Domestic corporations in the pharmaceutical and biotech sectors are achieving results in the global market. According to statistics released by the Ministry of Food and Drug Safety at the end of June, the export scale of domestic pharmaceuticals last year increased by more than 28% compared to the previous year. With export performance surpassing import figures, the trade balance switched to a surplus for the first time in three years.
Corporations that have entered the largest pharmaceutical market, the United States, are focusing on strengthening local marketing and increasing market share. Celltrion's autoimmune disease treatment "Jimpenetra," SK Biopharma's epilepsy treatment "Xcopri," GC Biopharma's immunoglobulin blood product "Aliglo," and Yuhan Corporation's non-small cell lung cancer treatment "Lecsura" are among the representatives that have received new drug approvals from the U.S. Food and Drug Administration (FDA).
In the pharmaceutical and biotech industry, there is a consensus that it is important to possess the competitiveness of developing new drugs to overcome the limitations of the domestic market and continuously grow in the global market. Companies are expanding research and development (R&D) investment and reinforcing innovative strategies such as joint research, mergers and acquisitions (M&A), and technology transfer to enhance the probability of success in new drug development.
◇Pharmaceutical companies strengthen R&D through open innovation
Yuhan Corporation has been implementing an "open innovation" strategy since 2015, which accepts external technologies and ideas. By introducing candidate substances developed by biotech companies, the corporation conducts clinical trials to explore new drug possibilities and then exports the technology to global big pharma companies for market entry.
When exporting new drug technology, milestone fees or royalties earned through sales are shared with the original developers. This approach increases the likelihood of successful development while reducing the time required for clinical trials and the risk burden for corporations.
A prominent outcome of the open innovation strategy is Lecsura. After Yuhan Corporation introduced the new drug candidate technology jointly developed by Oscotec and its subsidiary Genosco in 2015, it took the lead in clinical trials and transferred global exclusive rights to Johnson & Johnson's subsidiary Janssen for subsequent trials in 2018.
Lecsura successfully entered the U.S. market last August as the first domestically produced anticancer drug. It received FDA approval for a combination therapy with Janssen's "Rivibrant" and was launched locally. Subsequently, it obtained approvals in Europe in December and also received approvals in countries such as the United Kingdom and Canada in the first quarter of this year. In May, commercialization began in Japan, and additional milestones were also achieved.
Yuhan Corporation is aiming to be among the "global top 50 pharmaceutical companies" and is accelerating the speed of new drug development. Recently, Yuhan Corporation introduced the allergy drug candidate "Resigertcept (YH35324)" at the American Academy of Allergy, Asthma & Immunology (AAAAI) and the European Academy of Allergy and Clinical Immunology (EAACI) clinical results from Phase 1b.
Chong Kun Dang is also enhancing R&D results through technology transfer and exports. The company signed a contract to export the candidate substance CKD-510 to the global pharmaceutical giant Novartis in November 2023. The contract scale was the largest ever at $1.305 billion (approximately 1.73 trillion won). In May of this year, Novartis submitted a Phase 2 clinical trial plan to the FDA, and Chong Kun Dang received a $5 million milestone. Earlier in February 2023, the company signed a technology transfer contract with the Dutch company Synaffix and secured the rights to use three types of antibody-drug conjugate (ADC) technology to start developing anticancer drugs.
Recently, the investment in R&D infrastructure has also been significantly expanded. Chong Kun Dang plans to establish a bio-pharmaceutical complex R&D facility on approximately 79,791 square meters of land in the Baegot district of Siheung, Gyeonggi Province. The project, which will involve a maximum investment of 2.2 trillion won, is expected to break ground within this year. In May of last year, the company established a U.S. subsidiary, "CKD USA," to serve as a global R&D hub in Boston.
Hanmi Pharmaceutical is developing several new drug candidates to maintain its reputation as a "new drug development hub." In particular, the clinical trial results for the next-generation obesity drug candidate HM15275 were recently revealed at the American Diabetes Association meeting, attracting attention.
