HK inno.N is expanding its GLP-1 receptor agonist pipeline into type 2 diabetes, kicking off a second phase 3 trial in Korea for ecnoglutide just months after starting one in obesity.

The move comes as the company reported second-quarter earnings showing strong prescription drug growth but a drop in profit due to a beverage recall.

The Ministry of Food and Drug Safety cleared the diabetes study on Monday. It will test ecnoglutide in patients whose blood sugar remains uncontrolled despite lifestyle changes, with weekly subcutaneous injections compared to placebo.

The drug, licensed from China’s Sciwind Biosciences last year, is already being tested in a separate phase 3 trial for obesity, after Korea’s drug agency cleared it for clinical study in May.

HK inno.N is betting on dual potential. Ecnoglutide showed superior weight loss versus liraglutide, the drug sold by Novo Nordisk as Saxenda among others, in phase 2 trials with a favorable safety profile. 

The company says its mechanism of action -- as a GLP-1 receptor agonist promoting insulin and suppressing glucagon -- supports its transition into diabetes, the class's original target.

The development push comes as the company reported a mixed second quarter. Revenue rose 20 percent year over year to 263.1 billion won ($189 million), driven by a 25.5 percent jump in prescription drug sales.

But operating profit dropped nearly 20 percent to 19.5 billion won ($14 million), and net income fell 31 percent to 12 billion won after a sterilization issue at a third-party site triggered a recall in its health and beauty (H&B) division.

The company’s prescription portfolio was led by reflux drug K-CAB (tegoprazan), which posted 53.3 billion won in domestic sales and doubled export revenue. IV fluids grew 16.6 percent to 33.9 billion won, while diabetes and renal drugs fell 18 percent to 27.2 billion won after the company lost its marketing rights to Forxiga (dapagliflozin).

The H&B division pulled in 20 billion won, down more than 20 percent, swinging to an operating loss of 1.7 billion won.