Korea's pharmaceutical and biotech corporations are set to announce third-quarter results this year. The industry expects Samsung Biologics and Celltrion to post the largest quarterly operating profits on record, extending their earnings growth. Among the five major domestic drugmakers—GC Biopharma, Daewoong Pharmaceutical, Yuhan Corp., Chong Kun Dang, and Hanmi Pharmaceutical—results are expected to be mixed.
Celltrion was first to release third-quarter results this year. The company said on the 21st that, on a consolidation basis, third-quarter sales rose 16.3% from a year earlier to 1.026 trillion won, and operating profit increased 44.9% to 301.0 billion won. It marked the highest third-quarter sales and the highest quarterly operating profit ever. The operating margin was 29.3%.
High-margin new products, led by the autoimmune disease treatment "Remsima SC," drove earnings growth, with sales up 51% from the same period last year. The company said, "With stable sales of key products across the globe, the expansion of sales of new, high-margin products boosted profitability."
In the third quarter, the risk of U.S. tariff imposition surfaced, but the won-dollar exchange rate surged into the 1,400-won range against the dollar, which appears to have been favorable for corporations with a large share of overseas business.
Samsung Biologics is also projected to continue its earnings growth. According to FnGuide's third-quarter consensus (brokerage average forecast), Samsung Biologics' third-quarter sales are estimated at 1.5506 trillion won and operating profit at 505.2 billion won. That would surpass the all-time highest quarterly sales of 1.2983 trillion won recorded in the first quarter.
With both companies' quarterly results on a growth track this year, some say they are on course to meet full-year targets. Samsung Biologics is aiming for its first annual sales of 5 trillion won and its first operating profit of 2 trillion won. Celltrion initially set a full-year sales target of 5 trillion won early this year but revised it in July to 4.5 trillion–4.6 trillion won. At the current pace, it is expected to easily surpass 4 trillion won.
Third-quarter sales at the five major domestic drugmakers generally rose from a year earlier, but some companies likely saw operating profit decline from last year.
According to FnGuide's third-quarter consensus, Hanmi Pharmaceutical's third-quarter sales are projected to increase 4.3% from a year earlier to 376.7 billion won, with operating profit up 12.94% to 57.6 billion won. During the same period, Daewoong Pharmaceutical is expected to see sales rise about 5% to 377.4 billion won and operating profit increase 19% to around 47.7 billion won.
In the same period, Chong Kun Dang and GC Biopharma were seen posting higher sales but lower operating profit. Chong Kun Dang's third-quarter estimated sales were presented at 437.3 billion won, up 7.1% year over year, with estimated operating profit at 20.1 billion won, down 20.5%. GC Biopharma's third-quarter sales were projected to rise 9.9% from last year to 510.8 billion won, with expected operating profit down 21.5% to 31.1 billion won.
For GC Biopharma, observers said overall cost ratios likely rose and profitability declined as estimated sales of high-margin products edged down and the share of low-margin products increased. Chong Kun Dang was seen facing pressure on sales and profit due in part to price cuts for key products.
Yuhan Corp. was seen posting lower third-quarter sales and operating profit from a year earlier. In the third quarter of last year, Johnson & Johnson (J&J) subsidiary Janssen won U.S. Food and Drug Administration (FDA) approval for the Leclaza–Rybrevant combination therapy, leading the company to receive a $60 million milestone payment, which likely created a base effect.
The market also has expectations for fourth-quarter business performance by drugmakers and for full-year earnings growth this year. The fourth quarter is generally considered a seasonal peak period when demand rises for cold medicines and respiratory disease treatments.
Heo Hyemin, an analyst at Kiwoom Securities, said in a report on the 21st regarding Chong Kun Dang, "As early as October, we look forward to the disclosure of the indication for CKD-510 (an HDAC6 inhibitor), a new drug candidate transferred to Novartis." The analyst initially set Charcot-Marie-Tooth disease as the candidate's indication and calculated the new drug's value at 180.1 billion won, noting that the value could be raised depending on the disclosed indication. The analyst then upgraded the investment opinion on Chong Kun Dang to "buy" from "neutral." Regarding GC Biopharma, Heo said, "Sales of Aliglo, considered a high-margin product, appear likely to be concentrated in the fourth quarter."
Seo Geun-hee, an analyst at Samsung Securities, said of Yuhan Corp., "In the third quarter, quarter-over-quarter growth in sales of the Leclaza–Rybrevant combination therapy was around 10%, below market expectations, but J&J still maintains a positive view." The analyst added, "Once the combination therapy secures median overall survival (mOS) data within the year, we expect it to be reflected in the U.S. NCCN guidelines as a preferred first-line therapy."