[IPO] Korea Pharma "Will Leap Forward with Original New Drug Introduction + CMO Business Expansion"

[Asia Economy Reporter Jang Hyowon] Korea Pharma, a prescription drug (ETC) manufacturing company, is knocking on the door of KOSDAQ. Korea Pharma plans to expand its business into foreign original new drug imports, improved new drug development, and contract manufacturing organization (CMO) sectors, leveraging the stable growth of its specialized products.

Eunhee Park, CEO of Korea Pharma.

On the 21st, Park Eunhee, CEO of Korea Pharma, held a press conference in Yeouido, Seoul, stating, “Korea Pharma has specialized in the field of psychiatric and neurological prescription drugs and established a leading position,” and added, “Through listing on KOSDAQ, we will take a step closer to becoming a global pharmaceutical company, expand our business areas, and continue sustainable growth.”

Founded in 1974, Korea Pharma mainly operates in the psychiatric and neurological prescription drug business. Its main businesses are divided into the prescription drug sector and the contract manufacturing organization (CMO) sector. The prescription drug sector accounted for 80% of total sales as of last year.

In prescription drugs, Korea Pharma holds specialized products in psychiatric and neurological, digestive, and circulatory systems. The psychiatric and neurological products include a total of 38 items such as schizophrenia treatments, antidepressants, anxiolytics, dementia treatments, and ADHD treatments. The company holds approximately 157 prescription drug items in total, including 32 digestive system products, 15 circulatory system products, 12 antibiotics and antimicrobials, and 60 other prescription drugs.

The CMO business sector, which accounts for 20% of total sales, mainly produces psychiatric and neurological and circulatory system drugs. This strategy is based on the competitiveness of specialized product groups, building product reliability and recognition to attract long-term customers, thereby driving an increase in linked sales of various generic drugs.

Korea Pharma’s production facilities have also been modernized. The company’s Hyangnam plant has obtained European Union Good Manufacturing Practice (EU GMP) certification for external solutions and lotions. Among the approximately 400 domestic companies equipped with pharmaceutical manufacturing facilities, only a few can manufacture through dedicated external solution facilities. As a result, Korea Pharma is currently trading with about 50 domestic and international companies.

Over the past three years (2017?2019), Korea Pharma has launched a total of 32 new generic products, accounting for 10% of last year’s sales. The company plans to introduce an additional 21 new products by 2021 and expects performance improvements from the time sales begin.

Korea Pharma’s growth strategy focuses on importing original new drugs from foreign pharmaceutical companies and expanding the CMO business. Since 2015, Korea Pharma has started importing original new drugs from foreign pharmaceutical companies. In 2017, it sold Mundipharma’s ADHD treatment Bispetin controlled-release capsules, and last year, it signed exclusive sales contracts for ‘Sandoz Olanzapine’ and ‘1L bowel cleansing agent Inplenbusan,’ with sales continuing until 2033.

In January this year, Korea Pharma imported the bronchial asthma treatment ‘Flutiform inhaler’ from Korea Mundipharma and is supplying it smoothly. The company’s strategy is to increase sales by importing original new drugs in the psychiatric and neurological and digestive system fields based on its know-how in importing various original new drugs and manufacturing capabilities.

Growth in the company’s CMO business sector is also expected. To meet the increasingly diverse and detailed needs of clients, the company has secured a new factory site. Additionally, it plans to add liquid and powder formulations to its production items to gain an advantage over competitors and aim for sales growth.

Korea Pharma recorded sales of 66.1 billion KRW, operating profit of 7.2 billion KRW, and net profit of 5.5 billion KRW last year. Compared to the previous year, sales increased by 9.3%, operating profit by 27.3%, and net profit by 44.44%.

In the first quarter of this year, sales were 16.6 billion KRW, operating profit 1.1 billion KRW, and net profit 700 million KRW. It was explained that operating profit and net profit temporarily slowed due to 1.3 billion KRW in regular research and development expenses concentrated in the first quarter for new product clinical trials.

CEO Park said, “As a result of steady preparation to drive the company’s mid- to long-term growth, visible achievements are ahead, with 11 new products scheduled for release this year and 10 next year,” adding, “After listing on KOSDAQ, we will do our best to continue the growth trend by actively investing in facilities to expand production capacity and discovering new products through research investment.”

Korea Pharma’s total number of shares offered in this public offering is 3,243,000 shares, with a desired price range of 6,500 to 8,500 KRW per share. The offering size is between 10.9 billion and 14.3 billion KRW. The proceeds will mainly be used for facility investment and production plant expansion to secure high value-added product groups, with the remainder planned for operating funds.

Meanwhile, Korea Pharma will finalize the public offering price through demand forecasting on the 22nd and 23rd and conduct the general public subscription on the 29th and 30th. The listing is scheduled for August, with Mirae Asset Daewoo as the lead underwriter.

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