April 26, 2024

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[THE INVESTOR] South Korean drug maker Daewoong Pharmaceutical's revenue is expected to improve from next year as the firm has completed construction of a new plant, a local brokerage company said on Dec. 1.

Daewoong invested 37.7 billion won (US$32 million) to build a plant for manufacturing botulinum toxin product Nabota in Hyangnam, Gyeonggi Province. 

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“The maximum production capacity value of the existing Nabota plant is limited to around 10 billion won, but the new plant alone will have a targeted annual capacity value of 300 billion won,” said Koo Wan-sung, an analyst at NH Investment & Securities.

Daewoong is currently seeking certifications from health authorities in the US and South Korea which are designed to ensure the safety and quality of the new manufacturing facility -- the Current Good Manufacturing Practice by the US Food and Drug Agency and Korea Good Manufacturing Practice by the Ministry of Food and Drug Safety.

“If the company wins gets the Korean ministry’s approval in mid-2017, it will help boost the sales of Nabota in South Korea and other Southeast Asian countries,” Koo said.

He forecast that domestic sales of Nabota will grow to 15.3 billion won in 2017, up 125 percent from 6.8 billion won in 2016.

Inspection by the FDA of the manufacturing facilities will be a key to the firm’s entry into the US market, the largest market for botulinum toxin products, he said.

“As Daewoong has already secured marketing partners in the US, the market will become a stable revenue source,” he said.

NH Investment & Securities retained a buy rating for the stock and raised the target price to 90,000 won. Daewoong shares were traded at 66,000 won, down 1.64 percent as of 11:30 am.

By Park Han-na (hnpark@heraldcorp.com)