[Talksin War]② Botulinum Toxin Established as a Hit Product... Gained Wings with Reopening

The toxin war reaching the courtroom reflects how attractive the botulinum toxin (BTX) market is. The aesthetic medical market is growing by double digits annually, and the reopening of economic activities and the 'no-mask' era are becoming new tailwinds.

According to Samsung Securities Research Center, the domestic BTX aesthetic market has been growing by 10% annually since 2020. The market size, which was 157 billion KRW in 2020, expanded to 173 billion KRW in 2021, and is estimated to have reached 190 billion KRW last year. Samsung Securities forecasted the BTX market size to be 209 billion KRW this year. According to market analysis firm Daedal Research, the global BTX market is expected to grow to 6.5 billion USD (approximately 8.47 trillion KRW) this year. Looking back since 2018, this represents an average annual growth rate of 8%.

For domestic companies, BTX formulations are both 'cash cows' and 'star products.' Daewoong Pharmaceutical, which lost the first round of the toxin war, achieved its highest-ever sales last year thanks to the growth of its BTX formulation 'Nabota.' Nabota's sales last year recorded 142 billion KRW, a 78.5% increase compared to the previous year. Notably, overseas sales doubled, accounting for 77% of total sales. Industry insiders estimate Nabota's operating profit margin to be close to 50%, indicating it is a key product significantly impacting Daewoong Pharmaceutical's performance.

Medytoks, which gained the upper hand in the litigation, has yet to disclose its performance for last year. However, securities firms expect Medytoks' performance to improve due to the growth of its toxin products. Shinhan Investment Corp. projected Medytoks' operating profit to increase by 23.8% last year, with sales growing by 5.8% compared to the previous year. The BTX formulations currently produced by Medytoks include Meditoxin, Coretox, and Innotox. The sales forecast for Medytoks' toxin products last year is 89.9 billion KRW, expected to rise 42.5% year-on-year.

Hugel, which maintains the top domestic BTX market share, also broke records for highest-ever sales and operating profit last year, driven by the strong performance of its BTX formulation 'Botulax.' Botulax's sales last year increased by 28.9% compared to the previous year. Hugel explained that sales surged particularly in overseas markets such as China, Europe, Thailand, Taiwan, and Brazil.

The growth trend of the BTX market is expected to continue centered on China. This is because countries worldwide, including South Korea, have implemented 'With Corona' policies, ushering in a full-fledged no-mask era. As China, one of the global top three markets, lifts lockdowns and no-mask policies, it is anticipated that demand for aesthetic medical treatments will naturally increase.

Among domestic BTX companies, Hugel is the only one officially entered into the Chinese market, but BTX procedures in China are also performed through parallel imports besides officially approved products. According to iResearch's 2022 China Medical Aesthetic Industry Insight Report, the preference for BTX formulations among Chinese consumers was ▲Letibot (Hugel) 37%, ▲Nabota (Daewoong Pharmaceutical) 20.5%, ▲Liztox (Huons) 16.9%, and ▲Meditoxin (Medytoks) 14.2%. Four of the top eight products were from domestic companies. Samsung Securities researcher Seo Geun-hee said, "In China, BTX procedures are performed not only with officially approved toxin products but also through parallel imports. Due to reopening, the previously contracted demand for procedures is expected to recover rapidly, and domestic toxin companies' sales are expected to grow accordingly."