The domestic pharmaceutical and biotech industry is expected to continue its strong performance in the second quarter of this year. Despite uncertainties such as the U.S. government's drug price reduction policy, delays in U.S. Food and Drug Administration (FDA) reviews, and a slowdown in global demand, the achievements and sales of domestically developed drugs in overseas technology transfers are supporting the results.
According to the industry on the 16th, the major domestic pharmaceutical and biotech corporations are showing growth this year. The industry assessed that the results from years of research and development efforts are starting to be reflected in sales.
Yuhan Corporation is on the verge of surpassing 1 trillion won in semiannual sales for the first time since its establishment. Its operating profit for the second quarter is expected to more than double compared to the same period last year. The key factor is the sales from the lung cancer drug 'LazetriNib' (U.S. brand name Lazurkluz).
With the launch of the combination therapy 'Amivantamab' from Johnson & Johnson (J&J) for lung cancer in Japan, milestone payments and royalties from U.S. sales are expected to be reflected in Yuhan Corporation's second quarter results.
Yuhan Corporation received a commercialization technology fee of $15 million (207 million won) from J&J following the launch of the LazetriNib-Amivantamab combination therapy in Japan last May. As the combination therapy is expected to be sold in the U.S. as well as launched in Europe in the third quarter, additional milestones are anticipated. J&J reported sales of $141 million (195.6 billion won) from this combination therapy in the first quarter.
In addition to LazetriNib, Yuhan Corporation's CDMO subsidiary, Yuhan Chem, is also expected to contribute to the company's performance expansion by entering into a supply contract for the active pharmaceutical ingredient (API) of the HIV prevention injection 'Yes2Go' with Gilead in the U.S. This follows a large order worth 107.7 billion won received last September and a second large contract worth 88.8 billion won.
SK Biopharm is expected to record stable results this quarter based on the growth of its epilepsy treatment 'Sonavex' (U.S. brand name Xcopri). IBK Securities estimates Xcopri's second-quarter sales at approximately 149.7 billion won, marking an increase of 42.3% year-on-year and 12.3% quarter-on-quarter.
The company is set to announce new drug candidates introduced from other corporations in the second half of the year. The new candidates are central nervous system (CNS) treatments, with plans to develop them into the second Sonavex using the sales network established in the U.S. Currently, sales are concentrated on the single item Sonavex, so it is expected to become a new growth driver.
HK inno.N is a corporation benefitting from overseas sales performance of its new drug. Expectations are rising that the overseas sales of the gastroesophageal reflux disease new drug 'K-Cab' will exceed 1 trillion won in annual sales this year. K-Cab is Korea's 30th new drug, having entered a total of 54 countries, including Korea, with launches in 15 of these countries.
The strong performance trend of domestic corporations due to R&D achievements is expected to continue in the second half of the year.
Chong Kun Dang received a milestone of $5 million (69 million won) for its cardiovascular treatment candidate 'CKD-510' from Novartis in Switzerland in 2023, following the submission of the investigational new drug (IND) application to the U.S. Food and Drug Administration (FDA). This is the first milestone following the contract fee of $80 million (110.9 billion won) received at the time of the 2023 agreement.
ABL Bio will reflect the contract fee of 74 billion won received from GlaxoSmithKline (GSK) in its second quarter results. The company transferred technology for crossing the blood-brain barrier (BBB) to GSK in a deal worth up to 4.1 trillion won last April.
After recording profits with technology transfer contracts with companies such as Yuhan Corporation, Sanofi, and Compass Therapeutics starting in 2018, ABL Bio faced operating losses since the second quarter of 2023. This large contract with GSK is expected to lead to a return to profitability after two years.
OliX Pharmaceuticals will receive approximately 4.3 billion won as a milestone for the RNA interference (RNAi) new drug candidate transferred to Hansoh Pharmaceuticals in China, which will be reflected in its second quarter results.
OliX Pharmaceuticals' RNA interference technology can suppress two genes simultaneously using short-strand RNA. In contrast, existing RNA interference therapeutics regulate only one gene. The company has received its first milestone before entering the key phase of evaluating the safety of its new drug candidate through Good Laboratory Practice (GLP) toxicology tests.
The strong performance trend of domestic pharmaceutical and biotech corporations due to R&D results is expected to continue in the second half of the year. Kim Seung-min, a researcher at Mirae Asset Securities, noted, "Despite overall sluggishness in the pharmaceutical and biotech sectors due to external uncertainties such as tariffs and drug price reductions, the R&D results of some corporations are leading to improvements in stock prices and results," and added, "Expectations for technology exports from Alteogen, LigaChem Biosciences, ABL Bio, and others will also persist in the second half with hopes for interest rate cuts."