[Asia Economy Reporter Jang Hyowon] DxVx announced on the 16th that it has signed a contract to acquire 100% of the shares of Korea Bio Pharm, a leading company in health functional foods, for 15 billion KRW to enter the biohealthcare contract development and manufacturing organization (CDMO) market and establish an integrated business structure linking its own brand’s ‘research and development-production-distribution.’
Korea Bio Pharm, established in 1995, is a health functional food manufacturing specialist located in Jincheon, Chungbuk, producing over 120 products for 58 partner companies in OEM/ODM form. It has 10 production lines for powders, tablets, capsules, etc., across its first and second factories totaling approximately 9,917 square meters (about 3,000 pyeong). Its main dosage form, powder sticks, has an annual production capacity (CAPA) of 4.5 billion units. Last year, it recorded sales of 13.5 billion KRW and operating profit of 1.5 billion KRW, demonstrating a very solid profit structure.
Since February this year, DxVx has been exporting and selling biohealthcare products worth about 1 billion KRW monthly through online channels and an offline sales network of approximately 12,000 outlets in the Chinese market. Starting this October, it plans to expand exports to China using the acquired GMP production facilities and launch about 10 products in the domestic market by commercializing technologies and items developed step-by-step at its own microbiome research institute. Therefore, Korea Bio Pharm’s estimated sales for 2023 are expected to increase significantly compared to this year, with profitability also anticipated to improve.
In particular, the value chain from diagnosis to prevention, which is the core of future medicine, will be based on genomic diagnostic technology to independently produce and provide various biohealthcare products that pursue preventive functions in daily life.
Park Sangtae, CEO of DxVx, said, “Securing this production base establishes a business structure that connects R&D capabilities to production. Along with securing new pipelines in the future, we will create various products that allow consumers to experience future bio technologies in their daily lives.” He added, “To secure sustainable growth momentum through R&D, profitability must be the foundation. DxVx will present a new model for bio companies by monetizing R&D and thereby secure sustainable growth momentum.”
With DxVx securing a biohealthcare GMP production base, synergy effects with the Kori Group, led by major shareholder Lim Jongyun, chairman of Hanmi Pharmaceutical, are expected to become more concrete. Based on global clinical and consumer analysis results accumulated over more than 10 years by Kori Group, it is known that they plan to pioneer domestic and overseas markets by expanding development from pregnancy and childbirth areas to high value-added products targeting women and middle-aged to elderly populations.
Meanwhile, DxVx has continued remarkable performance growth since the joining of major shareholder Lim Jongyun and the new management team, recording sales of 13 billion KRW and operating profit of 1.1 billion KRW in the first half of this year. Recently, it confirmed institutional investors’ trust in its future growth potential by issuing convertible bonds (CB) worth 17.8 billion KRW. DxVx plans to use the raised funds to additionally establish global research and production bases step-by-step and continuously acquire tangible and intangible domestic and international assets such as pharmaceutical pipelines.
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