Kolon Life Science turns profit in chemicals biz, eyes '2nd Invossa'

After nearly two years of losses, Kolon Life Science has turned its fortunes around. The company attributes the turnaround to solid business performance in the chemical division since CEO Kim took office.

In addition, the company has reorganized its R&D pipeline and is accelerating the development of its post-Invossa pipeline.

Kolon Life Science posted consolidated sales of 44.8 billion won ($32 million) in the first quarter of this year, up 16.3 billion won from 38.6 billion won in the same period last year. Operating profit was 70 million won, turning into the black. The operating loss was 3.5 billion won in the same period last year. Net profit was 10.5 billion won, reflecting 13 billion won in insurance income from fire insurance claims.

Since taking over in 2023, CEO Kim has focused on boosting profitability and advancing Invossa’s clinical trials. The operating loss ratio, 18.2 percent in the first quarter of 2023, deepened to 25 percent in the third quarter of last year. Since then, the operating loss rate has decreased dramatically to 6.9 percent in the fourth quarter of last year, and the company returned to profitability for the first time with an operating margin of 0.2 percent in the first quarter.

The chemicals division's overseas APIs led the turnaround. Kolon Life Science's chemicals division conducts pharmaceutical business and functional materials business.

The pharmaceutical business supplies APIs and drug intermediates, while the functional materials business produces and supplies chemical materials, such as antibacterial agents. In particular, the pharmaceutical business targets the Japanese market, supplying loxoprofen to 30 local companies and the antibiotic API nadifloxacin to a Japanese generic company. In addition, it supplies pitavastatin, an API for treating hyperlipidemia, globally. The functional materials business supplies antibacterial preservatives,  including ingredients used in anti-dandruff shampoos, to P&G and other clients.

With the performance improvement, Kolon Life Science also focuses on developing new drugs after Invossa. The strategy is to target neuropathic pain and solid cancers based on the gene therapy drug development experience gained through Invossa.

KLS-2031, which targets neuropathic pain, received a final phase 1/2a report in the second quarter of last year. The company plans a follow-up clinical plan through nonclinical studies and additional efficacy trials to expand indications, such as diabetic peripheral neuropathy. KLS-3021, which targets solid tumors, has completed GLP toxicity studies and is undergoing distribution trials for clinical entry.

“The chemical division's turnaround is significant, especially amid rising costs and an economic downturn. Meanwhile, the bio division is actively developing new indications for its pipeline of cell and gene therapy products and presenting at academic conferences,” a company official said.