Korea’s large pharmaceutical companies are expected to have yielded good earnings in the third quarter, analysts said. Local drugmakers will begin to announce their quarterly performances, starting from Samsung BioLogics on Wednesday this week.
Yuhan Corp., which had unsatisfying earnings in the first quarter, will receive royalties from a licensing-out deal in the third quarter. Brokerages forecast that the company’s operating income in the third quarter is expected to surge to around 11.5 billion won ($9.7 million), compared to 200 million won a year earlier.
Yuhan is expecting to get royalties reaching nearly 10 billion won. Five billion won will come from Gilead Sciences and Boehringer Ingelheim, and 4 billion won from a deal with Janssen that was relayed from the second quarter to the third quarter.
In the prescription drug sector, Yuhan will continue to suffer sales declines of the medicines that it imported from multinational firms. Sales of Viread, Trajenta, and Twynsta slid due to the release of generic drugs in the first half. This trend is continuing in the third quarter.
However, it is positive for Yuhan that its incrementally modified drugs (IMD) such as Rosuvamibe and Duowell are seeing a gradual increase in sales. Through Addpharma, an IMD specializing subsidiary, the company plans to roll out IMDs, which will drive up prescription drug sales.
In contrast to Yuhan’s case, Hanmi Pharmaceutical is to suffer from discontinuation of royalties. The 9 billion won royalty that it received every quarter has ended as of the second quarter.
Still, Hanmi is expected to offset the blow by strong local sales. Amosartan family, hyperlipidemia treatment, and one of Hanmi’s representative drugs, is showing a robust sales growth this year.
Securities firms offered mixed outlooks for Hanmi’s third-quarter earnings. Hana Financial Investment said Hanmi’s operating profit would drop 14 percent on-year to 18.4 billion won in the third quarter.
However, Shinhan Financial Investment said its operating profit would inch up by 0.4 percent to 21.6 billion won, on the back of the smooth sales of the hyperlipidemia drug and the growth of the Chinese subsidiary.
Daewoong Pharmaceutical will enjoy the effect of the export of botulinum toxin Nabota in the third quarter. With the shipments of Nabota to the U.S., the total sales of Nabota recorded 18.6 billion won in the second quarter.
One problem that Daewoong is facing is the astronomical cost of the litigation against Medytox over the origin of the BTX strain. The litigation cost is expected to more than double in the third quarter from 4 billion won in the second quarter.
Daewoong, which had been expected to enjoy the best annual earnings this year with an excellent performance in the first half, faced a sudden obstacle due to an unexpected recall of ranitidine drugs. Albis, the flagship product of Daewoong, is a ranitidine medicine. The aftermath of ranitidine recall is expected to be reflected in fourth-quarter earnings.
GC will likely have substantial earnings. Although it will have an impact from the return of insulin sales rights to Novo Nordisk in January through the third quarter, other medicines and an increase in exports will help grow the total revenue, analysts said.
GC’s sales of blood products from the largest division are likely to go up 5.2 percent to reach 80 billion won. The export of influenza vaccines seems to have rebounded, which led the operating profit to increase about 4 to 9 percent on-year in the third quarter, analysts said.
Chong Kun Dang will have higher anticipation for hitting 1 trillion won sales this year, thanks to strong third-quarter earnings. The company will benefit from the growth of K-Cab, the blockbuster drug and the nation’s 30th novel medicine.
Analysts expected that Chong Kun Dang would see a two-digit growth in sales in the third quarter. Sales of Eso Duo, an IMD by Chong Kun Dang that arrived in the market in July last year, have rapidly expanded this year.
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