ST Pharm reported a strong second-quarter performance on Wednesday, driven by robust growth in its new drug contract development and manufacturing organization (CDMO) business.

The company posted revenue of 68.2 billion won ($49.7 million) in the second quarter, up 52.8 percent compared to the same period last year. Operating profit reached 12.8 billion won, turning positive from a year-earlier loss. Net income soared 420.7 percent year-on-year to 4.7 billion won.

The company attributed the strong growth to increased shipments of high-margin products in its CDMO portfolio, particularly in the oligonucleotide segment, which doubled in sales compared to the same period last year.

Oligonucleotide-related revenue rose 83 percent to 43.5 billion won, contributing significantly to improved cost efficiency and an operating margin of 18.8 percent.

Products driving oligonucleotide revenue included a hyperlipidemia treatment (9 billion won), a blood cancer therapy (22 billion won), and a spinal muscular atrophy treatment (6.1 billion won), alongside 2.3 billion won from facility usage fees.

ST Pharm said its revenue was weighted toward the second quarter this year, and it expects a similar trend in the second half. Notably, shipments of key oligonucleotide items are expected to be concentrated in the fourth quarter.

“The outlook may be revised upward depending on foreign exchange trends in the second half,” a company officials said. “We have completed discussions for eight new CDMO contracts this year and are in active talks for 17 more.”

As of the end of June, ST Pharm's total order backlog stood at approximately 320 billion won for oligonucleotides and 55 billion won for small-molecule APIs. Small-molecule revenue in the second quarter totaled 6.7 billion won, with 4.3 billion won coming from a mitochondrial deficiency syndrome project.

Revenue from clinical research organization (CRO) services also improved, thanks to increased orders. The company narrowed operating losses in this segment through cost reduction and operational efficiencies.

Looking ahead, ST Pharm expects U.S. FDA approval in August for an oligonucleotide CDMO project involving a treatment for hereditary angioedema. The company also anticipates phase 3 clinical results this year for an expanded indication of a rare cardiovascular disease drug in its pipeline.

ST Pharm has begun clinical batch production at its second oligonucleotide facility this month, with commercial-scale manufacturing slated to start in October. As a result, quarterly depreciation expenses for the facility, estimated at 1.5 to 2 billion won, are expected to be recognized earlier than planned.

The company also highlighted its in-house HIV treatment candidate, STP-0404, which is currently undergoing a global phase 2 clinical trial. Interim results are expected within the third quarter, with more detailed efficacy data to be presented at an international conference in October.

Despite these developments, ST Pharm noted that its full-year bottom line may remain slightly in the red, although it sees signs of demand recovery amid easing monetary policy in Korea and Europe.