SK Biopharm Turns Profitable on the Success of 'Cenobamate'

Increase in New Patient Prescriptions in the US Market
Q4 Sales Last Year: 126.756 Billion KRW
Operating Profit: 15.214 Billion KRW

SK Biopharm succeeded in turning its operating profit positive last quarter, driven by strong sales of the epilepsy drug Cenobamate (U.S. brand name Xcopri), which received approval from the U.S. Food and Drug Administration (FDA).

Lee Dong-hoon, CEO of SK Biopharm, is giving a presentation at the JP Morgan Healthcare Conference held in San Francisco, California, USA, on the 9th (local time).
[Photo by SK Biopharm]

On the 29th, SK Biopharm announced that its fourth-quarter results last year showed sales of 126.756 billion KRW and an operating profit of 15.214 billion KRW, achieving a turnaround to operating profit.

This is not the first time SK Biopharm has achieved a quarterly profit. However, this performance is significant because it was achieved through continuous sales growth rather than technology exports. In the first quarter of 2021, there was a case of achieving a profit of 75.9 billion KRW through receiving a European approval milestone payment of 123.22 million USD (approximately 164.7 billion KRW) for Cenobamate, but during periods without milestones, the company fell back into losses, creating a vicious cycle. An SK Biopharm official stated, "The previous profit turnaround was due to one-time income such as licensing," and added, "The profit turnaround in the fourth quarter of last year is meaningful because it was achieved through sales growth."

However, on an annual basis, losses continued. SK Biopharm's results for last year were sales of 354.892 billion KRW and an operating loss of 37.09 billion KRW. Compared to 2022, sales grew by 44.2%, and operating losses decreased by 28.3%. The company explained, "There were increased costs due to the acquisition of SK Life Science Labs," but "despite this, sales growth of Cenobamate and cost efficiency improvements led to increased sales and reduced operating losses."

SK Biopharm's epilepsy treatment 'Cenobamate (US name: Xcopri)'
[Photo by SK Biopharm]

Last year, Cenobamate's U.S. sales, which led the performance improvement, reached 270.8 billion KRW, a 60.1% increase compared to 2022. Fourth-quarter sales were 77.7 billion KRW, growing 56.2% year-over-year. However, compared to the previous quarter, the sales growth rate was only 2.7%. SK Biopharm explained, "Although the trend of increasing prescriptions (TRx) was maintained in the fourth quarter, the lower sales growth rate compared to the previous quarter was due to suppressing excessive inventory increases by wholesalers at the end of last year, considering the largest drug price increase (6%) at the beginning of this year and the stable profit maintenance each quarter," adding, "From the first quarter of this year, this is expected to help maintain stable profits."

Last year, Cenobamate showed a continuous increase in new patient prescriptions (NBRx) in the U.S. market. In the 44th month since its launch, about 26,000 prescriptions were made last month. This is approximately 2.2 times the number of prescriptions at the same month for existing competing drugs. SK Biopharm aims to increase monthly prescriptions (TRx) to over 30,000 this year and achieve the number one position in drug prescriptions within this disease area. Additionally, it is conducting further clinical trials for indication expansion to generalized seizures and launches in China and Japan, including South Korea.

Notably, SK Biopharm is directly selling Cenobamate from development through approval. This approach results in a gross profit margin exceeding 90% in the U.S. market. SK Biopharm plans to introduce a ‘second commercialized product’ by 2025 that can fully utilize its direct sales infrastructure.

Lee Dong-hoon, CEO of SK Biopharm, stated at the JP Morgan Healthcare Conference held in the U.S. earlier this month, "We aim to become a top 50 global pharmaceutical company developing new drugs by 2029," and added, "To achieve this, we plan for Cenobamate’s U.S. sales to reach 1 billion USD (approximately 1.32 trillion KRW) annually, prepare the next product, and build direct sales capabilities to have all competencies from clinical development to production locally in the U.S."

Furthermore, the company’s strategy is to continue growth by focusing on three next-generation platforms as new growth engines: cell and gene therapy (CGT), radiopharmaceutical therapy (RPT), and targeted protein degradation (TPD).

TPD technology was secured by acquiring Proteovant Sciences, a joint venture established last year by SK Inc. and U.S.-based Roivant, which was renamed SK Life Science Labs. RPT also secured radioactive isotopes, the raw materials, through TerraPower, a nuclear venture company invested in by SK Inc. For CGT, SK Pharmteco, SK Inc.’s contract development and manufacturing organization (CDMO) subsidiary, has acquired CDMO capabilities through partnerships with France’s Iposketch and the U.S.’s CBM, aiming to create synergy through these resources.

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