Bukwang Pharmaceutical said on the 21st that, on a consolidation basis, its operating profit for the first quarter was 1.1 billion won, down 62.6% from a year earlier on a preliminary basis. Revenue in the same period also fell 0.1% to 47.8 billion won.
Chief Executive Lee Jae-young of Bukwang Pharmaceutical said on a conference call that day that the main reason was an increased burden of manufacturing costs as outsourcing rose while securing production capacity to address product outages. Lee added that, because the company had faced product outage issues for several years, it shifted some over-the-counter drugs and toothpaste to outsourcing to stabilize supplies of key prescription drugs, and the resulting manufacturing cost burden was reflected in operating profit.
Topline indicators were solid. Based on external prescription data, first-quarter prescription performance for prescription drugs rose 8.7% from a year earlier, and the central nervous system (CNS) business unit grew 36%.
The company plans to push ahead with production structure improvements over the mid to long term. Lee said, "We are proceeding with automation at the Ansan plant and the acquisition of UNION KOREA PHARM," adding, "After the acquisition is completed, we will reorganize the production portfolio to ease cost burdens."
New drug development will proceed in parallel. Subsidiary Contera Pharma plans to submit an investigational new drug (IND) application for phase 2 clinical trials of "CP-012," a treatment for morning akinesia in Parkinson's disease, to the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) in the first half.
Lee said, "This year, volatility in operating profit is expected due to CP-012 phase 2 expense and base effects from last year's Lundbeck contract," but added, "We will maintain a profit-making stance."