Hanmi Pharmaceutical Group's holding company Hanmi Science is establishing a professional management system with CEO Kim Jae-kyo and Vice President and Chief Financial Officer (CFO) Shim Byeong-hwa reorganizing the internal organization, while the first performance report for the first quarter of this year has been released. Sales have increased, but revenue has decreased, indicating a slowdown in growth compared to the previous year. Attention is focused on how Kim Jae-kyo's Hanmi Pharmaceutical Group will regain its growth momentum and maintain its reputation as a leading developer of new drugs.
On the 25th, Hanmi Science announced that its consolidated first-quarter sales for this year increased by 3.8% year-on-year to 332.16 billion won, while operating profit decreased by 27.4% to 27.08 billion won during the same period.
Hanmi Pharmaceutical Group has a structure with subsidiaries under its holding company Hanmi Science, including Hanmi Pharmaceutical, Beijing Hanmi Pharmaceutical, Hanmi Precision Chemical, Online Farm, and JVM. The first-quarter performance of the core subsidiary, Hanmi Pharmaceutical, is scheduled to be disclosed on the 29th.
The market expects tangible research and development (R&D) results, stock price buoyancy, and ripple effects on subsidiaries along with the establishment of a professional management system for the holding company. However, many predict that it will be difficult to stabilize the organization and normalize management in the short term. There are also concerns that hastily changing R&D and sales methods could instead weaken competitiveness.
New CEO Kim Jae-kyo is known as an expert in the pharmaceutical and bio investment field, having served as vice president of MERITZ Securities after working at Yuhan Corporation. He was promoted to the youngest executive after leading the technical export of the lung cancer drug Lecopera while at Yuhan Corporation. Vice President Shim Byeong-hwa has held various positions at Samsung Biologics, including head of the finance team, head of the management innovation team, and head of the social contribution task force.
To establish a professional management system, Kim Jae-kyo's Hanmi Science focused on separating ownership from management, reorganizing and appointing personnel accordingly. This effectively means the founding family has stepped back from detailed management, including personnel appointments. Kim established a new planning strategy department to restore the collaboration system that had been disconnected between Hanmi Science and Hanmi Pharmaceutical last year. The planning strategy department is composed of a management strategy team and a business strategy team.
In the process of the management rights dispute, the late founder Lim Seong-ki's wife, Song Yeong-sook, chairman of Hanmi Pharmaceutical Group, and largest shareholder Shin Dong-guk of Hanyang Precision emphasized the establishment of a progressive governance system similar to that of Merck in Germany. Merck is the world's oldest pharmaceutical company, with a history of 357 years.
Merck has a structure whereby family members and external experts select members of the partner committee, which in turn appoints the senior executives of Merck. Hanmi Pharmaceutical Group also aims to appoint professional managers selected by the founding family and major shareholders. In fact, it was reported that a personnel appointment was communicated to the founding family only after CEO Kim Jae-kyo took office.
Changes in management style are also expected. In the industry, many believe that Kim Jae-kyo, the first professional manager of the holding company, will adopt a more stability-oriented approach compared to the aggressive management style of the late Lim Seong-ki. There are also forecasts that, from this perspective, it may adopt an open innovation R&D approach like Yuhan Corporation, where external technologies are acquired rather than relying solely on in-house development.
An industry official noted, "Hanmi Pharmaceutical has pursued candidate substance discovery internally, but it can now follow the Yuhan Corporation model of acquiring candidate substances externally for development and then exporting the technology again," adding that "this significantly differs from the traditional R&D approach led by Hanmi's founder, and there is a risk that it could reignite management disputes."
CEO Kim Jae-kyo was a key figure in open innovation at Yuhan Corporation. In 2015, Yuhan Corporation introduced a candidate substance that later became the lung cancer drug Lecopera from the domestic bio company Oscotec and transferred the technology to Janssen for 1.6 trillion won three years later in 2018.
On the other hand, Hanmi Pharmaceutical holds a number of pipelines that have been developed in-house from candidate substances. A representative example is epeglenatide, which is currently under development as an obesity treatment. The domestic phase 3 trial results for epeglenatide are expected to be announced for the first time in September to October this year, just before commercialization.
A market official stated, "I believe there is currently no manager as aggressively committed to R&D as the late Lim Seong-ki," adding, "As Hanmi's R&D strategy differs significantly from that of Yuhan Corporation, hastily changing direction could weaken the new drug competitiveness that has been built with difficulty."
Hanmi Pharmaceutical Group faces several challenges. While the core subsidiary Hanmi Pharmaceutical is expected to grow as it builds a stable pharmaceutical portfolio, it also has challenges such as technology exports and the success of new drug development. Beijing Hanmi and Hanmi Precision Chemical, which is responsible for the production of raw drugs for Hanmi Pharmaceutical, showed a slowdown in growth in their performance last year.
Jung Yu-kyung, a research fellow at Shinyoung Securities, stated, "While Hanmi Pharmaceutical's steady growth is expected, a full-fledged recovery of the subsidiaries Beijing Hanmi and Hanmi Precision Chemical is necessary," adding, "It is unlikely that organizational stabilization and the ensuing normalization of management will occur in the short term."