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 seventeenth installment. -- Ed.

PharmaResearch is forecasting significant growth this year, backed by strong sales from its flagship product Rejuran.

Rejuran is a medical device that treats facial wrinkles, launched by PharmaResearch in 2014. It is a biomaterial for tissue repair that combines sodium polynucleotide, a biocompatible substance. The substance is extracted from salmon DNA. That explains why Rejuran is often called "salmon injection."

The product showed strong growth this year. In the first quarter, PharmaResearch's medical device division, which sells Rejuran, reported sales of 27.6 billion won ($21.4 million), up 21.8 percent compared to last year.

Notably, the company saw a 191.5 percent surge in exports, recording overseas sales of 10.4 billion won, led mainly by Rejuran, marketed in Singapore, Thailand, Malaysia, Ukraine, and China.

The product has shown strong growth in Korea thanks to its low side effects, unlike other facial treatment products, including botulinum toxin (BTX) and fillers.

"In the case of fillers and BTX, side effects, including facial paralysis, are often reported. However, as Rejuran is a biocompatible material more than 95 percent similar to human genes, it is well absorbed and has few side effects," a dermatologist operating a clinic in Gangnam-gu, Seoul, told Korea Biomedical Review, asking to remain anonymous for business ethics.

The cosmetics division is contributing to PharmaResearch's growth. In the first quarter, the division generated sales of 13.9 billion won, up 56.4 percent compared to the same period last year.

The division is also expanding its global reach.

In addition to Ukraine, Singapore, Malaysia, and China, the company recently started selling the product in Thailand and plans to enter Latin America in the second half of this year.

Analysts raise price target

On the back of Rejuran's sales, PharmaResearch raised its 52-week price target on the stock to 147,000 won ($114) on June 29.

Although the stock dropped to 124,900 won on Friday, it has doubled since last October when it was trading below 60,000 won. Securities analysts also painted a rosy future for PharmaResearch.

In May, Shinhan Investment & Securities raised its price target for Pharmareserch from 98,000 won to 130,000 won, and eBest Investment & Securities raised its price target from 110,000 won to 140,000 won. Sangsangin Investment & Securities also raised its price target from 120,000 won to 150,000 won, and Daol Investment & Securities raised its price target from 120,000 won to 140,000 won.

Many analysts believe that PharmaResearch's revenue will exceed 200 billion won for the first time this year.

Shinhan Investment & Securities expects PharmaResearch's sales and operating profit to reach 239.4 billion won and 85.8 billion won in 2023, up 22.9 and 30.7 percent from 2022.

"We expect the company to achieve favorable results based on continued strong sales of Rejuran in countries like Thailand and Singapore and increased domestic demand," said Won Jae-hee, an analyst at Shinhan Investment & Securities.

Park Jong-hyun, a Daol Investment & Securities analyst, also forecasted that PharmaResearch's 2023 sales and operating profit would reach 245.6 billion won and 82.6 billion won, up 26 and 25 percent from last year.

"With the full-scale operation of Rejuran overseas, the relatively small share of overseas sales, which was a value discount factor for PharmaResearch, is being resolved," Park said. "We also expect an increase in cosmetics sales from medical tourism and duty-free sectors due to an increase in inbound tourists from China."

Park added that another positive factor is the recent acquisition of a stake in CTC Bio, a local pharmaceutical company, to diversify its business and secure new growth engines.