The mass resignation of residents opposing the government’s increase in medical school seats has lasted more than eight weeks. As major large hospitals across the country are having difficulty operating, there are concerns about sluggish sales of intravenous fluids, which are essential prescriptions when patients are hospitalized. This is why attention was focused on the first quarter report card of JW Pharmaceutical, which ranks first in the domestic infusion solution market.
Currently, the leader in the domestic IV solution market is by far JW Pharmaceutical. According to the Financial Supervisory Service’s Electronic Disclosure System on the 26th, JW Pharmaceutical’s IV sales last year recorded a total of KRW 265 billion, including ▲comprehensive nutrient IV KRW131.4 billion ▲general IV KRW85.9 billion ▲special IV KRW30.6 billion ▲perfusion fluid KRW17.1 billion. Its share of total sales is 35.76%.
According to JW Pharmaceutical, comprehensive nutritional fluid is a fluid that supplies nutrients such as amino acids, lipids, and proteins to patients who have difficulty eating for a long period of time. In addition to the 2-chamber sap, which stores glucose and amino acids in separate chambers (compartments) and uses the joints by piercing them just before use, a 3-chamber sap that can store amino acids, lipids, and glucose has also been developed.
In the case of general (basic) fluid, it is a fluid that supplies moisture, electrolytes, and sugars essential for maintaining life. This includes physiological saline solution and glucose solution. In addition to supplying moisture and electrolytes, it is also used as a diluent to dilute and administer intravenous (IV) medications.
Special fluids are used in special cases, such as draining blood in the brain when a cerebral hemorrhage occurs or maintaining a constant amount of blood to prevent dangerous situations due to bleeding. In addition, small amounts of electrolyte additives and perfusion fluids used to wash and disinfect blood during surgery are also classified as special fluids.
JW Pharmaceutical’s main fluid sales come from comprehensive nutritional fluids. This is because general sap has low production costs and is not highly profitable, and special sap has a relatively narrow range of use. However, due to the resident strike that has continued since last February, the bed utilization rate of large general hospitals has decreased, leading to continued concerns about the performance of in-hospital prescription drugs such as intravenous fluids.
Comprehensive nutritional fluid is a product prescribed widely from general hospitals to private clinics, but large hospitals are bound to have higher sales. Currently, the bed utilization rate at the ‘Big 5’ in the metropolitan area, including Seoul National University Hospital, Severance Hospital, Seoul St. Mary’s Hospital, Asan Medical Center, and Samsung Seoul Hospital, is only at 50% compared to before the resident strike.
This means that the possibility that the decrease in intravenous fluid prescriptions at general hospitals may affect JW Pharmaceutical’s first quarter performance cannot be ruled out. In the first quarter of last year, JW Pharmaceutical’s sales of IV fluids recorded 64.1 billion won. However, the securities industry believed that the actual decrease in sales due to the major incident would not be significant.
Ha Tae-gi, a researcher at Sangsang Securities, said in a report, “The infusion solution sector was forecasted somewhat conservatively, assuming a worsening business environment in general hospitals due to the issue of resident resignations,” and estimated first quarter infusion solution sales at KRW 58.8 billion, down 2% from the same period last year.
At the same time, other product lines other than infusion solutions are expected to maintain stable growth. Researcher Ha analyzed, “Despite the conservative view on the infusion solution sector, annual sales are expected to grow by 9.1% to KRW 818.1 billion and operating profit is expected to increase by 15.2% to KRW 114.7 billion.”
An official from JW Pharmaceutical said, “As intravenous fluid is a product that is basically prescribed when admitted to a hospital, it cannot be said that there is no impact from the resident’s strike at all,” but added, “As specific prescription data has not yet been compiled, accurate figures can only be confirmed when the first quarter performance is released.” “There is,” he said cautiously.
As JW Pharmaceutical is expanding its overseas market by promoting high value-added products, there is a high possibility that it will increase its performance through overseas sales even if domestic sales decrease.
Last year, overseas sales of JW Pharmaceutical’s comprehensive nutritional solution ‘Winnerf’ recorded 1.2 billion won. Although it is about 10% of domestic sales (KRW 130.2 billion), overseas sales are likely to increase further this year as Winnerf began exporting to Mongolia at the end of last year.
Previously, JW, to which JW Pharmaceutical belongs, signed an exclusive export contract with global pharmaceutical company Baxter in 2013 for Winuf (export product name: Finomel). Since then, in 2020, Baxter’s global Finomel business area has been adjusted from all countries except Korea to Europe, Oceania, the Middle East, and North Africa.
