Operating Profit Declines Due to Increased R&D Spending
Donga ST achieved its highest-ever quarterly revenue in the third quarter of this year, driven by strong performance in the ETC (ethical drugs) segment.
On October 29, Donga ST announced that its consolidated revenue for the third quarter of this year reached 198.4 billion won, a 10.5% increase compared to the same period last year. Operating profit was 16.8 billion won, down 15.4%. The company explained, "While the expansion of new ETC product sales led to record quarterly revenue, the operating profit was affected by a base effect due to low R&D spending in the third quarter of last year."
In fact, R&D expenses for the third quarter amounted to 26.4 billion won, up about 30% from 20.3 billion won in the same period last year. Donga ST is maintaining its R&D investment policy to expand its new drug pipeline and accelerate global clinical trials.
Revenue from the ETC segment was 145.3 billion won, up 20.6% year-on-year. Existing growth products such as Grotropin and Motilitone maintained solid performance, while new products such as Jacuvo and Diphereline began to contribute significantly to sales. In particular, Jacuvo posted 14.3 billion won, marking a 2,014% increase compared to the same period last year.
Grotropin recorded 36 billion won (+6.6%), and Motilitone posted 9.7 billion won (+4.5%). In contrast, Suganon declined slightly to 6.4 billion won. Tanamin showed signs of recovery, rising 27.8% to 3.4 billion won.
The overseas business segment posted 40.9 billion won, down 11.0%. Bacchus export volumes decreased slightly, and sales of the autoimmune therapy Imyuldosa declined due to inventory adjustments in the first half of the year. However, the diabetes treatment Evogliptin rebounded strongly, growing 108.2% to 4 billion won and achieving double-digit growth.
Donga ST is focusing on strengthening its R&D strategy to expand industrial value rather than on performance volatility. DA-1241, a MASH (metabolic dysfunction-associated steatohepatitis) treatment under development through its U.S. subsidiary Metavia, has completed global Phase 2a clinical trials. In topline data announced in December last year, the drug demonstrated safety and efficacy across all key evaluation indices, including ALT, CAP, FAST, and HbA1c. A follow-up presentation of the clinical data is scheduled for the American Association for the Study of Liver Diseases (AASLD) in November.
The obesity treatment DA-1726 confirmed weight loss efficacy and safety up to Part 2 of the global Phase 1a trial. An additional study to determine the maximum tolerated dose is currently underway, with topline results expected in December this year. Clinical and preclinical data will be presented at Obesity Week in the United States in November.
DA-7503, an Alzheimer's treatment targeting tau protein aggregation, is a small-molecule new drug currently undergoing domestic Phase 1a clinical trials. Topline data are expected to be released in the fourth quarter. Simultaneously, DA-4505, an AhR (aryl hydrocarbon receptor) antagonist class immuno-oncology drug, is also in domestic Phase 1a clinical trials.
The company is also accelerating the internalization of ADC technology to expand into next-generation modalities. DA-3501 (AT-211), a Claudin 18.2-targeted ADC candidate based on the third-generation linker technology 'AppClick' from Aptys, which was acquired last year, has completed preclinical studies. An IND application for Phase 1 clinical trials is scheduled for June next year.
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