First-quarter results for Korea's pharmaceutical and biotech sector showed a clear polarization depending on the size of the corporations and their business structures. Large drugmakers and some biotech corporations sustained growth on the back of technology exports and overseas expansion, while small and midsize drugmakers and corporations with a high share of research and development (R&D) investment faced slowing profitability and continued losses.
According to the industry on the 20th, among the 13 large drugmakers with first-quarter sales of 200 billion won or more, 11 corporations (85%) increased operating profit from a year earlier. Only two saw operating profit decline, and none posted an operating loss. In contrast, about half of the 26 small and midsize drugmakers with sales under 100 billion won recorded a decline in operating profit or an operating loss, worsening profitability.
◇ Two K-bio leaders drive earnings growth; traditional drugmakers also rise on overseas sales
First-quarter results were led by the so-called two leaders of K-bio. Both companies set new record first-quarter results, steering growth in Korea's biotech sector. Overseas orders and sales expansion, along with a favorable exchange rate, helped improve performance.
Contract development and manufacturing organization (CDMO) Samsung Biologics posted sales of 1.2571 trillion won and operating profit of 580.8 billion won, up 25.8% and 35%, respectively, from a year earlier. Higher utilization across plants 1 to 4 and steady growth in overseas orders are cited as drivers of growth. The company also recently wrapped up procedures to acquire a Rockville, U.S., manufacturing site, further strengthening global order competitiveness.
Celltrion also expanded its growth, with sales of 1.145 trillion won and operating profit of 321.9 billion won, up 36% and 115.4%, respectively. Eleven biosimilar products sold in the United States and Europe maintained stable sales, while high-margin new product lines increased sales by 67% year over year, lifting profitability.
SK Biopharmaceuticals likewise delivered strong results on the back of growth in its epilepsy drug Cenobamate (U.S. brand Xcopri) sold in the United States. Sales were 227.9 billion won and operating profit was 89.8 billion won, up 58% and 250%, respectively, from a year earlier.
Traditional drugmakers also maintained a relatively stable trajectory amid pressure to cut domestic drug prices.
Yuhan posted sales of 509.6 billion won and operating profit of 8.8 billion won, up 8.6% and 2.1%, respectively. Royalties from the lung cancer drug Leclaza and overseas expansion supported the improvement.
Chong Kun Dang pharmaceutical, helped by the co-promotion effect of Novo Nordisk's obesity treatment Wegovy, recorded sales of 447.7 billion won and operating profit of 17.6 billion won, up 12.2% and 36.9%, respectively.
GC Biopharma increased sales 13% to 435.5 billion won from 383.8 billion won, the highest sales growth rate among major traditional drugmakers. The rise is attributed to sales of its blood product "Aliglo" launched in the U.S. market, which grew about fourfold year over year.
On the other hand, some corporations saw profitability worsen despite sales growth. Hanmi Pharmaceutical's sales edged up 0.5% to 392.9 billion won, but operating profit came to 53.6 billion won, down 9.1% from a year earlier, due to the end of clinical sample supply to a global partner.
Daewoong Pharmaceutical also grew sales to 377.8 billion won on the back of its botulinum toxin Nabota, over-the-counter medicines, and digital healthcare, but operating profit fell more than 40% to 22.2 billion won.
◇ KOSDAQ bio shows a split between technology export gains and R&D burden
Among KOSDAQ biotech corporations, Alteogen delivered the most eye-catching results. Alteogen posted first-quarter sales of 71.6 billion won and operating profit of 39.3 billion won. A technology export contract for its subcutaneous (SC) conversion platform ALT-B4 (Hybrozyme) drove performance.
In contrast, corporations that embarked on large-scale clinical development continued to log losses as research and development (R&D) expense burdens ramped up.
LigaChem Biosciences posted an operating loss of 42.2 billion won, swinging to a deficit. Although last year's annual operating loss widened to 106.5 billion won, the company is focusing on building new pipelines with R&D investment in the 200 billion won range. To date, it has signed a total of 12 technology transfer deals worth about 9.6 trillion won and aims to have 15 antibody-drug conjugate (ADC) oncology candidates enter clinical trials by next year.
HLB increased sales to 18.7 billion won from a year earlier, but recorded an operating loss of 23.2 billion won. Its liver cancer treatment Rivoceranib is still pre-commercial, and the company is focusing on late-stage clinical trials of the cholangiocarcinoma treatment Rilafugratinib and development of chimeric antigen receptor T cell (CAR-T, "carty") therapies, among other R&D.
ABL Bio also saw sales rise to 13.1 billion won as technology transfer revenue was reflected, but it posted an operating loss of 17.2 billion won while simultaneously running seven clinical trials across brain disease and oncology pipelines.
Industry observers say performance polarization among corporations is becoming more pronounced depending on global business footing and revenue structure. Corporations with overseas sales networks and large-scale manufacturing capacity continued growth on the back of stable cash flow, while research and development-focused biotech corporations are assessed to be struggling to secure profitability as clinical expense burdens grow.
An industry official said, "In Korea, the number of pharmaceutical and biotech corporations with annual sales exceeding 1 trillion won has increased to nine, but actual growth is concentrated among a few top corporations, so the gap between corporations could widen further depending on whether they achieve technology exports or late-stage clinical results," adding, "To keep polarization from deepening, policy support such as expanded clinical support, regulatory easing, and investment activation is also needed."