CJ Bioscience continued to show sluggish performance in 2022 even after CJ Group, a Korean conglomerate, acquired the company.

CJ Group acquired Chunlab, which specializes in microbiome treatment, in January last year and restarted its bio-business after renaming the company to CJ Bioscience.

At that time, CJ Group vowed to develop new microbiome-based drugs, strengthen its wellness business's competitiveness through CJ Bioscience, and grow the unit as the group's future growth engine.

Despite setting such goals, the company has yet to make any noticeable results, while losses are widening.

CJ Bioscience recorded cumulative sales of 2.6 billion won ($2.1 million), and an operating loss of 20.7 billion won in the third quarter of last year, already exceeding the operating loss of 10.1 billion won in 2021.

While the company has yet to disclose its 2022 performance, industry watchers expect that the company would have recorded the largest deficit ever, with sales also likely to hit the lowest level in five years.

Losses from overseas affiliates are also growing.

EzBiome, a local subsidiary for new drug development established by CJ Bioscience in the U.S. in 2020, is also suffering a net loss. As of the third quarter of last year, it was in a deficit of about 1.3 billion won.

ChunLab LBP Pty, CJ Bioscience's Australian offshoot, is also still in a deficit, with a net loss of 12.1 million won, during the same period.

Regarding the continued net loss and decrease in sales, CJ Bioscience stressed that it is currently focusing on four business development directions -- securing R&D capabilities, developing new drugs based on the bio-digital platform, expanding genome diagnosis and contract development and manufacturing organization (CDMO) business, and health functional products – to resolve the issue.

While still in its early stages, the company announced last Wednesday that the phase 1/2 clinical trial investigation new drug (IND) application for CJRB-101, a microbiome immunotherapy candidate drug submitted to the U.S. Food and Drug Administration (FDA) at the end of last year, has been approved.

As the approval was decided less than one month from the time of application, the company expects that R&D, including clinical trials, will accelerate.

The company plans to conduct clinical trials to evaluate the safety and preliminary efficacy of CJRB-101 and pembrolizumab in patients with advanced or metastatic cancers such as non-small cell lung cancer, squamous cell carcinoma of the head and neck, and melanoma.

The trial will run at multiple clinical trial institutions in the U.S. and Korea, and CJ Bioscience plans to recruit up to 46 people in phase 1 and up to 120 people in phase 2.

CJ Bioscience is also increasing the cost of research and development, expanding the 'comparative control method disease study (cohort)' and securing big data on the human microbiome, and building a bio-digital platform.

The company plans to promote new drug development through the bio-digital platform by shortening the clinical period by making the existing microbiome new drug candidate material platform more precise.

It is also planning to focus on expanding its new business globally by utilizing CJ CheilJedang's U.S. infrastructure.

However, a local analyst stressed that an increase in R&D expenditure does not account for the continued decrease in sales.

"Increases in research, investment, and promotional expenses do not generally result in reduced sales," a local analyst told Korea Biomedical Review, requesting anonymity because of the company's policy. "While continued investment in R&D is a positive sign that the company still has high trust in its business, as the company is a listed company on the Kosdaq stock market, the company needs to generate some    sales performance to maintain its stock price."

As of 11:05 a.m., Monday, CJ Bioscience's shares stood at 30,250 won, down 1.47 percent from the previous trading day.