% during the same period, totaling approximately 1.2 trillion won.
The operating profit margin, a profitability indicator, was 17.4% in the third quarter, roughly a 0.2 percentage point increase from the same period last year. The growth rate of the operating profit margin is smaller than that of sales growth, which is evaluated to be influenced by the slight reduction in operating profits among large and medium-sized pharmaceutical corporations, as well as the shift to operating losses among SMEs.
In the third quarter of this year, the research and development (R&D) investment scale of the 91 corporations was approximately 900 billion won, which is a 9.6% increase from the same period. The total workforce was about 49,000, marking a total increase of 3.6%. In contrast, the R&D workforce of SMEs in the pharmaceutical sector and medium-sized enterprises in the medical device field decreased by 1.2% and 11.4%, respectively, compared to the previous year.
The Bio Association pointed out that there is a significant disparity in R&D investment scales between SMEs and medium-sized and large corporations. The R&D investment scale of SMEs decreased by 8.3% in the pharmaceuticals sector, while the investment scales of medium-sized and large corporations increased by 9.6% and 8.6%, respectively, driving growth.
Kim Eun-hee, head of the Industrial Statistics Team at the Korea Bio Association, said, “The financial condition of listed biohealthcare corporations is stabilizing overall due to the recovery of domestic and international sales.” However, she added that “in the case of SMEs in the pharmaceuticals sector, sales and operating profits are decreasing, and investments in research and development are also being reduced, so they need to find ways to attract investment and improve profitability.”