[Asia Exclusive] Seung-ho Jeon, CEO of Daewoong Pharmaceutical, "Visible R&D Achievements... Double Sales and Triple Market Cap Within 3 Years"

Achieving Both Performance and Stock Price
Focusing on Developing World-Class Innovative Drugs
Such as Fibrosis and Autoimmune Disease Treatments

'Pexuprazan' Cumulative Technology Export Exceeds 1 Trillion Won
Diabetes Drug Inavogliflozin
Possesses Excellent Efficacy and Safety

Direct Operation of Local Subsidiaries Beyond Approval
Most Active Investment Among Indonesian Overseas Subsidiaries

[Interview by Youngjoo Cho, Head of the 4th Industrial Department; Summary by Sojung Seo] "We will double Daewoong Pharmaceutical's sales within the next three years to achieve 2 trillion KRW."

Seungho Jeon, President of Daewoong Pharmaceutical (46), recently expressed confidence in an interview with Asia Economy at Daewoong Pharmaceutical’s headquarters on Bongeunsa-ro, Gangnam-gu, Seoul, stating that from this year onward, the results of research and development (R&D) will become visible, allowing the company to capture both performance and stock price growth. Jeon attracted attention in the pharmaceutical industry when he was surprisingly appointed as the new CEO in his early 40s in 2018. This marked a generational shift as a professional manager, not from the founding family, took the helm for the first time in the company’s 73-year history. He was reappointed as CEO in March and is leading changes at Daewoong Pharmaceutical.

He stated, "Last year’s sales were 1.0554 trillion KRW, but we plan to increase that to over 2 trillion KRW within the next three years," adding, "I also want to triple the market capitalization, which is currently in the high 1 trillion KRW range, within three years." He explained that the R&D sector, which has been receiving increased investment, will bear fruit this year and serve as the foundation for becoming a global company.

Jeon said, "In the second quarter and the second half of the year, we expect to show good performance through balanced growth in prescription and over-the-counter drugs, as well as increased global exports led by Nabota," emphasizing, "We will focus on developing world-class innovative new drugs (First-in-Class) such as fibrosis treatments and autoimmune disease therapies to become a global pharmaceutical company."

- Recently, the company’s self-developed gastroesophageal reflux disease (GERD) new drug ‘Pexuprazan’ was licensed out to the U.S.

▲ Daewoong Pharmaceutical signed a licensing agreement for Pexuprazan with U.S.-based Neurogastrx. The total contract amount, including milestone payments based on phased successes, is up to $430 million (approximately 480 billion KRW). As part of the deal, Daewoong Pharmaceutical secured a 5% stake in Neurogastrx, and if the partner company succeeds in an initial public offering (IPO), Daewoong could increase its stake to up to 13.5%. Including previous contracts in China, Brazil, and Mexico, the cumulative licensing revenue for Pexuprazan has surpassed 1 trillion KRW. Neurogastrx plans to start Phase 3 clinical trials for Pexuprazan in the U.S. next year and subsequently apply for FDA approval. In Korea, Phase 3 trials have been completed, and approval from the Ministry of Food and Drug Safety (MFDS) is pending. If approved, it will become the 34th domestically developed new drug. Initially, there were concerns because many GERD treatments already exist and the pharmaceutical industry mainly focuses on anticancer and autoimmune disease drugs. However, after development, it proved to be a true new drug. Pexuprazan offers faster and longer-lasting effects compared to existing treatments. Given the large market size, rapid growth is expected once it is launched domestically.

- The diabetes drug ‘Inavogliflozin’ is also attracting attention as a promising candidate.

▲ Beyond gastroenterology, diabetes is one of Daewoong Pharmaceutical’s strongest fields. Inavogliflozin, an SGLT-2 inhibitor being developed as a treatment for type 2 diabetes, shows superior efficacy and safety compared to existing marketed drugs. The company is accelerating R&D with the goal of domestic launch in 2023. In clinical Phase 2 trials involving Korean patients with type 2 diabetes, Inavogliflozin demonstrated excellent blood sugar-lowering effects by reducing glycated hemoglobin (HbA1c) and achieving blood sugar control rates. Phase 3 trials are currently underway for monotherapy, combination therapy with metformin, and triple therapy with metformin and DPP-4 inhibitors. Once Daewoong completes clinical trials and regulatory approval, it will be the first domestically launched SGLT-2 inhibitor diabetes drug in Korea. Entering a market long dominated by multinational pharmaceutical companies, Inavogliflozin, along with Pexuprazan, will be a key product for global expansion.

- Are there specific areas you plan to focus on going forward?

▲ We are committed to developing world-first innovative new drugs such as fibrosis treatments and autoimmune disease therapies. The field of idiopathic pulmonary fibrosis (IPF) treatment has a large unmet need and significant global demand. IPF is a disease where fibroblasts excessively proliferate during an unknown cause of lung inflammation, causing fibrosis of lung tissue and gradual stiffening of the lungs. Currently, only two drugs are available for this disease, and we are developing a drug with a completely different mechanism of action from existing treatments. Phase 1 clinical trials were conducted in Australia, and we aim to start Phase 2 trials in the U.S. and Korea this year. Discussions with major overseas pharmaceutical companies have begun, and exports are expected. Separately, we plan to conduct Phase 3 clinical trials independently. Additionally, two candidate drugs with dual mechanisms for severe autoimmune diseases are scheduled to begin Phase 1 trials in the second half of this year and the first half of next year, respectively. We are also advancing anticancer drug research. Currently, three programs are underway targeting liver cancer and rare cancers: targeted anticancer drugs, metabolism-regulating immuno-oncology drugs, and AI-based protein-protein interaction modulating anticancer drugs. These are being developed in collaboration with U.S.-based anticancer drug specialist company A2A. We are currently identifying lead compounds and plan to select candidate drugs by the first half of next year, accelerating development in the anticancer field as well.

- The pancreatic cancer drug ‘Hoistart’ is being developed as a COVID-19 treatment. However, Phase 2a trials did not achieve statistical significance.

▲ Recently, dosing for the ongoing Phase 2b trial involving about 300 patients has been completed. We will observe patients for a certain period and then begin analyzing the clinical trial data. If positive results are confirmed, we aim to apply for conditional approval within the third quarter and simultaneously proceed with Phase 3 trials sequentially.

- Daewoong Pharmaceutical has eight overseas subsidiaries including in Indonesia, the U.S., and China. Localization strategies are active; can you elaborate?

▲ Beyond licensing and regulatory approvals, Daewoong Pharmaceutical directly operates subsidiaries overseas, conducting technology exports and R&D. Indonesia is the most actively invested country among our overseas subsidiaries. Currently, three local clinical trials are planned or underway: camostat, niclosamide, and stem cell therapies for COVID-19. We are also planning to establish a stem cell production facility. We are expanding local sales of biopharmaceuticals such as Epodion and EGF and preparing to enter the Middle Eastern market with halal-certified products from Indonesia.

- The agreement between U.S. partner Ion Biopharma and Medytox regarding ‘botulinum toxin’ is seen as resolving some obstacles.

▲ Unlike the domestic market, the global botulinum toxin market has a larger therapeutic segment than the aesthetic segment, with continuous development of new indications, showing high growth potential. The U.S. toxin therapeutic market is about twice the size of the aesthetic market and grows annually by more than 9%. Ion Biopharma, our partner, is conducting Phase 2 trials for cervical dystonia and migraine. Apart from Allergan, there are no clear competitors in the U.S. toxin therapeutic market, so Ion Biopharma is expected to secure a high market share upon entry.

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