South Korea’s bio sector is gaining both attention and traction, with many claiming their successful global expansion. While not all of them can deliver on their word, Daewoong Pharmaceutical is one of the few companies here that is expecting to benefit from its past investments. The company is also not afraid to pour more funds into future businesses.
After spending more than 11.89 percent of its sales, worth 114.2 billion won ($100.65 million), on research and development in 2018, Daewoong recently announced that it will inject even more money this year.
A couple of the big pillars will be the US launch of its botulinum toxin Nabota and a partnership with Naver, both of which industry watchers view as robust future engines of growth.
Nabota’s footprint in US
The Korean company is pinning high hopes on the launch of Nabota in the US market.
“Since the product launch is imminent, we are expecting to see some results soon,” Daewoong spokesperson Lee Hwa-soo told The Korea Herald.
On Jan. 1, Nabota received marketing authorization from the US Food and Drug Administration. Daewoong and its US partner Evolus noted that they will start selling it under the name Jeuveau in the US this spring.
“In our last earnings call on March 18, we indicated that the launch is planned for the coming weeks,” said Evolus spokesperson Crystal Muilenburg. “It has received a positive feedback from physicians involved in our clinical trials. We believe we will take the No. 2 market share position in 18 months to 24 months after launch in the US.”
Industry experts here are singing the same tune.
According to analyst Jin Hong-guk from Korea Investment &Securities, Nabota is expected to gain a near 16 percent market stake in the US by 2025 due to price competitiveness.
“Nabota has a high potential for sales as the first Korean botulinum toxin product to enter the market. Medytox’s liquid-type botulinum toxin Innotox and Hugel’s botulinum toxin Botulax are scheduled to enter the US market in 2020, which means Nabota can expand its market presence without competitors for the next three years,” another analyst Kim Jae-ik from Hi Investment & Securities said.
Teaming up with Naver
In another recent development Daewoong has established a joint venture with Korean internet giant Naver.
The pharma company appears eager to take advantage of the government’s latest move to foster deregulation and cross-border collaboration.
According to Daewoong, even before establishing the JV, it had been interested in applying cutting-edge tech to develop new drugs.
“In 2014, we established a separate team in our company to develop drugs with new technologies,” the Daewoong spokesperson said. “At the beginning of this year we also formed a separate team for artificial intelligence tech-based health care business.”
The team is headed by Kim Yang-suk, CEO of the JV.
The Korean company, however declined to give its detailed business plans, saying it is in an early stage.
Separate from the JV, Daewoong and Naver signed a memorandum of understanding with Seoul National University Budang Hospital last year for providing medical data analyses based on AI technology. The company said this project will proceed separately from the JV.
Critics point out that the pharma firm still faces hurdles as Allergan and its Korean partner Medytox have filed a complaint with the International Trade Commission in Washington to stop Nabota imports. Allergan and its Korean partner Medytox claim that some of its former employees “stole” confidential manufacturing secrets to be used to develop Daewoong’s botulinum toxin product.
Daewoong and Evolus are refuting the allegations, saying such claims are without merit. “We remain confident in our intellectual property and proprietary manufacturing process, and will work with the ITC through its review,” the Evolus spokesperson said.
The two firms emphasized that the issue will not affect the company’s schedule for launching Nabota in the US this spring. “We are also hoping to receive approval in Europe during the second half of this year,” the Daewoong spokesperson added.
The company said that it is also injecting money for labs and sales channels in Asian countries such as China and Vietnam to expand its presence globally. Most recently, it acquired a 15 percent stake in Vietnam’s second-biggest drug maker Traphaco as a strategic investor.
By Song Seung-hyun (email@example.com)