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Korean drugmakers’ Q1 earnings rose despite Covid-19
  • By Jeong Sae-im
  • Published 2020.05.01 14:45
  • Updated 2020.05.01 14:45
  • comments 0

Leading domestic pharmaceutical companies recorded robust earnings in the first quarter despite the new coronavirus outbreak, industry data showed.

According to each company’s public disclosure as of Thursday, GC Pharma, Hanmi Pharmaceutical, Chong Kun Dang, and Dong-A ST achieved improved earnings in the first three months, compared to a year earlier.

However, Yuhan Corp. suffered a decline due to reduced sales of prescription drugs and shipments.

GC Pharma’s first-quarter revenue went up 8.6 percent to 307.8 billion won ($252.4 million), and operating profit jumped 283.9 percent to 6.1 billion won, according to the company’s consolidated financial statement.

The company attributed the robust sales growth to a 22.9 percent year-on-year increase in exports of chickenpox vaccines and flu vaccines. Expansion of exports pushed up commissions and advertising expenses, but profitability improved significantly.

In the domestic sector, the company’s consumer healthcare (CHC) pulled off a 64 percent rise in sales.

GC Pharma recorded 3.9 billion net loss, turning to red from black compared to a year earlier. However, the company could reduce the loss from 23.9 billion won loss in the fourth quarter last year, by excluding the loss-making blood bag business from the financial statement.

Hanmi Pharmaceutical’s consolidated first-quarter sales climbed 4.9 percent on-year to 288.2 billion won, and operating profit, 10.8 percent to 28.7 billion won. Although its subsidiary in Beijing had a 6.5 percent drop in sales due to difficulty in marketing in China amid the Covid-19 outbreak, the company was able to expand the total sales.

According to UBIST data, Hanmi’s leading prescription drugs, including Amorsartan family drugs, Rosuzet, and Esomezol achieved two-digit sales growth.

However, the company’s net profit went down by 33.4 percent to 11.5 billion won in the first quarter from 17.3 billion won a year earlier. The decline resulted from a cut in the company’s stake evaluation in a firm Hanmi had invested.

Chong Kun Dang posted an earnings surprise on Wednesday, with sales increasing 25.2 percent on-year to 292.8 billion won and operating profit, 56.2 percent to 26.1 billion won.

The Covid-19 crisis somewhat helped the company sell long-term medicines for chronic diseases and cut marketing expenses amid reduced in-person sales activities. About 50 percent of Chong Kun Dang sales come from drugs for chronic diseases.

The company’s solid earnings also resulted from co-promotion activities for other companies’ popular medicines. Chong Kun Dang promotes obesity treatment Qsymia and stomach medicine K-Cab. In just two months after the market release in January, Qsymia ranked fourth in prescription drug sales in Korea. K-Cab, which sold about 30 billion won in the first year of the release, also enjoyed a rise in prescriptions. K-Cab sold 14.5 billion won in the first quarter.

Dong-A ST’s sales went up 41.1 percent on-year to 201.2 billion won in the first quarter, as some rival drugs faced the regulator’s sales suspension. Operating profit jumped 158.5 percent to 53 billion won, and net profit, 109.6 percent to 46.8 billion won.

Despite the Covid-19 pandemic, the company’s overseas revenue also increased. The company’s primary products, except for human growth hormone Growthtropin, had an expansion in exports. Sales of energy drink Bacchus, which sells more overseas than in the domestic market, rose 11.9 percent thanks to 23.6 billion won sales from export in the first quarter.

Dong-A ST’s prescription drug sales jumped 82.4 percent to 137.2 billion won as the company sold drugs three months in advance. Recently, the Ministry of Food and Drug Safety ordered the company to suspend sales of 97 medications for three months because the company violated the Pharmaceutical Affairs Act. The sales suspension was set from Feb. 28 to May 27. To continue the drug supply during the suspension, the company had sold products to distributors three months in advance.

Yuhan Corp. was the only major drugmaker that suffered a decline in earnings. The Covid-19 outbreak hit the firm’s sales of prescription drugs and exports.

The company’s consolidated revenue in the third quarter dropped 9.2 percent to 313.3 billion won, and operating profit nosedived 82.4 percent to 1.1 billion won. However, net profit shot up 636.7 percent to 125.2 billion won, as the selling of a plant in Gunpo, Gyeonggi Province, worth 132.8 billion won has been reflected in the financial statement.

Yuhan’s revenue of prescription drugs, which is the company’s main business, went down 13.3 percent on-year to 193.7 billion won in the first quarter. Sales of Viread, in particular, which accounts for a significant portion of the overall sales, slid 31.1 percent to 20.7 billion won. The revenue of HIV drug Genvoya and dyslipidemia Atorva decreased 56.3 percent and 61.8 percent, respectively.

The company could avoid an operating loss, as a partial upfront payment of 16.9 billion won in a licensing deal was reflected in the first-quarter financial statement.

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