With the United States and Iran agreeing to end the war, easing raw material supply jitters, and the government discussing ways to cover hair loss treatments under the national health insurance, attention is turning to the JW group. JW Life Science, which runs an infusion (輸液) business, can ease cost pressures, and JW Shinyak, which has hair loss treatments, can expect wider patient prescriptions.
Infusions supply water, electrolytes and nutrients through intravenous injection. JW Life Science produces infusions and supplies them to large hospitals and clinics through JW Pharmaceutical and JW Shinyak. In the first quarter of this year, JW Life Science's basic, nutrition and special infusion sales were 33.4 billion won, accounting for more than 56% of total sales.
The infusion bag that holds the infusion is made from naphtha, a petrochemical product. Naphtha faced an emergency in supply and demand as the Strait of Hormuz was blocked by the Middle East war. The company produced infusions using materials and supplies arriving via detour routes. Thanks to that, it did not cause major problems in medical settings, but the company noted that there was an expense for procuring materials and supplies in the process.
With the United States and Iran agreeing to halt the war and reopen the Strait of Hormuz, cost pressures are expected to gradually ease. A company official said, "It appears it will help improve infusion margins."
As the government discusses applying national health insurance to hair loss treatments for young adults, JW Shinyak is also drawing attention. JW Shinyak has hair loss treatments in the finasteride and dutasteride classes. If health insurance is applied to hair loss treatments, patients' out-of-pocket costs would decrease, potentially increasing prescriptions, according to projections. JW Shinyak's closing price jumped 59% in one week, from 1,301 won on the 11th to 2,065 won on the 18th.
Of course, variables remain. If hair loss treatments shift from non-reimbursed to reimbursed, there could be pressure to cut prices. Drugs financed by the national health insurance fall under the price management of the National Health Insurance Service. Price adjustments are inevitable during the reimbursement listing process. Analysts say both the increase in prescription patients and the possibility of price cuts must be considered.
If reimbursement is applied to hair loss treatments, more pharmaceutical companies could enter, potentially expanding the market. In this process, corporations that contract manufacture hair loss treatments could also benefit, according to projections. JW Pharmaceutical operates a contract manufacturing business related to dutasteride tablets.
A pharmaceutical industry official said, "Not only corporations that sell hair loss treatments but also those that contract manufacture them appear likely to benefit." With supply jitters from the Middle East easing and even reimbursement for hair loss treatments under discussion, the industry is watching to see whether a green light will turn on for the JW group.