Growth Fueled by New Drug Exports, U.S. Market Gains, and FDA Approvals
Headquarters building of Samsung Biologics. (Photo courtesy of Samsung Biologics)
Major South Korean pharmaceutical and biotech companies largely continued top-line growth in the first quarter of this year, supported by the global expansion of new drugs, strong exports and contributions from newly introduced products. However, while Samsung Biologics, Celltrion and SK Biopharmaceuticals posted particularly strong profit growth, Hanmi Pharmaceutical and Daewoong Pharmaceutical saw operating profit decline due to expanded R&D investment, one-off base effects, and the impact of distribution and marketing costs.
According to industry sources on May 15, Samsung Biologics maintained its industry lead by posting consolidated first-quarter revenue of 1 trillion 257.1 billion won ($898.83 million) and operating profit of 580.8 billion won ($415.36 million). Revenue rose 26% from a year earlier, while operating profit increased 35%. Growth was driven by full utilization at Plants 1 through 4 and solid contract manufacturing organization, or CMO, orders. In particular, the company achieved a high operating margin of 46.2% through a greater share of high-value-added products and efficient operations.
This year, the company secured a North American production base through the acquisition of a production facility in Rockville, Maryland, and is also strengthening its capabilities in next-generation modalities such as ADCs, or antibody-drug conjugates. Based on a stable order backlog and efficient plant utilization, it plans to maintain its annual revenue growth guidance at 15% to 20% and further strengthen its position in the global CDMO market.
Celltrion also sustained its high-growth trend in the first quarter, with consolidated revenue exceeding 1 trillion won. First-quarter revenue came to 1 trillion 145.0 billion won ($819.98 million), while operating profit reached 321.9 billion won ($230.23 million), marking the highest first-quarter results in the company’s history. That represented a 36% jump in revenue and a 115.5% surge in operating profit from a year earlier. Growth in 11 biosimilars sold in global markets, expansion of new high-margin product groups and broader prescriptions for Zymfentra in the United States drove the earnings improvement.
Steqeyma, which received approval from the U.S. Food and Drug Administration, or FDA, at the end of 2024, is seen as a follow-up growth product for targeting the U.S. market. In particular, analysts say the establishment of a direct sales system in the U.S. has led to lower distribution-stage costs, translating into a tangible rebound in operating profit. Celltrion plans to expand its product portfolio by continuing approvals and launches for follow-up biosimilar pipelines.
Yuhan Corp. posted consolidated revenue of 526.8 billion won ($376.80 million) and operating profit of 8.8 billion won, maintaining its place among the top traditional pharmaceutical companies by sales. In the domestic market, expanding prescriptions for the non-small cell lung cancer drug Lazcluze and expectations for progress in global commercialization following its license-out underpinned overall top-line growth. However, no large-scale milestone payments were booked during the first quarter, and operating profit, while up 37% from a year earlier due to increased new R&D investment and higher selling and administrative expenses, remained at a low level relative to revenue.
In the second quarter, milestone inflows are expected to improve profitability. On May 14, news was announced that the company had received a $30.0 million (about 45.0 billion won) milestone payment from Janssen related to the European commercialization of Lazcluze, which is expected to be reflected positively in second-quarter results. As profit-sharing from Lazcluze’s global commercialization, following FDA approval in August 2024, begins in earnest, the company is reinforcing a virtuous cycle of new-drug development by reinvesting secured cash into promising biotech ventures.
Chong Kun Dang posted standalone first-quarter revenue of 447.7 billion won ($320.20 million) and operating profit of 17.6 billion won, showing stable growth. Revenue rose 12.2% from a year earlier and operating profit climbed 36.9%, with the joint sales effect of the obesity treatment Wegovy serving as a key growth driver by generating about 50.0 billion won ($35.76 million) in new revenue. Existing flagship products such as the hypertension treatment Dilatrend also maintained solid demand, supporting the stability of the portfolio.
On the operating profit front as well, sales growth in newly introduced products combined with cost efficiency to produce double-digit growth. CKD-510, previously out-licensed to Novartis, is reportedly undergoing global Phase 2 clinical trials, leaving room for expectations of additional milestone payments depending on future development progress. The company is seen as pursuing growth by combining a strong domestic sales network with the results of global new-drug development.
GC Biopharma posted consolidated first-quarter revenue of 435.5 billion won ($311.47 million) and operating profit of 11.7 billion won, marking a rebound. Revenue increased 13.5% from a year earlier and operating profit rose 46.3%, demonstrating the effect of the blood product Alyglo gaining a foothold in the U.S. market. Despite being in the early stage of its U.S. launch, Alyglo generated 34.9 billion won ($24.97 million) in revenue in the first quarter alone, once again confirming its competitiveness in the global market.
