Drug development gains at South Korean pharmaceutical companies are expected to keep supporting earnings through the second half of the year. Hanmi Pharmaceutical and Yuhan Corporation, which posted record second-quarter results on the strength of homegrown drugs and global licensing deals, are seen sustaining solid earnings momentum in the coming months.
Yuhan reported second-quarter consolidated revenue of 639.5 billion won ($459 million) and operating profit of 66.9 billion won ($48 million), up 10.4% and 34.1% respectively from a year earlier, according to the pharmaceutical industry on the 13th. Both figures marked quarterly records. Hanmi posted second-quarter consolidated revenue of 467.2 billion won ($335 million) and operating profit of 131.1 billion won ($94 million), up 29.3% and 116.9% respectively from a year earlier and beating market expectations.
Both companies share a common driver: profitability improved sharply as drug licensing gains began to flow into their results in earnest. Yuhan recognized 58.9 billion won in licensing revenue after booking a $30 million milestone payment tied to the European commercialization of Leclaza, a lung cancer treatment it licensed to Janssen in May. Hanmi widened its operating profit gain by booking a $75 million (about 112.9 billion won) upfront payment linked to a June licensing agreement with Eli Lilly for sonepegludetide, a treatment for short bowel syndrome.
Experts said the two companies will sustain annual growth on the back of rising domestic and overseas prescriptions of their own products and royalty income flowing in from abroad. Brokerages' consensus estimate puts Yuhan's full-year consolidated revenue at 2.348 trillion won and operating profit at 130 billion won, up 7.4% and 24.5% from a year earlier. Hanmi is expected to log revenue of 1.687 trillion won and operating profit of 300.9 billion won by year-end, gains of 9.0% and 16.7% respectively. For Yuhan, royalties will grow as global prescriptions expand for the combination therapy of Leclaza and Rybrevant, Janssen's bispecific cancer antibody. Hanmi is expected to see continued growth from homegrown products such as Rosuzet, a treatment for high cholesterol, and the Amozartan family of hypertension drugs.
