Myung In Pharm, a 40-year-old company known for its gum disease treatment "Igatang," has moved to transform into a central nervous system (CNS) new drug corporations focused on dementia, Parkinson's disease, and schizophrenia. It also recently began steps toward domestic commercialization of an improved Parkinson's disease drug brought in from an overseas partner.
However, as the partner has entered bankruptcy proceedings, its response strategy over future business rollout and rights structure has been put to the test.
According to the pharmaceutical industry on Dec. 16, Myung In Pharm filed for marketing approval in September with the Ministery of Food and Drug Safety for the improved Parkinson's disease drug "Paxroyah (P2B001)" introduced from Israel's P2B. The drug, which completed phase 3 trials in the United States and Canada, has finished a bioequivalence clinical trial in Korea with 56 participants, and the company is aiming for a domestic launch in 2027 if procedures proceed smoothly.
Founded in 1985, Myung In Pharm was started by Chairman Lee Haeng-myung, a former Chong Kun Dang sales representative. The company built broad recognition with over-the-counter medicines such as Igatang and the constipation treatment "Maykin," and later expanded its business structure around CNS prescription drugs. Sales and operating profit have shown steady growth, and the market expects this year's operating profit to be about 95 billion won.
Myung In Pharm, which listed on the KOSPI market in October, drew attention as its share price more than doubled from the offer price on the first day. Its market capitalization on the listing day was about 1.77 trillion won, placing it among the top listed pharmaceutical companies after Yuhan Corp. (in the 9 trillion won range) and Hanmi Pharmaceutical (in the 3 trillion won range).
However, the stock has since undergone a correction. The share price, which closed at 121,900 won on the listing day, has recently fallen to around 78,000 won. As a result, market capitalization has shrunk to about 1.14 trillion won. The market views the stock as still overvalued compared with traditional pharmaceutical companies and points to the fact that new drugs cited as the next growth engines are expected to contribute to earnings from 2027 onward as a risk factor.
Myung In Pharm's core business is not over-the-counter drugs like Igatang and Maykin. The company mainly produces CNS specialty medicines for diseases such as dementia and Parkinson's at manufacturing facilities that meet current good manufacturing practice (cGMP) standards, and this institutional sector accounts for about 80% of total sales.
The reason the company chose to list was also to secure funds for new drug development. Myung In Pharm is accelerating new drug development and product line expansion. In 2021, it made a $6.2 million (Hanwha 8.6 billion won) equity investment in Israeli pharmaceutical company P2B and signed an exclusive domestic sales and production agreement for the improved Parkinson's disease drug "Paxroyah (P2B001)," which finished phase 3 trials in the United States and Canada.
The problem is P2B's bankruptcy. P2B effectively entered liquidation after applying for court receivership with an Israeli court due to accumulated liability and a failed merger.
Myung In Pharm has already written off in full the 8.3 billion won equity investment made in 2021. Under the contract structure, if P2B goes bankrupt, the exclusive domestic supply agreement for Paxroyah could also be subject to termination demands.
On this, Myung In Pharm said that development and commercialization will proceed without disruption regardless of the partner's financial condition. The company noted that while short-term losses are inevitable, if commercialization rights are maintained, they could translate into long-term growth opportunities. However, the prevailing market view is that it is necessary to watch uncertainties over the actual rights structure and cost burden.
P2B is currently also pushing to sell assets related to domestic patent rights. If Myung In Pharm acquires the patents directly, additional expense will occur, and if a third party acquires them, royalty terms will have to be renegotiated. Uncertainty remains, as business viability could be affected depending on the choice.
A Myung In Pharm official said, "We are currently in the adjustment process to acquire domestic patent rights," and added, "We are coordinating to ensure there are no problems with domestic commercialization."
Despite these risks, Myung In Pharm continues to expand its production capacity. In preparation for Paxroyah production, it plans to complete construction of a new solid-dosage unit at the second Banwol plant in Hwaseong by next year.
Focusing on pellet (small tablets or hemispherical granules) formulations, the company also plans to expand its contract development and manufacturing organization (CDMO) business and increase its production capacity from the existing 50 million capsules to 250 million capsules.
Along with this, Myung In Pharm last year signed an exclusive domestic agreement for the schizophrenia treatment new drug "Evenamide (NW-3509)" from Newron, an Italian CNS therapy developer.
The company is in charge of the domestic phase 3 trial and has invested about 35 billion won in research and development (R&D), recruiting about 10% of the total clinical patients domestically.
The industry assesses that Myung In Pharm stands at an important inflection point to establish itself as a CNS new drug corporations beyond its over-the-counter image.
An analyst at a securities firm said, "Amid the unexpected variable of the partner's bankruptcy, how the rights structure is resolved and whether it can lead to new drug commercialization are cited as key variables for future corporate value."