Recently, ‘Winnerf A Plus’ was launched with higher amino acid content and lower glucose content compared to Winough. Winnerf A Plus is a product that is convenient to prescribe because it can supply sufficient protein to patients suffering from weight loss due to negative nitrogen balance without the need for separate amino acid preparations.
In particular, it is the first high-content amino acid comprehensive nutritional solution to be released as a product for peripheral venous use, making it possible to supply high-protein nutrients to patients who do not use central venous catheters (tubes).
Last year, JW Pharmaceutical recorded consolidated sales of KRW 748.5 billion and operating profit of KRW 100.3 billion, achieving an operating profit ratio of 13.4%. Although both cost of sales and SG&A increased slightly, operating profit increased by 59.21% compared to the same period last year, which is considered to have strengthened the company’s internal stability.
In particular, the ‘Livaro’ family of hyperlipidemia treatments, which recorded sales of 148.1 billion won last year and accounted for 19.99% of total sales, is expected to be a sales-generating item again this year. JW Pharmaceutical has lowered the cost ratio to 10% by producing pitavastatin, the main ingredient of Livaro, on its own.
Considering that JW Pharmaceutical is strong in the hypertension and hyperlipidemia treatment market, some believe that there is a small possibility of a decrease in performance due to the resident incident.
Shin Min-soo, a researcher at Kiwoom Securities, said in a report, “It is inevitable that there will be a decline in drug prescriptions due to the strike of medical specialists,” but “the impact of companies that promote chronic diseases such as hypertension and hyperlipidemia, which existing patients have no choice but to use consistently, as their representative products is expected to be relatively less affected.” I saw.
The size of the domestic hyperlipidemia treatment market reaches 1.7 trillion won as of 2021. In the case of the four-drug combination drug market for hypertension and hyperlipidemia, which has recently been in the spotlight, the amount of outpatient prescriptions exceeded 12.7 billion won last year.
JW Pharmaceutical is also currently conducting R&D on three and four drug combination drugs for hypertension and hyperlipidemia. Livaro’s three-drug combination of pitavastatin, valsartan, and amlodipine is scheduled to be released in 2025 after completing phase 3 clinical trials last year. Among hypertension and hyperlipidemia treatments, the market size for three-drug combination drugs is estimated at approximately 320 billion won.
Currently, a number of leading players, such as Hanmi Pharmaceutical and Boryung and Daewoong Pharmaceutical, have entered the three-drug combination drug market. However, JW Pharmaceutical believes that pitavastatin, the main ingredient in Livarozet, is competitive as it does not have any signs of risk of developing new diabetes mellitus (NODM), one of the representative side effects of statin ingredients. Most existing drugs are three-drug combinations of rosuvastatin, telmisartan, and amlodipine.
In the case of general statin drugs, the ability to maintain blood sugar in the body at an appropriate level may be impaired by increasing the glycated hemoglobin (HbA1c) level. On the other hand, diabetes medications have a mechanism to improve blood sugar homeostasis in the body, so when used together, conflicting drug effects may appear in the body. In this respect, pitavastatin has the special advantage of being an ingredient that ensures safety from drug interactions with amlodipine.
In the case of a four-drug combination, clinical trials are underway with pitavastatin, valsartan, amlodipine, and ezetimibe. JW Pharmaceutical plans to complete phase 3 clinical trials in 2026 and release it in 2027.
Meanwhile, JW Pharmaceutical recently entered phase 3 global clinical trials for its gout treatment drug ‘Epaminurad’ and is speeding up related R&D. Based on the disclosure report, JW Pharmaceutical’s development costs recognized as intangible assets increased significantly from KRW 1.1 billion in 2022 to KRW 12.6 billion last year. This occurred as Epaminurad entered phase 3 clinical trials in all five countries, including Korea, Taiwan, Thailand, Singapore, and Malaysia.
Epaminurad, which JW Pharmaceutical is developing as an oral medication, is a uric acid excretion promoter that selectively inhibits hURAT1. The main indication is gout caused by hyperuricemia, which is an abnormally high concentration of uric acid in the blood.
JW Pharmaceutical is targeting the gout treatment market, which has a high unmet demand due to the side effects of existing treatments, by pursuing global technology export along with the progress of phase 3 clinical trials. The global gout treatment market is expected to grow to approximately 10 trillion won by 2025.
Tags: Pharmaceutical years performance breakthrough Livaro overseas markets Pharmaceutical Bio Text article
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