Daewon Pharmaceutical 'Focuses' on Cold Medicine Shortage Signs... Patch-Type Obesity Treatment Clinical Trial Nears Completion

Kodaewon S, the No.1 Respiratory Market Share Product
Microneedle Patch Obesity Treatment Phase 1 Clinical Trial to End Next Month

As concerns over a cold medicine shortage grow, Daewon Pharmaceutical is gaining attention. The existing cash cow cold medicine series 'KoDaewon' is steadily growing. With the Phase 1 clinical trial of the microneedle patch obesity treatment 'DW-1022' approaching completion, expectations for new growth drivers are also increasing.

According to the financial investment industry on the 17th, Daewon Pharmaceutical's stock price has risen 8.5% this month. During the same period, the KOSPI increased by only 0.7%.

Daewon Pharmaceutical supplies new drugs, improved new drugs, and generic medicines to domestic hospitals, clinics, and pharmacies. Based on GMP-level production facilities for excellent health functional foods and specialized product capabilities, it also operates a contract manufacturing organization (CMO) business producing and supplying pharmaceuticals for leading domestic pharmaceutical companies. In the first half of this year, it recorded sales of 296.3 billion KRW and operating profit of 13.6 billion KRW.

Cold medicines are driving sales growth. KoDaewon S, the number one product in the respiratory market share, surpassed 50 billion KRW in sales last year. Daewon Pharmaceutical's annual sales remained around 300 billion KRW from 2016 to 2020. After the COVID-19 pandemic, demand for its main product, cold medicine, structurally increased, leading to sales growth of 354.2 billion KRW in 2021, 478.9 billion KRW in 2022, and 527 billion KRW in 2023.

According to related industries, cold medicine orders in the second half of this year increased sixfold compared to the monthly average in the first half. This is believed to be due to the resurgence of COVID-19 and the surge in demand for cold medicines during the changing seasons. Concerns over shortages of children's medicines are growing ahead of winter. Consumption of children's cough and cold medicines is up to 150% compared to supply, raising fears of a shortage crisis this coming winter.

Kim Yeji, a researcher at Korea Technology Credit Rating, said, "Seasonal factors in the second half and strong growth are being shown by key products such as the antitussive and expectorant KoDaewon S/Forte, the antipyretic and anti-inflammatory analgesic Pelubi, and the comprehensive cold medicine KolDaewon," adding, "Annual sales this year are expected to increase significantly."

Daewon Pharmaceutical has secured pharmaceuticals not only for respiratory diseases but also for circulatory, neuropsychiatric, and digestive systems. Through its own research institutes and personnel, it conducts research on new formulations, pharmacology, and raw material synthesis. Based on pharmaceutical research technology, it has developed about 12 blockbuster products. Notable products include KoDaewon S Syrup, KoDaewon Forte Syrup, Pelubi Extended-Release Tablets, S1MP Tablets, Renamezin Capsules, Shinbaro Tablets, and TG Phenon Tablets. Representative blockbuster products are Pelubi Tablets, Renamezin Capsules, S1MP Tablets, and TG Phenon Tablets.

Daewon Pharmaceutical's TG Phenon, the world's first tablet form of fenofibrate choline preparation, is an improved new drug with enhanced hydrophilicity by changing the salt form and applying a release control technology that releases the drug in the small intestine rather than the gastrointestinal tract, improving absorption in the body. The formulation size was reduced to less than half of the existing product, improving dosing convenience. Fenofibrate, well known as a treatment for hyperlipidemia, is also known to be effective for heart failure caused by obesity or diabetes, which led to a surge in related stocks in the domestic stock market.

Daewon Pharmaceutical is focusing on research and development of treatments for chronic diseases such as endocrine and circulatory system diseases like obesity, diabetes, and hyperlipidemia to secure a pipeline unaffected by seasonal and environmental factors. It is conducting a Phase 1 clinical trial of DW-1022, a GLP-1 patch for metabolic diseases such as diabetes and obesity. It is also developing DW-4421 for gastroesophageal reflux disease and DW-4321 for diabetes and obesity.

DW-1022 is a microneedle patch obesity treatment co-developed with Lapass. In Phase 1 clinical trials, the safety and pharmacokinetic properties of DW-1022 are evaluated in healthy adult volunteers, with Novo Nordisk's obesity treatment injection Wegovy used as a comparator for relative bioavailability. The clinical trial will conclude next month. DW-1022 is a microneedle patch containing the active ingredient semaglutide, converting the existing injection into a patch applied to the skin. It eliminates the inconvenience and pain of self-injection, improving medication adherence. The microneedles concentrate the drug at the advanced tips, minimizing waste of expensive active pharmaceutical ingredients. It also has the advantage of easier room temperature storage compared to existing injections, which is expected to make product distribution more convenient.

Yeonorae Yeo, a researcher at Hyundai Motor Securities, said, "Currently, domestic obesity treatment platform technology focuses on extended-release formulations that lengthen injection intervals and convenience improvements through microneedles," adding, "DW-1022 is undergoing Phase 1 clinical trials at three different doses, and safety and pharmacokinetic results are expected to be confirmed by February next year."

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