Strengthened Export Focus: Korean Pharma-Bio Firms See Strong Q2 Results and Bright Outlook for Second Half

In the second quarter of this year, domestic pharmaceutical and biotech companies recorded strong earnings, driven by expanded exports and a shift toward high-margin products. As this growth is attributed to fundamental structural changes, there are positive signals for the outlook in the second half of the year.

According to the industry on August 5, Samsung Biologics surpassed 2 trillion won in standalone sales (excluding Samsung Bioepis) for the first time in the first half of this year. The increase in the operating rate of its fourth plant and the resulting expansion of CDMO (Contract Development and Manufacturing Organization) production capacity significantly contributed to these results. In particular, it is analyzed that large-scale contract manufacturing agreements with global pharmaceutical companies have recently begun to be reflected in sales in earnest. The volume from long-term contracts with clients is expected to continue to be reflected in the third and fourth quarters, serving as a driving force for annual performance.

Celltrion continued its upward trend in performance as sales of next-generation biosimilars such as RemsimaSC and Yuflyma, both treatments for autoimmune diseases, increased steadily in both Europe and the United States. RemsimaSC is rapidly replacing high-priced self-injectable drugs in major European markets, while in the US, product diversification following Inflectra and Vegzelma is proving effective. Notably, the launch of Yuflyma in the US and the increase in market share in Europe, both of which began in the second half of last year, have been fully reflected in the second quarter, marking a significant step forward for Celltrion’s biosimilar business.

Among traditional pharmaceutical companies, Yuhan Corporation’s strong performance stood out. In the second quarter, sales reached 556.2 billion won and operating profit was 45.6 billion won, with profit surging by 190.1% compared to the same period last year. The main factors driving this improvement were exports of the new lung cancer drug Leclaza and revenue from technology licensing. Daewoong Pharmaceutical also set new records, with second-quarter sales of 363.9 billion won and operating profit of 62.5 billion won. The botulinum toxin Nabota surpassed 100 billion won in cumulative sales in the first half, achieving success in the expansion of the global aesthetics and therapeutics market. GC Green Cross recorded consolidated sales of 500.3 billion won and operating profit of 27.4 billion won in the second quarter, surpassing 500 billion won in quarterly sales for the first time. The expansion of overseas exports of core products played a decisive role.

Hanmi Science, the holding company of Hanmi Pharmaceutical Group, posted consolidated operating profit of 34.6 billion won in the second quarter, up 30.7% year-on-year. Hanmi Pharmaceutical’s out-of-hospital prescription sales exceeded 500 billion won in the first half, solidifying its position in the domestic market. Chong Kun Dang also saw second-quarter sales increase by 11.6% year-on-year to 429.6 billion won. However, due to increased R&D expenses, operating profit fell by 21.9% to 22.2 billion won. For Dong-A ST, second-quarter sales rose by 12.5% year-on-year to 177.4 billion won, but operating profit was only 4 billion won, down 43.4%. On a cumulative basis for the first half, sales were 346.4 billion won (up 16.3%) and operating profit was 11 billion won (up 40.8%). While the ETC and overseas business segments grew, a higher cost ratio and increased R&D investment weighed on profitability. In the case of Dong-A ST, second-quarter sales increased by 12.5% year-on-year to 177.4 billion won, driven by growth in the ETC and overseas business segments. HK Inno.N also surpassed 500 billion won in half-year sales for the first time, thanks to strong sales of the new gastroesophageal reflux disease drug K-Cab.

The common trend evident in the second-quarter results of domestic pharmaceutical and biotech companies is the effectiveness of 'export expansion' and 'global partnerships.' These results are not due to short-term exchange rate effects or a rebound in domestic consumption, but rather indicate that global strategies developed over several years are starting to pay off in the market. In particular, the expansion of sales channels through entry into the US and European markets?where demand for biopharmaceuticals is high?or through partnerships with local companies, has translated into tangible results. An industry official commented, "In the second half of the year, the possibility of global interest rate cuts and the continued trend of open innovation among big pharma companies are expected to bring various positive developments, including technology transfer agreements, large-scale CDMO orders, and the expansion of the biosimilar market."