JW Pharmaceutical’s Q2 revenue fell 7% on year to ₩170.7 bil.

JW Pharmaceutical released its preliminary results for the second quarter on Thursday, reporting sales of 170.7 billion won ($124.5 million) based on separate financial statements, down 7 percent from a year ago.

Operating profit for the second quarter was 12.5 billion won, down 44.9 percent from 22.7 billion won in the same period last year. Net profit was 9.2 billion won, down 45.7 percent from 16.9 billion won in the second quarter of last year.

JW Pharmaceutical's sales in the specialty pharmaceuticals segment decreased 4.4 percent year-on-year to 137.9 billion won in the second quarter. The OTC and export segments generated sales of 14.4 billion won 2.2 billion won, down 1.6 percent and 66.4 percent year-on-year.

According to the company, the decline in the second quarter was due to one-time factors despite the sales growth of original drugs, including Livalo-LivaloZet, Hemlibra, and Actemra.

In detail, a significant increase in Hemlibra's risk-sharing agreement (RSA) refunding in the second quarter contributed to the decline in sales and operating profit. The company said the second and third quarters’ refund was reflected in advance, creating an additional burden. It plans to apply only the next quarter's payments to future results.

Besides, as the high-dose iron injectable Ferrinject got coverage by health insurance in May, the difference in compensation for market inventory (sales reduction) was also reflected in the second quarter. It will be recognized as normal revenue from the third quarter, JW Pharmaceutical said.

JW Pharmaceutical said that exports of basic infusion drugs as essential inpatient medicines were somewhat sluggish, and an increase in ordinary research and development expenses also contributed to the decline in operating profit.

"Although one-time factors negatively impacted our performance in the second quarter, we expect our performance to recover with continued sales growth of original drugs," a JW Pharmaceutical official said. "The increase in R&D expenses is also an investment for long-term growth and innovation, which will lead to positive results in the future."