Daewoong Bio, whose flagship products include choline alfoscerates, is entering the health-functional food business.

Industry executives watch with interest whether the company could find a new path, overcoming the crisis caused by reduced health insurance benefits for choline alfoscerates.

Daewoong Bio said Wednesday it is entering the health functional food market.

Explaining the background of its entry into the health functional food business, the company said it would discover new cash cows. As a differentiation strategy, it also announced its goal to achieve 100 billion won ($74.6 million) in sales within three years by launching new products based on clinical evidence.

Daewoong Bio added that the company would operate separately from its parent company, Daewoong Pharmaceutical, which is already in the health functional food business by selling multivitamin nutraceuticals, such as Impactamin Tab.

The company's entry into the new business is not unrelated to the reduction in the insurance benefits for choline preparations. In 2020, the Ministry of Health and Welfare and the Health Insurance Review and Assessment Service decided to reduce the reimbursement range of choline preparations through a reassessment of reimbursement adequacy, and the pharmaceutical industry, including Daewoong Bio, has been engaged in a legal battle with the government.

Hit hardest will be Daewoong Bio's choline drug Gliatamin, which generated 106.1 billion won in sales last year to emerge as the largest prescription volume among products with the same ingredients. The company's sales will suffer the most if the case is concluded with a lowered reimbursement.

Daewoong Bio plans to launch a brain health functional food product next month. The company says it will showcase its technology and know-how in the central nervous system. It did not disclose specific product information and plans to introduce the product at a symposium to be held next month.

According to sources, brain-related functions currently recognized by the Ministry of Food and Drug Safety include “memory improvement” and “cognitive improvement.” In the first category, omega 3 (maintaining EPA and DHA content), ginkgo biloba extract, and red ginseng are registered as notified functional ingredients, while phosphatidylserine is one of the

According to the MFDS and the National Institute for Food and Drug Safety, the total sales of memory-improving health-functional foods were 1.28 trillion won ($1,811 million) last year, ranking second in sales after blood circulation improvement.

Meanwhile, Daewoong Bio will hold a product launching workshop, "ONLY ONE," at the JW Marriott Hotel in Seocho-gu, Seoul, on Oct. 13 regarding its entry into the health-functional food business. Doctors, pharmacists, and influencers, including Daewoong Bio CEO Jin Sung-gon, will attend the event, featuring expert lectures and product introduction.