Withus Pharm "Confident in Earnings Growth Beyond Profit Stability"

[Asia Economy Reporter Jang Hyowon] Withus Pharmaceutical (CEO Sung Daeyoung) is raising expectations for its performance through continuous sales growth, improvement of distribution structure, and securing bioequivalence-manufactured pharmaceuticals.

Withus Pharmaceutical, a corporation with a fiscal year ending in June, recently reported cumulative results for the past three quarters (July 2019 to March 2020) with sales of 38.2 billion KRW, operating profit of 6.73 billion KRW, and net profit of 5.28 billion KRW. Compared to the same period last year, sales and net profit grew by 5.6% and 1.6%, respectively, but operating profit slightly decreased by 1.7% due to increased bioequivalence costs classified as R&D and selling and administrative expenses.

A company official stated, “Despite the recent COVID-19 pandemic impact, sales growth is being maintained,” adding, “Although there are profit and loss fluctuations due to increased costs for improved new drug development and bioequivalence-related expenses, these are not mere costs but strategic investments driving the company’s mid- to long-term growth.”

Starting July this year, the differentiated reimbursement pricing system for generic drugs will be extensively reformed. Only products that have proven efficacy through self-conducted biological equivalence tests and have completed raw material verification using registered active pharmaceutical ingredients will receive the maximum price, while those failing to meet the criteria will face price reductions. This system will apply to new products from July, with a three-year grace period for previously registered pharmaceuticals.

In the case of Withus Pharmaceutical, not only has the company secured numerous bioequivalence-manufactured pharmaceutical items, but it also possesses special formulation production capabilities, making it expected to benefit. The company plans to take a step further from its current advantageous position compared to competitors by solidifying its status as a leading company through continuous R&D investment. It aims to expand the proportion of its bioequivalence products to about 90% of sales and plans to increase sales and market share in the future.

A Withus Pharmaceutical official said, “The company has maintained an operating profit margin of 20% since 2014 through formulation capabilities and maximizing distribution channel efficiency, which significantly exceeds the industry average of 7-10%,” and added, “As a policy-beneficiary company, we are not satisfied with the current situation and will achieve a quantum leap through expanded investment in our bioequivalence R&D.”

Meanwhile, Withus Pharmaceutical submitted a securities registration statement on the 27th of last month and is proceeding with the KOSDAQ listing process. The total number of shares offered is 1.6 million, with a desired price range of 13,900 to 15,900 KRW per share. The expected amount to be raised is 22.2 to 25.4 billion KRW. The public offering price will be finalized through demand forecasting on the 18th and 19th, and general subscription will be conducted on the 25th and 26th. The listing is scheduled for July, with NH Investment & Securities and Samsung Securities serving as lead underwriters.

This content was produced with the assistance of AI translation services.