DL Pharm and Medicox Jointly Promote Distribution Business for COVID-19 Vaccines and More

[Asia Economy Reporter Jang Hyowon] DL Pharm, a pharmaceutical distribution specialist company, has signed a Memorandum of Understanding (MOU) with KOSDAQ-listed company Medicox on the expansion of the cold chain system and the expansion of the distribution network for pharmaceuticals including COVID-19 vaccines.

The MOU signed this time mainly includes ▲expansion of the existing cold chain system ▲distribution of pharmaceuticals such as COVID-19 vaccines ▲joint promotion of the microbiome business between the two companies.

Starting from the signing of the MOU, DL Pharm plans to activate not only the expansion of the pharmaceutical distribution network including COVID-19 vaccines through the expansion of the cold chain system but also the microbiome business. Medicox will be responsible for comprehensive business support including facility investment, cold chain management system establishment, management, and sales support to activate the promoted business.

The cold chain is a logistics system for temperature control throughout the entire process from production to shipment and distribution, and has recently become mandatory in various medical business sectors such as COVID-19 and flu vaccines. The company expects demand to continue to increase as the cold chain system is highlighted along with the government announcement securing a total of 99 million doses of COVID-19 vaccines.

DL Pharm delivered about 15% of the government procurement volume of flu vaccines using a cold chain of 2 to 8 degrees Celsius, and about 50% of last year's sales of 49.8 billion KRW came from the cold chain system sector. The company expects that the investment in the minus 25-degree level cold chain system, carried out in connection with Medicox, will lead to COVID-19 vaccine distribution in the second half of the year and drive performance.

Kang Yoon-gu, CEO of DL Pharm, said, “We aim to secure a minus 25-degree level cold chain system capable of distributing COVID-19 vaccines, general vaccines, and refrigerated pharmaceuticals in cooperation with Medicox within this year. From the second half of the year, we will strive to diversify the distribution of COVID-19 vaccines and the supply of vaccines to the Public Procurement Service.” He added, “Regarding the distribution business using the cold chain and the microbiome business jointly promoted with Medicox, since market demand is rapidly expanding, we plan to actively discuss various measures including share sales between the two companies to expand the business.”

Established in 2005, DL Pharm obtained certification as a qualified company under the Pharmaceutical Distribution Quality Management Standards (KGSP) from the Ministry of Food and Drug Safety in 2006, and ranked among the top in the pharmaceutical distribution market share as of 2019. Leveraging its strength of having a nationwide distribution network for specialized pharmaceuticals and vaccines, the company recorded sales of approximately 49.8 billion KRW last year, achieving a sales growth rate of 171% compared to the previous year.

Meanwhile, DL Pharm plans to actively develop the microbiome business of probiotic-containing health functional foods, which is included as a major item in the MOU. The company expects that if multifaceted marketing collaboration is carried out with Medicox, market interest in the currently marketed product ‘Dr. L Multi Probiotics’ is increasing, and it could contribute to annual sales of around 3 billion KRW.