Chairperson Lee Haeng-myeong of Myung In Pharm, known for the gum medication "Igatant," recently gifted shares to two children. It has been seven months since the KOSPI listing. Observers say the second-generation succession is accelerating amid a share price downturn.
Myung In Pharm disclosed on the 8th that Chairperson Lee's equity in Myung In Pharm fell to 43.62% from 50.88%. That is because Lee gifted 4.32% (630,000 shares) and 2.26% (330,000 shares) to children Lee Seon-yeong and Lee Ja-yeong, respectively.
Lee also gifted 0.68% (100,000 shares) to the Myung In Multicultural Scholarship Foundation. Lee established the foundation in 2023 by contributing 35 billion won. Currently, the equity held by the largest shareholder of Myung In Pharm and related parties, including Lee Seon-yeong (12.05%), Lee Ja-yeong (10.27%), and the Myung In Multicultural Scholarship Foundation (4.11%), amounts to 73.47%.
A Myung In Pharm official said, "We judged this is an appropriate time to gift equity (to the children)," adding, "There will be no family participation in management." The official also said, "The foundation has been increasing scholarship recipients each year, and to continue that support we granted equity to the foundation."
Myung In Pharm was founded in 1985 by Chairperson Lee, formerly a sales representative at Chong Kun Dang pharmaceutical. The company listed on KOSPI in Oct. last year and in Mar. this year appointed co-CEOs Lee Gwan-soon and Cha Bong-gwon, shifting to a professional management system. CEO Lee hails from Hanmi Pharmaceutical, and CEO Cha is from Myung In Pharm's first open recruitment class.
Chairperson Lee's children are not currently employed at Myung In Pharm. However, Lee Seon-yeong serves as CEO of Medi Communication, established in 2005 for real estate leasing. According to last year's audit report, Medi Communication is 100% owned by Lee Seon-yeong (52%) and Lee Ja-yeong (48%).
In business circles, there is an assessment that Chairperson Lee, born in 1949, has begun equity succession. The decline in Myung In Pharm's share price also works in favor of the gift. For listed stocks, gift tax is assessed based on the average share price over a total of four months—two months before and after the gift date. Myung In Pharm's closing price finished trading in the 50,000-won range on the 15th, down from 121,900 won on the first day of listing.
A Myung In Pharm official said, "At the time of listing, there was a lock-up period (six months), so gifting equity was not possible," adding, "This was merely an equity gift as part of personal asset management and did not consider any particular price trend or range."
Myung In Pharm is known not only for Igatant but also for the constipation drug Maykin Q and central nervous system (CNS) treatments for depression and schizophrenia. However, because a large portion of its prescription drugs are generics, it faces the task of responding to government drug price cuts.
Myung In Pharm plans to strengthen profitability through businesses such as pellets. Pellets are a type of small granule containing active ingredients. They control the rate and site of drug release in the body. With relatively few competitors at home and abroad, the company says it can generate stable revenue.
Myung In Pharm plans to complete construction of its second plant in Balan, Hwaseong, Gyeonggi, this year. Pellet dosage production capacity will increase from 50 million capsules to 250 million capsules. The company will expand its pellet-based CDMO (contract development and manufacturing organization) business.
In the first quarter this year, Myung In Pharm posted consolidated sales of 72.1 billion won and operating profit of 25.1 billion won. Sales rose 3% and operating profit increased 15% from the same period last year. The operating margin exceeds 30%. The company says it can lower costs because it handles all processes from raw material synthesis to finished drug production.