GCGC Wellbeing(234690)'s share price has risen nearly 20% over the past three months, drawing attention across the industry. The company is best known for nutrition injections but is attracting investor interest as it enters the obesity market. Beyond distributing the obesity drug Mounjaro, it is expanding its business by securing the domestic rights to a submental fat-dissolving injection. However, it still faces the task of obtaining approval and succeeding in commercialization.
◇ Secures Korea rights to submental fat-dissolving injection
GC Wellbeing has a strategic partnership with Israeli company Raziel Therapeutics (Raziel). Raziel is developing an injectable candidate (RZL-012) that targets submental fat. Existing fat-dissolving injections require 3 to 6 administrations at one-month intervals. Raziel aims for efficacy with a single administration. GC Wellbeing holds the domestic rights to the fat-dissolving injection.
Raziel's fat-reduction injection recently showed efficacy in a phase 3 trial in China. Through Zhuhui Star, an affiliate of its Chinese partner Fosun Pharma, Raziel administered the fat-dissolving injection to 480 adult patients with double chins. The company said that as a result, the fat-reduction effect persisted even 84 days after a single administration. There were no particular safety issues. Raziel and Fosun Pharma plan to apply for marketing approval with the National Medical Products Administration in China. A company official said, "However, it cannot be concluded that the same level of effect was maintained for the full 84 days."
Even with phase 3 results in China, that does not immediately lead to a domestic launch. For patients in Korea to receive the fat-dissolving injection, separate clinical trials and approval from the Ministery of Food and Drug Safety are required. GC Wellbeing says it is preparing for domestic trials. Another task is to expand prescribing beyond submental fat to the thighs, flanks, and upper arms. The company said that separate phase 2 results in the United States showed that a single procedure reduced submental and flank fat. The goal is to enter phase 3 in the United States and clear the Food and Drug Administration (FDA).
◇ Developed to be used alongside Mounjaro
GC Wellbeing currently distributes Mounjaro to domestic clinics and hospitals. When Korea Lilly supplies Mounjaro to its accounts, GC Wellbeing acts as an intermediary to provide it to medical institutions through some wholesalers. Mounjaro is a drug that mimics the glucagon-like peptide (GLP)-1 hormone secreted in the gut after meals, slowing the rate at which food leaves the stomach to increase satiety.
A strategy is possible to link care so that after a patient loses overall body weight with Mounjaro and other drugs, sagging submental fat or bulges can be addressed with a fat-dissolving injection. A company official said, "We can dissolve fat in specific areas of choice," adding, "We are developing it so that body shape can be managed in parallel with GLP-1 class obesity drugs."
GC Wellbeing's consolidated sales for the first half of this year were 101.2 billion won, with operating profit of 9.5 billion won. Sales rose 37% from the same period a year earlier, and operating profit increased 3%. The existing placental injection Laennec accounts for one-fourth of total sales and serves as a cash cow (profit source).
The key question is whether the fat-dissolving injection can establish itself as a new growth engine. GC Wellbeing can leverage its existing sales network to roll out the fat-dissolving injection. However, the fact that many domestic corporations are entering the obesity market and competition is intensifying is a variable.
GC Wellbeing is a shareholder holding equity in Raziel. The size of the stake was not disclosed under a confidentiality clause. Raziel aims to list on Nasdaq in the United States.
Ultimately, the benefits GC Wellbeing can reap will vary depending on whether Raziel completes trials in each country, succeeds in approval and launch, and goes public. A company official said, "We expect mid- to long-term investment revenue from Raziel's commercialization and related developments."