“JW Jungwoo Pharmaceutical, Continues Profitability Improvement This Year”

[Asia Economy Reporter Jang Hyowon] Hanwha Investment & Securities analyzed on the 20th that JW Pharmaceutical's profitability improvement will continue this year.

JW Pharmaceutical announced its Q2 standalone sales of 163 billion KRW and operating profit of 10.3 billion KRW, marking increases of 12.4% and 173.7% respectively compared to the same period last year.

Sales by segment were 130.6 billion KRW for prescription drugs and 13.3 billion KRW for over-the-counter drugs, up 11.8% and 22.3% year-on-year, respectively.

A notable point in the Q2 sales is the continued growth of the hyperlipidemia treatment ‘Livalo’, which drives JW Pharmaceutical’s profitability improvement, and the strong performance of the rheumatoid arthritis treatment ‘Actemra’, whose indications were expanded to include severe COVID-19 patients.

However, profitability slightly declined compared to Q1, due to an increase in product sales such as Actemra and the anemia treatment ‘Perrinject’, including intravenous fluids, which have lower margins, leading to a rise in the cost ratio.

Hanwha Investment & Securities forecasts JW Pharmaceutical’s total sales and operating profit for this year to be 651 billion KRW and 44.7 billion KRW, respectively, representing increases of 8.2% and 25.9% year-on-year.

Researcher Kim Hyungsu of Hanwha Investment & Securities said, “The improvement in cost of sales ratio continues due to the in-house production of the main ingredient of Livalo, and profitability improvement is expected with the sales growth of the combination drug Livalojet.” He added, “Also, sales expansion of Actemra is expected due to the resurgence of COVID-19 and an increase in severe patients.”

Furthermore, Researcher Kim said, “The expansion of insurance coverage for the hemophilia treatment ‘Hemlibra’ to non-antibody patients can be expected as early as the second half of the year.” He analyzed, “Currently, insurance coverage is recognized for antibody patients, but since the non-antibody market is about 20 times larger than the antibody market, benefits are expected when insurance coverage is extended.”