Overseas Markets, Now Directly Penetrated... The Trend of Direct Sales in Pharmaceutical and Bio Industries

Green Cross's 'Aliglo' US Subsidiary Direct Sales
Initial Costs Incurred but Long-Term Profitability Possible
Celltrion, SK Biopharm, and Others Already Achieve Significant Results

Overseas expansion strategies of domestic pharmaceutical and bio companies are rapidly changing. While they previously chose to collaborate with overseas partners who already had sales networks for 'quick entry,' there is now a strong movement toward direct sales, or 'jikpanhwa.' Although it requires building a sales network from scratch, which entails significant initial investment costs, the judgment is that once established, it can increase profitability in the long term.

GC Green Cross plans to soon sell Aliglo, a blood product for immunodeficiency treatment approved by the U.S. Food and Drug Administration (FDA) at the end of last year, in the United States. The initial shipment for U.S. distribution was made on the 8th of last month. Sales will be directly handled by its U.S. subsidiary, GC Biopharma USA. The company has secured multiple supply channels by signing contracts with several pharmacy benefit managers (PBMs), including Express Scripts, a major PBM that serves as a preliminary gateway for distribution in the U.S. The company aims to achieve sales of $50 million (approximately 70 billion KRW) in the second half of this year alone and plans to increase annual sales to $300 million (approximately 415.5 billion KRW) by 2028.

Blood product 'Aliglo' is being shipped from GC Green Cross Ochang Plant in Ochang, Chungbuk.
[Photo by GC Green Cross]

Companies like Celltrion and SK Biopharm are already achieving considerable success through direct sales. Celltrion sells most of its products directly through local subsidiaries in the U.S., Europe, and Latin America. In the European market, the combined market share of Remsima and Remsima SC, autoimmune disease treatments, reaches 76% in France. Similarly, the FDA-approved new drug Zimpentra, which contains the same active ingredient, has increased profitability through direct sales in the U.S. Notably, by internalizing the entire process from development to clinical trials, approval, and sales, other companies have begun requesting Celltrion to distribute and sell their products as well.

SK Biopharm directly sells Cenobamate, an epilepsy treatment that it developed and obtained FDA approval for, through its U.S. subsidiary SK Life Sciences. Since SK Pharmteco, an affiliate, manufactures the drug and SK Biopharm handles sales, the gross profit margin (GPM) of Cenobamate reportedly reaches the 90% range. As market share rapidly increases, the company turned profitable in the fourth quarter of last year. SK Biopharm plans to achieve profitability on an annual basis this year as well. The market forecasts SK Biopharm’s performance this year with sales of 494.6 billion KRW and operating profit of 58.2 billion KRW.

HLB also plans to sell the liver cancer treatment drug Lenvatinib, for which it is seeking FDA approval again, directly through its U.S. subsidiary Elevate Therapeutics after approval. It also plans to sell Camrelizumab, a combination therapy partner drug from Hansoh Pharmaceutical. The company has already formed a marketing team and started sales since last year, recruiting many distribution and sales personnel from multinational pharmaceutical companies.

On the other hand, some companies still choose to collaborate with local partners. Even though profitability may be somewhat lower, they prioritize rapid market share expansion in already highly competitive markets. Hugel sells Retivo, a botulinum toxin preparation that received FDA approval in February and recently shipped its first export batch, in the U.S. together with Benev. Although direct sales were expected since Hugel America, a joint venture with another partner Chromapharma, was already established locally, the company chose collaboration. The company explained the background by stating, "The biggest factor was the ability to immediately launch products and expand sales in the U.S. market."