In the vaccine business as well, seasonal effects from concentrated export volumes of Southern Hemisphere influenza vaccines boosted the share of overseas sales. GC Biopharma plans to step up efforts to improve full-year performance based on expanded prescriptions for Alyglo in the U.S. and growth in its blood products business. Efficient cost execution and a larger share of sales from high-margin products such as Alyglo are understood to have contributed to improved profitability.
Hanmi Pharmaceutical recorded consolidated first-quarter revenue of 392.9 billion won ($280.97 million), continuing top-line growth. But operating profit came to 53.6 billion won ($38.35 million), down 9.1% from a year earlier. Self-developed combination drugs such as Rosuzet supported revenue by performing well in the prescription market, but profitability softened somewhat due to expanded R&D investment including in next-generation obesity treatments and a one-off base effect. Even so, the company maintained an operating margin above the industry average.
As earnings contributions from Beijing Hanmi Pharmaceutical, its China-based subsidiary, continue, the global clinical performance of its obesity and metabolic disease pipeline is expected to be key to future corporate value. Hanmi Pharmaceutical is pursuing a strategy of lifting its profit structure again not simply through numerical growth, but through the commercialization performance of innovative new drugs. Industry attention is focused on what results its aggressive investment in research and development will produce over the long term.
Daewoong Pharmaceutical posted standalone first-quarter revenue of 335.7 billion won ($240.06 million) and operating profit of 27.4 billion won ($19.60 million). Revenue remained solid, supported by prescription growth for self-developed new drugs Fexuclu and Enblo and strong exports of botulinum toxin Nabota. However, operating profit fell 34.7% from a year earlier due to adjusted volumes at key wholesalers and concentrated spending on marketing costs.
The company views the decline in profit this time as temporary and expects profitability to recover in the second half as the share of sales from high-margin new drugs rises. With Nabota expanding global indications and diversifying export markets, its mid- to long-term growth momentum remains intact, according to market assessments. Daewoong Pharmaceutical plans to pursue both scale expansion and stronger fundamentals through a reorganization of its sales structure centered on new drugs.
HK inno.N posted consolidated first-quarter revenue of 258.7 billion won ($184.99 million) and operating profit of 33.2 billion won ($23.75 million), up 4.6% and 30.8%, respectively, from a year earlier. Stable sales came from the prescription drug segment centered on the gastroesophageal reflux disease treatment K-CAB, as well as the IV solution and chronic disease treatment businesses. Its operating margin improved to 12.8%, as growth in the prescription drug business and cost efficiency led to improved profitability.
The Phase 3 clinical results for K-CAB recently unveiled at Digestive Disease Week, or DDW, are also raising expectations for entry into global markets including the United States. HK inno.N plans to accelerate K-CAB’s global expansion while continuing companywide innovation in its profit structure.
Boryung posted consolidated first-quarter revenue of 255.4 billion won ($182.63 million) and operating profit of 20.1 billion won ($14.38 million), continuing its record run of quarterly results. Operating profit surged 84.6% from a year earlier, making it one of the most notable profitability improvements among traditional pharmaceutical companies. Its flagship Kanarb family of hypertension drugs served as a firm cash cow, while the company also maintained strong market competitiveness in oncology.
Analysts say major oncology products introduced from global pharmaceutical companies successfully gained a foothold in the market, driving both revenue and profit growth at the same time. In particular, the growing share of sales from high-margin self-developed products was the key factor behind the sharp rise in operating profit. Boryung is continuing to strengthen its oncology portfolio while also actively investing in new businesses to secure future growth drivers.
SK Biopharmaceuticals posted consolidated first-quarter revenue of 227.9 billion won ($163.05 million) and operating profit of 89.8 billion won ($64.23 million), showing profitable growth. As direct sales in the U.S. of the epilepsy treatment cenobamate gained traction, a structure became clearer in which revenue growth quickly translated into profit expansion. As the company entered a phase where the burden of fixed costs was offset, it posted a high operating margin of about 39.4%.
Prescription volumes in the U.S. market are on an upward curve, raising the prospect that quarterly profit could also expand if prescription growth continues. More recently, the company has moved to diversify its business by bringing in pipelines in the oncology field and is preparing to make a leap into a comprehensive biotech company. Its goal is to grow into a global biotech company based on independent marketing capabilities and solid profitability.
Kim Eun-jin
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