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Will LG succeed in prescription, OTC drug markets?
  • By So Jae-hyeon
  • Published 2017.11.23 15:03
  • Updated 2017.11.23 15:03
  • comments 0

LG Group has been expanding its pharmaceutical and biopharmaceutical business this year. After the group’s chemicals unit LG Chem merged with LG Life Sciences early this year, cosmetics manufacturer LG Household and Health Care acquired Tai Guk Pharmaceutical in November.

While LG Chem focuses on prescription drugs such as vaccines and diabetes treatments where LG Life Sciences has a specialty, LG Household and Health Care is likely to tap over-the-counter medicine and quasi-drugs where Tai Guk has many drug licenses. Using both units, the LG Group is expected to expand its power in pharmaceutical and biotech industries, observers said.

By acquiring Tai Guk, LG Household and Health Care can enhance its status in the skin care market and expand distribution channels to pharmacies. Tai Guk is widely known for Domina Cream, an OTC drug to treat freckles and blemishes. It also holds many licenses for prescription drugs and OTC drugs.

Tai Guk has more than 440 drug licenses – 259 in OTC and 166 in prescription drugs. Most of its 60 billion-won sales last year came from OTC drugs, including skin beautifier Domina Cream, scar treatment Bentrax Gel, burn treatment Taiguk Azlen S Cream, and bruise relief cream Bentfla.

Upon acquiring Tai Guk, LG Group announced its plan for massive investment in prescription drugs and vaccines business.

The group said it would annually invest 300 billion to 500 billion won ($275 million -$458 million) in R&D and facility building for pharmaceutical and biotech business every year, which is more than triple the size of LG Life Sciences’ annual investment of 130 billion won. The massive investment is boosting the development of a new hexavalent combination vaccine that added inactivated polio vaccine (IPV) to the existing DTwP-HepB-Hib combo vaccine.

Some sources said it was rare that two different subsidiaries under a group to handle OTC drugs and prescription drugs separately.

“The acquisition of Tai Guk offers us a glimpse into LG Group’s strong will to expand pharmaceutical and biopharmaceutical business,” a pharmaceutical industry source said. “I’m curious to see how LG Chem and LG Life Sciences will manage OTC and prescription drugs, while most of other drugmakers hold licenses in OTC and prescription drugs simultaneously, draw up marketing and branding strategies altogether, and seek synergies among them.”

sjh@docdocdoc.co.kr

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