As the Ministery of Food and Drug Safety recommended halting the use of selglicotide formulations used to treat gastric and duodenal ulcers and inflammation, there is speculation that the burden on Samil Pharmaceutical's profitability could also grow.
Currently, the only selglicotide formulation approved in Korea is Samil Pharmaceutical's "Gliptide tablet 200 mg." As of the third quarter of last year, this product accounted for 5.4% of the company's total sales.
The Ministery of Food and Drug Safety said on the 5th that, based on the results of a reevaluation of drug safety and efficacy, selglicotide formulations failed to demonstrate efficacy for the relevant indications. Accordingly, it distributed a drug information letter recommending that medical staff and patients stop using the drug and choose alternative treatments.
However, the Ministery of Food and Drug Safety determined that there were no safety issues, based on a review of the submitted materials and the advice of the Central Pharmaceutical Review Committee.
According to pharmaceutical distribution performance data, Gliptide's annual sales were 11.5 billion won in 2019, 8.4 billion won in 2020, 6.5 billion won in 2021, 8.4 billion won in 2022, and 8.8 billion won in 2023. The industry estimates cumulative sales at between 150 billion won and 200 billion won.
If this leads to the deletion of National Health Insurance reimbursement, there is talk that the company could pursue legal action, such as filing for an injunction against the reimbursement suspension. In 2012, during the cleanup of the existing listed drug roster, Gliptide had its reimbursement maintained on the condition of conducting a domestic clinical trial related to the gastritis indication.
Samil Pharmaceutical is known to have maintained its reimbursement status by conducting a multicenter clinical trial on about 120 domestic patients at the time.
Some also say the issue could be a litmus test for the management performance of Chairman and CEO Heo Seung-beom's leadership. Chairman Heo is the grandson of the late founder Heo Yong, former chairman, and the eldest son of former Chairman Heo Kang. After Heo Kang stepped down as CEO, the company was run under a co-CEO system with former President Kim Sang-jin, and later shifted to Chairman Heo's sole leadership.
The company's results have recently shown a worsening trend. In 2024, when Chairman Heo established a sole-CEO system, net income swung to a loss and operating profit plunged 98.2%. Last year, with declining sales, both operating profit and net income turned to losses.
Samil Pharmaceutical's sales last year were 210.3 billion won, down 4.24% from the previous year. During the same period, operating profit shifted from 100 million won to a loss of 22.1 billion won. The net loss widened from 5.6 billion won to 34.5 billion won.
The company cites increased expense due to investment in a Vietnam ophthalmic solution contract development and manufacturing organization (CDMO) plant as the reason for deteriorating results. It said the burden of SG&A grew as staffing and management costs increased during commercial production preparation and the process of obtaining GMP approval.