Korea Biomedical Review is publishing a series of articles to analyze the top 10 Korean pharmaceutical and biopharma companies with the largest market capitalizations listed on the main bourse, Kospi, and the tech-heavy Kosdaq. The series aims to reflect key industrial issues and the flow of the capital market in the Korean pharmaceutical and biopharma industry. This is the thirteenth installment. -- Ed.

Caregen, a biotech firm listed on the Kosdaq exchange, said it expects to more than double its sales to 150 billion won ($113 million) this year from 69.1 billion won last year.

Despite the high projected sales increase, industry watchers believe that Caregen's revenue targets are reasonable given the company's strong business environment.

Caregen is confident in sales growth due to a series of overseas export contracts for ProGsterol (ingredient: deglusterol), a health-functional food that has a mechanism to suppress insulin resistance and increase insulin sensitivity, preventing damage to beta cells in the pancreas that secrete insulin.

Deglusterol was registered as a new dietary ingredient (NDI) by the U.S. Food and Drug Administration (FDA) in March last year in recognition of its functionality and stability.

The approval also marked the first time in the world that a synthetic peptide has been registered for use as a dry food ingredient.

Cargen expects robust revenue from ProGsterol

Caregen expects annual sales of ProGsterol to reach 100 billion won this year. 

The company has already confirmed strong growth for the product in the first quarter of this year, as the export contracts it had signed late last year began to show positive results in the first quarter.

Sales of ProGsterol, which stood at 200 million won last year, surged to 6 billion won in the first quarter of this year.

The company previously said it had signed export supply contracts worth more than 1 trillion won with 11 countries as of the beginning of March.

These export contracts were signed on an exclusive sales basis, with one designated partner per country, who bears the registration process and marketing costs.

The company said the supply contracts are mainly with countries in the Middle East, South America, and Southeast Asia, excluding the U.S., the world's largest market.

Caregen is meeting with several companies to discuss the terms of the agreements to enter the U.S. market fully.

The company has already entered the U.S. market indirectly for ProGsterol, as the product was listed on the Amazon marketplace in December last year.

If the product supply and export go smoothly, Caregen expects to generate at least 60 billion won from ProGsterol alone this year, with the potential for the sales of the product to reach 100 billion won if the company manages to sign additional contracts.

When adding ProGsterol sales to the company's existing specialty therapies (fillers and mesos), cosmeceuticals, and raw materials (peptides and growth factors), industry insiders believe that the company will easily achieve its sales target of 150 billion won this year.

Meanwhile, Caregen is also building a large peptide library.

It sells functional cosmetics with related technologies to 130 countries around the world. Caregen is also developing products for macular degeneration and anti-obesity based on peptides. As of the end of last year, Caregen had applied for 949 domestic and international patents and completed registration for 593.

Caregen's growth value recognized overseas

Caregen's corporate value is also receiving attention from foreign investors.

Just last month, Nomura Securities announced a target price of 270,000 won for Caregen.

"With strong new product momentum, I expect that the company can achieve an annual growth of more than 40 percent and an operating profit margin (OPM) of more than 60 percent over the next three years," said Cara Song, an analyst at Nomura Securities.

Song stressed that deglusterol is a dietary supplement that effectively helps control blood sugar, and since Caregen received FDA approval for the safety and efficacy of progesterone, the company has accumulated $476 million in orders from 12 countries around the world.

"This represents 4.7 percent of the global blood sugar management health functional food market measured in 2022," she said. "Driven by the high price of 30 won per unit and robust demand, progesterone sales are expected to reach 50 billion won in the current fiscal year, accounting for 40 percent of its sales."

According to Song, strong exports of medical beauty products and new product launches will also lead to higher profits.

"Caregen's medical aesthetic products business has posted a compound annual growth rate of 8 percent and a high operating margin of 50 percent over the past four years, driven by product differentiation using peptide technology and a diversified medical device product lineup," Song said. "Caregen is also currently developing deglusterol for weight control and is conducting separate clinical studies for macular degeneration, antiviral nasal spray, and functional animal food."

Meanwhile, as of 3:25 p.m Wednesday, Caregen's shares stood at 193,800 won, up 0.41 percent from the previous trading day.