ST Pharm Secures Orders Worth 50 Billion KRW in March Alone, Forecasts 16% Sales Growth This Year

Oligonucleotide CDMO Drives Sales Growth

ST Pharm, a CDMO (Contract Development and Manufacturing Organization) subsidiary of Dong-A Socio Holdings, has recorded orders exceeding 50 billion KRW this month alone, signaling strong performance for this year.

According to ST Pharm's disclosure on the 19th, the company announced a consolidated sales guidance of 320 billion KRW for this year. This represents a 16.2% increase from last year's 275.5 billion KRW. The company experienced growth rates of 50.5% in 2022 and 14.4% in 2023. Although sales declined by 3.3% last year due to adjustments in the generic drug segment, growth is expected to resume after two years.

On the 6th, ST Pharm signed a supply contract worth 15.23 million USD (approximately 22 billion KRW) for oligonucleotide therapeutic raw materials with a European global pharmaceutical company. This was the first new project order of the year. Subsequently, on the 10th, the company signed another supply contract worth 14.67 million USD (approximately 21.3 billion KRW) for oligonucleotide therapeutic raw materials with a multinational pharmaceutical company based in Europe, and on the 13th, it secured additional raw material supply contracts with global pharmaceutical companies in the US and Europe. The total value of these four contracts amounts to 55.1 billion KRW.

All these contracts are for the contract manufacturing and supply of oligonucleotide therapeutics. Unlike conventional antibody therapies that act directly on diseases within the body, oligonucleotide therapeutics work by directly binding to DNA (deoxyribonucleic acid) or RNA (ribonucleic acid) to block genetic information that can cause disease, providing therapeutic effects. This more fundamental treatment method has been developed primarily for intractable genetic diseases that cannot be treated with existing therapies such as antibodies.

Recently, indications have expanded to include chronic diseases such as hyperlipidemia. According to market research firm KOTELIS, the global oligonucleotide therapeutics market is expected to grow at an average annual rate of 18%, increasing from 7 billion USD (approximately 10.15 trillion KRW) in 2023 to 22 billion USD (approximately 31.9 trillion KRW) by 2030.

ST Pharm possesses oligonucleotide contract development and manufacturing capabilities ranked within the top three worldwide, with a production capacity of 6.4 mol. A mol refers to the total amount producible in a single synthesis during the oligonucleotide production process. Depending on the type of oligonucleotide, 1 mol corresponds to approximately 330 to 1,000 kg. ST Pharm entered this business in 2018 by completing a dedicated oligonucleotide manufacturing plant at its Banwol campus.

The company is currently expanding its production facilities through the construction of a second oligonucleotide building. Upon completion of the expansion by the end of this year, the oligonucleotide production capacity will increase to 14 mol annually, more than doubling the current 6.4 mol, thereby securing the world's top production capacity.

Hyunsoo Ha, a researcher at Yuanta Securities, stated, "Despite last year's sales decline, the proportion of high-margin oligonucleotide sales is increasing," adding, "Since over 90% of sales are generated through exports, further profitability improvements are expected due to the strong dollar."