In Phase 1 clinical trials, HM15275 demonstrated an average weight loss effect of 4.81% compared to the control group in just four rounds. Animal experiments confirmed improved body composition, increased muscle mass leading to a higher metabolism rate, and weight loss effects. Given that currently available obesity treatments are criticized for diminishing muscle mass as weight decreases, success in development could lead to another innovative obesity drug rather than a simple imitation.
Daewoong Pharmaceutical is also making efforts to develop new drugs that will follow its three major innovative drugs: the botulinum toxin "Nabota," the gastroesophageal reflux disease treatment "Pexuclu," and the diabetes treatment "Enblo." In June of this year, the company signed a collaborative research agreement for next-generation drugs with the Swedish biotechnology company Salipro Biotech. Daewoong plans to leverage Salipro's membrane protein stabilization technology to accelerate the discovery of next-generation drug candidates.
Daewoong Pharmaceutical is currently developing a candidate substance for the treatment of autoimmune diseases through its subsidiary HANALL BIOPHARMA, specializing in new drug development. Autoimmune diseases occur when the immune system mistakenly attacks normal cells, with rheumatoid arthritis being a notable example. Having a dedicated subsidiary for new drug development is a strategy to mitigate development risks and enhance R&D expertise and speed.
◇Korea's pharmaceutical exports soar…growth forecast for this year
According to the Ministry of Food and Drug Safety, last year's domestic pharmaceutical exports amounted to 12.6749 trillion won, an increase of 28.2% compared to the previous year. Thanks to the surge in exports, the trade balance recorded a surplus of 1.1664 trillion won, the highest level since 2020, marking a switch to a surplus for the first time in three years.
Domestic pharmaceutical production recorded 32.8629 trillion won, up 7.3% from the previous year. This is the highest figure since statistics began to be compiled in 1998. Pharmaceutical production accounted for 1.29% of the Gross Domestic Product (GDP) and 4.8% of the total manufacturing sector's GDP. The average annual growth rate over the past five years is 7.5%, which is higher than the GDP growth rate of 5.5% during the same period.
Companies with pharmaceutical production revenues exceeding 1 trillion won include Celltrion, Hanmi Pharmaceutical, and Chong Kun Dang, remaining the same as the previous year. Celltrion's production revenue rose 62.5% compared to the previous year, reaching 25.267 trillion won, maintaining its first place.
Projections indicate that major pharmaceutical and biotech companies will continue their growth this year, thanks to technology transfers and the expansion of overseas exports. According to financial information provider FnGuide, overall sales of the top five pharmaceutical companies, including Yuhan Corporation, Hanmi Pharmaceutical, Daewoong Pharmaceutical, Chong Kun Dang, and GC Biopharma, are expected to increase compared to the previous year in the first half of this year.
Biopharmaceutical contract development and manufacturing organizations (CDMO) such as Celltrion and Samsung Biologics are generating over 90% of their revenue from overseas. Samsung Biologics reported sales of 4.5473 trillion won last year. This year, it achieved a cumulative order amount of 3.2525 trillion won within just five months, which exceeds 60% of last year's total order amount, with expectations that it will easily reach its target of "over 5 trillion won in annual sales" set at the beginning of the year.
Celltrion recorded its largest-ever sales of 35.573 trillion won last year. The company has set a goal of achieving "5 trillion won in sales" this year, attributed to the rapid growth of autoimmune disease treatments and anticancer drugs in the U.S. and European markets, as well as the increasing number of product lines being launched.
The suspension of mutual tariffs on pharmaceuticals, which U.S. President Donald Trump had foreseen after taking office, has created a favorable environment for corporate performance. While tariff uncertainties have not been resolved and various variables remain in the global market environment, such as the Israel-Iran conflict, domestic corporations believe the impact will be limited.