Older Koreans are familiar with Yuyu Pharma and its flagship vitamin supplements, such as Yupan-C and Venapollo. Not many, however, know much further about this drug maker with 78 years of history. The pharmaceutical company’s yearly sales have so far failed to reach the 100-billion won ($84 million) landmark, placing it at the 53rd notch in industry rankings.
It is against this backdrop that Yu Won-sang took the CEO’s post of Yuyu Pharma last month. As a third-generation manager, Yu’s objective is to make a new Yuyu by inheriting good traditions set by his grandfather and father and instilling new vigor into the old company.
|Yuyu Pharma CEO Yu Won-sang talks about his company's future goals in an interview with Korea Biomedical Review at the company's headquarters in Yaksu-dong, Seoul, on Wednesday.|
“I will change the company's business platform from marketing generics locally to licensing out newly developed drugs to the global market,” Yu said in an interview with Korea Biomedical Review on Wednesday.
What’s important is how to develop good new drugs and export them, Yu said, adding that sales will come naturally as a result.
Yu, 45, earned his MBA from Columbia University, N.Y., in 2004, and worked at U.S. investment banks, including Merrill Lynch. During that time, Yu also worked for KBS, Korea's public broadcaster, as a financial reporter covering the U.S. stock market.
He decided to do something that can directly impact the lives of the public and changed his career path to work in the pharmaceutical industry after joining Novartis in 2004 as a sales representative in New York. Yu also worked as the training and sales force effectiveness (SFE) manager at Novartis Korea and its Asia-Pacific headquarters based in Singapore before joining the family business in 2009.
"When I first started working for the company, Yuyu had a long history and was well known to the public, but its business was mainly focused on generics, which did not match the global pharmaceutical trend of developing new drugs," Yu said. "My father, who is now the president of Yuyu, had operated the company according to systems and rules. Such management patterns were prevalent at the time as the pharmaceutical industry was very conservative,” Yu said.
However, Yu believed that the future of his business was in developing new drugs.
"After discussing such goals with my father, I used my ideas and experience to transform the company into research and development-focused one," Yu said. "The first thing I noticed was talented workers who are in the business of developing drugs want to work in a free and friendly corporate environment."
To make the company more attractable to future employees, Yu made a drastic decision to break away from the former strict corporate culture and started to adopt a more startup-like culture.
"I regularly compare Yuyu to a 78-year-old startup," Yu said. "We plan to keep doing what we are good at, but also start afresh by being open to innovative technologies and ideas that were difficult to have in a strict corporate culture."
As part of this plan, Yu has already shifted many of his decision-making authority to relevant departments inside the company.
"To develop new drugs, there are many decisions to be made, and I believe that it is the CEO's job to make such decisions by running around on his own to secure a development model," Yu said. "As I was traveling the world to speed up the development of the company's future pipeline, I found I could not be at the company to make decisions that were important for the company's other businesses."
Although such absence was a problem in the beginning as most local pharmaceutical companies had run a tight ship where every decision had to go through the CEO or President, Yu was able to entrust trust and responsibility to his employees.
"My work ethics is 'delegation of work,' and I have transferred decision-making authorities to the relevant departments and have given them full responsibility," he said.
Under Yu's leadership, the company is already making headway in developing two drugs -- YY201, and YuYu Dry Eye Program (YDE).
YY-201 is a combination of prostatitis enlargement drug Dutasteride and erectile dysfunction drug Tadalafil, which treats benign prostatic hypertrophy (BPH) while reducing side effects such as erectile dysfunction. Yuyu has developed a soft capsule-type, which is one-third in size compared to conventional Dutasteride treatments by using its formulation technology and has managed to combine it with Tadalafil.
The company is currently conducting local phase 3 clinical trials while working on establishing its global development strategy.
YDE, a dry eye treatment, is in a preclinical stage, and the company said it confirmed that compared with existing drugs, YDE showed the superior healing effect of corneal epithelial cell and improved tear secretion thanks to its excellent anti-inflammation mechanism.
While Yuyu plans to license out both drugs, Yu stresses that they are not in a hurry as they want to do it right.
"When I worked for KBS I learned that a company could not hype up its product without any evidence to support such success," Yu said. "Therefore, to reach our goals, the company has to first research the drug to a point where it can become desirable for other pharmaceutical companies to invest."
Most companies focus on licensing out their product as soon as possible, but Yuyu company believes that for its new drug substance to reach a desirable stage to multinational pharmaceutical companies, it still needs to research the drug for one or two more years, he added.
Yu stressed that such certainty is what a lot of small to midsize companies are missing.
"This is a point that I would like to stress as there are many programs that various companies are doing, but in reality, no multinational pharma companies are interested in buying the program," Yu said. "This is either because researches might have already been conducted in a similar way or they are not interesting as the companies advertise it to be."
To resolve this issue, Yu personally asked multinational pharma companies from the beginning if they may be interested in licensing in its programs.
"The feedback I received proved that multinational pharma companies are interested in the field of research that Yuyu is currently conducting," he said. "Currently, however, the research is not at a phase where it is interesting enough for international giants to spend money on,” Yu said, emphasizing he wants to work with global partners to further accelerate the process.
"To conduct R&D more efficiently, it is necessary to have a partnership with various researchers," Yu said. "Since Korea is still generic-focused, there are not many people who have experience developing new drugs."
However, developing a new drug does not necessarily have to be done only with Korean researchers, he added. The company has been talking with various researchers in the U.S., Europe, India, China, and other countries.
Yu also noted that unlike other local companies only focusing on licensing out its products, the company is interested in licensing in candidate substances from other companies.
"We are also interested in licensing in programs from foreign companies," he said. "Companies don't have to only focus on licensing their programs to big pharma companies," he said. “If the substance matches our company's goal, we can bring the substance into Korea and take the lead in developing it further.”
Yu said the company would focus on the soft jell capsules, in the short term, to capitalize on its traditional strength.
"Our current competitiveness in the global market comes from soft capsules," Yu said. "There are not many companies in the world that are good at manufacturing soft capsules anymore as it is not most common formulation."
However, it's still a niche market that no big company is good at, and Yuyu can take such opportunity and become a global player in the international market, he added.
Yuyu also plans on advertising such strengths along with its drug substances currently in development at various international conferences such as BIO International and BIO EU this year.
"Also, for companies who are looking for a distribution partner in Korea, I would like to suggest Yuyu as we have a long history in distribution," he said. "Our management team also understands the need of U.S. and European companies but also is familiar with the Korean regulation and market."
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