Huons Group's Pangen Poised for Accelerated Performance Growth

Huons Group's Pangen has continued its growth this year, following its turnaround to profitability last year. The company is maintaining its momentum for performance expansion, with its biosimilar (biopharmaceutical generic drug) business and contract development and manufacturing organization (CDMO) business serving as its two main pillars.

◆ CDMO Business Based on GMP Facilities and Platform Technology = According to industry sources on July 22, Pangen is a biopharmaceutical company established in 1999 and listed on KOSDAQ in 2016. In 2011, it built a Good Manufacturing Practice (GMP) facility for biopharmaceutical production and succeeded in developing a biosimilar erythropoietin (EPO) product for anemia treatment. Pangen became the first in Korea to prove equivalence to the original product, Eprex, through comparative clinical trials, and received product approval from the Ministry of Food and Drug Safety in 2019, after which it has been producing and selling the product. Pangen has obtained GMP certification from the Korean regulatory authority and several member organizations of the Pharmaceutical Inspection Co-operation Scheme, enabling it to operate its biopharmaceutical CDMO business.

Pangen operates its biopharmaceutical CDMO service business based on its GMP facilities and proprietary technologies. The company possesses 'PanGen CHO-TECH,' a core platform technology required for biopharmaceutical CDMO, which is a protein expression technology specialized for CHO (Chinese Hamster Ovary) cells used in biopharmaceutical production. This includes cell line development technology and process development technology, which are foundational for biopharmaceutical development. Notably, Pangen has signed multiple technology transfer agreements utilizing the 'PanGen CHO-TECH' platform. As a result, it receives annual royalties, and these royalties are expected to increase further if the counterparties' sales grow in the future.

Image of Huons Group headquarters. Huons Group

In April, Pangen signed a CMO contract worth 1.9 billion KRW with CHA Vaccine Institute, which entrusted its own project’s CMO to Pangen. The contract development (CDO) service involves building high-performance recombinant CHO cell lines based on the platform technology and transferring production process technology needed for biopharmaceutical development. The contract manufacturing (CMO) service involves the entrusted production of preclinical, clinical trial, and commercial biopharmaceutical samples.

As of last year, combined CDMO sales from CMO and CDO increased by 144% year-on-year to 6.27 billion KRW. This accounted for 42.7% of Pangen's total sales, and a significant portion of this revenue came from the production and research sales of human-derived hyaluronidase being developed by Huons Lab, demonstrating Pangen's technological prowess. On a separate financial statement basis, Pangen recorded sales of 14.67 billion KRW last year, up 101% from the previous year. Operating profit reached 1.02 billion KRW, marking a turnaround to profitability. In the first quarter of this year, the company posted sales of 3.44 billion KRW and operating profit of 700 million KRW.

◆ EPO Biosimilar: Expanding Domestic and Overseas Approvals and Exports = Sales of Pangen's EPO biosimilar have also been steadily increasing, accounting for 38.5% of total sales last year. In 2024, exports to ASEAN countries such as Malaysia and the Philippines increased, and performance improved due to full-scale exports to Saudi Arabia and Turkiye.

Pangen produces its EPO biosimilar, an anemia treatment for chronic kidney disease patients, and sells it in Korea and multiple overseas countries. In January 2019, Pangen received approval for its EPO biosimilar from the National Pharmaceutical Regulatory Agency (NPRA) of Malaysia, where it is currently sold under the product name Erisa.

In Korea, the product is marketed as Panpotein, after receiving approval from the Ministry of Food and Drug Safety in November 2019, with sales beginning in February 2020. In 2023, the company obtained domestic approval for high-dose EPO products (6,000 IU and 10,000 IU) and began sales. The number of countries where the product is sold continues to increase, with product approvals obtained in the Philippines in 2022 and Saudi Arabia in 2023. In September 2023, Pangen also received product approval in Thailand.

In 2021, Pangen signed a technology transfer agreement worth 3 million USD for its EPO biosimilar with Turkish pharmaceutical company VEM. Since November 2023, Pangen has been supplying the Final Drug Substance (FDS) to VEM. To date, Pangen has received approval for its EPO biosimilar in a total of six countries and is selling the product in five countries. As of the first quarter of this year, EPO pharmaceutical exports increased by 57% year-on-year. Pangen expects that its EPO biosimilar will continue to expand its export markets to the Middle East and Africa, achieving sustained sales growth.

◆ Synergy Among Huons Group Affiliates Expected = As a biopharmaceutical specialist within Huons Group, Pangen has set a goal to enhance synergy among group affiliates. In February, the company signed an additional contract with Huons Lab for a process specialization research service worth 800 million KRW to obtain biopharmaceutical product approval. Pangen, as the production base for human-derived hyaluronidase being developed by Huons Lab, has already completed and supplied clinical samples and three batches of raw materials for approval purposes.

Going forward, Huons Lab plans to focus solely on research and development (R&D) without establishing its own active pharmaceutical ingredient (API) manufacturing facilities. Biopharmaceutical APIs will be produced by Pangen, while finished biopharmaceutical products will be manufactured by Huons Medix, with the goal of expanding globally. In May, Huons Lab completed the last-patient-in (LPI) for its domestic Phase 1 clinical trial of human-derived hyaluronidase.

Pangen CEO Yoon Jaeseung stated, "We expect to see a greater increase in performance through the revitalization of our core businesses. We will contribute to the activation of Huons Group's biopharmaceutical R&D and CDMO businesses, enhance synergy among group affiliates, and become a key pillar leading the global healthcare market."