Dong-A ST’s sales of prescription drugs up 24% in Q3 – Korea Biomedical Review

Dong-A STs sales and operating profit increased thanks to the growth of prescription drugs in the third quarter, the company said.

As the company improved profitability even before receiving fees for licensing out a Stelara biosimilar to Indias Intas Pharmaceuticals, the companys earnings are expected to grow more, analysts said.

Dong-A ST said in a public filing that its third-quarter revenue increased 4.3 percent on-year to 151.9 billion won ($128.9 million). Operating profit jumped 73 percent to 11.6 billion won, and net income, 170.4 percent to 11.3 billion won.

Solid sales of prescription drugs drove the growth of third-quarter earnings. In the third quarter, the companys sales of prescription drugs rose 24.7 percent to 100.4 billion won.

R&D costs and selling, general, and administrative (SG&A) expenses climbed 15.2 percent and 8.6 percent year-on-year, respectively. Still, it was notable that operating income expanded with an improved cost ratio in the prescription drug sector.

Sales of Dong-A STs diabetes treatment Suganon increased 40.3 percent on-year to 8.2 billion won in the third quarter. Functional dyspepsia treatment Motilitone sold 7.8 billion won, up 4.5 percent year-on-year, gastritis drug Stillen, 5.2 billion won, up 28.5 percent, and human growth hormone Growtropin, 12.2 billion won, up 38.1 percent.

However, Dong-A STs revenue overseas decreased 25.7 percent in the third quarter from a year earlier, mainly due to a drop in sales of canned Bacchus, an energy drink, a decline in sales of anti-tuberculosis drug amid fewer government biddings, and a delayed export of a biosimilar of Darbepoetin- to Japan to the fourth quarter.

The company also had a poor performance in medical devices and diagnostic products, with related sales decreasing 17.5 percent year-on-year.

After some agreements over medical devices expired in the fourth quarter, the company failed to find a new source of income in the sector.

In the R&D field, we will focus on the global development of DMB-3115, a biosimilar of Stelara, this year, an official at Dong-A ST said.

In July, Dong-A ST licensed out DMB-3115 to Intas, a multinational pharmaceutical company.

The agent is being tested in the global phase 3 trials in the U.S. and three countries in Europe Poland, Estonia, and Latvia.

Later, the trials will expand to nine countries in Europe, the company said.

The company completed the moving of Bio R&D Center to Songdo, Incheon, in April and built a cluster with DM Bios production facilities, which will help the company focus on and accelerate biopharmaceutical research, it said.

Dong-A ST joined the K-mRNA vaccine consortium in September and will conduct vaccine trials, the company added.

Analysts viewed Dong-A STs third-quarter earnings as positive.

Kiwoom Securities said in a report that Dong-A ST improved profitability without an inflow of upfront payment for the licensing deal (on a biosimilar of Stelara) because of sales of prescription drugs including Motilitone, Suganon, and Growtropin kept growing.

We expect the company will turn to operate profit in the fourth quarter year-on-year, the report said.

However, the brokerage noted that Dong-A STs fourth-quarter sales are expected to inch down from the third quarter because a quick selling of some prescription drugs could be applied to the governments consumption-drug price linkage system, which adjusts a drug price according to an increase in drug usage.

Dong-A ST will handle clinical trials of mRNA vaccines in the mRNA consortium. It is positive that it will gain experience in clinical development for a new modality, Kiwoom Securities said. Also, as the phase 3 trial of a Stelara biosimilar is ongoing, the company is expected to release the drug in July 2024 when the original drugs patent in Europe expires.

Read the original here:

Dong-A ST's sales of prescription drugs up 24% in Q3 - Korea Biomedical Review