Despite Increased Losses, Bukwang Pharm Boosts R&D... Lee Woo-hyun: "No Decision Yet on Hanmi Integration Impact"

Bukwang Pharmaceutical recorded sales of 125.9 billion KRW and an operating loss of 36.4 billion KRW last year. Amid declining sales and an expanding operating loss, the company stated that the "sales decrease is due to management improvement measures" and "expects to return to profitability this year."

Headquarters of Bukwang Pharmaceutical in Dongjak-gu, Seoul [Photo by Bukwang Pharmaceutical]

Bukwang Pharmaceutical announced on the 8th that it posted sales of 125.92824 billion KRW and an operating loss of 36.4886 billion KRW last year. Compared to 2022, sales decreased by 34%, and the operating loss widened by 36.2 billion KRW.

Lee Woo-hyun, CEO of Bukwang Pharmaceutical (Chairman of OCI Holdings), explained during a conference call following the earnings announcement, "We have devoted great effort to tight management for financial soundness," adding, "The combination of sluggish sales and aggressive research and development (R&D) led to a larger deficit."

Despite the decrease in sales last year, Bukwang Pharmaceutical increased its R&D expenses to 34.2 billion KRW, about 10 billion KRW more than the previous year. The R&D expenses as a percentage of sales also more than doubled, rising from 12.7% in 2022 to 27.2%. CEO Lee emphasized, "For new drug development, we cannot increase R&D expenses when funds are available and then stop when they are not."

In particular, R&D spending surged last year as the Phase 2 clinical trial of 'JM-010,' a treatment for dyskinesia in Parkinson's disease patients being developed by the Danish subsidiary Contera Pharma, approached its final stages. CEO Lee explained, "Last year, we maintained a certain level of R&D expenses due to preparations for new drug development, late-stage clinical products like JM-010, and various clinical supports such as Latuda." JM-010 is undergoing Phase 2 clinical trials in the United States, Europe, and Korea. Patient recruitment was completed at the end of last year, and topline data is expected in the first half of this year.

The company expects that Latuda, a treatment for schizophrenia and bipolar depression, will drive substantial sales growth this year. The drug, introduced from Japan's Sumitomo Pharma in 2017, is well known by its generic name, lurasidone. CEO Lee stated, "With the launch of Latuda, significant sales growth is expected in the central nervous system (CNS) field," adding, "We anticipate a return to profitability this year through operational system changes that increase contribution margin."

Lee Woo-hyun, CEO of Bukwang Pharmaceutical (Chairman of OCI Holdings) [Photo by OCI Holdings]

Regarding the impact of the ongoing integration efforts between OCI Holdings and Hanmi Pharmaceutical Group on Bukwang Pharmaceutical, the company drew a clear line, saying, "Nothing has been decided at this time." CEO Lee said, "There has been no integration between the two groups yet, and several procedures remain," adding, "If Bukwang has strengths such as a good portfolio, it could be beneficial to Hanmi, and Hanmi could also assist, but we will discuss specific details after the integration is completed." He promised to disclose more concrete information in the future.

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