As expected, Hanmi Pharm didn’t achieve 1trillion won in sales in 2016.
Hanmi Pharm that achieved 1.3trillion won in sales in 2015 recorded about 882billion won in sales in 2016. But it invested 162billion won in R&D, 18.4% of total sales in 2016 and has continued its effort to invest in R&D.

Hanmi Pharm temporarily announced on February 7th that in 2016, it accomplished 882.7billion won in accumulated sales, 26.8billion won in operating profit, and 30.3billion won in net profit on a consolidated basis.

Hanmi Pharm made a contract to export technology with a multi-national pharmaceutical companies and received 512.5billion won as a licensing fee. Therefore, it could exceed 1trillion won in sales. It explained that in 2016, the decrease in sales resulted from some changes in the technology contract. But other sales besides revenue from royalty increased by 6.2% from a year earlier.

The results in the fourth quarter of 2016 were in red: 172.1billion won in sales, -16 billion won in operating profit and -38 billion won in net profit. But the company invested 37.5billion won, 21.8% of its sales, in R&D. The sales in the fourth quarter were mainly from incrementally modified drug of Tamiflu, HanmiFlu (ingredient name: Oseltamivir), etc.

The sales of HanmiFlu sharply increased and the sales of prescribed drugs such as Atorvastatin Calcium Anhydrous+Irbesartan (Korean name: Rovelito Tab) to treat high blood pressure and hyperlipidemia, and the generic of Viagra (ingredient name: Sildenafil), Palpal Tab (Korean name) to treat erectile dysfunction had a strong record in domestic sales. And a part of upfront payment generated from the license transfer of target anticancer therapy ‘HM95573’ to Genentech was reflected in revenue.

But it is unclear whether Hanmi Pharm can achieve 1trillion won in sales again this year. The sales of 7 products such as Amlodipine+Losartan combination (Korean name: Amosartan Tab), Amlodipine camsylate (Korean name: Amodipin Tab), Ezetimibe+Rosuvastatin Calcium (Korean name: Rosuzet Tab), Esomeprazole strontium (Korean name: Esomezol cap), Atorvastatin Calcium Anhydrous+Irbesartan (Korean name: Rovelito Tab), Acetyl-l-carnitine (Korean name: Carnitil Tab), Naproxen+Esomeprazole strontium (Korean name: Naxozol) were only over 10billion won each in 2016.

The sale of its main product, Amlodipine+Losartan combination, is sluggish. The sale of the product stood at about 67billion won in 2015, up only 0.9% to about 67.6billion won in 2016. Moreover, the sale of Amlodipine camsylate decreased. The sale of the product recorded about 26.7billion won in 2015, down 3.6% to about 25.8billion won in 2016.

Hanmi Pharm made a contract of technology export with Genentech in 2016, but it isn’t clear if it can make another contract in 2017. Former vice president Jiwoong Son in charge of R&D at Hanmi Pharm moved to Life Science BU head at LG Chem. Therefore, the position to deal with R&D at Hanmi Pharm is vacant.

But there is possibility for growth. The sales of Ezetimibe+Rosuvastatin Calcium, Esomeprazole strontium, Atorvastatin Calcium Anhydrous+Irbesartan, Acetyl-l-carnitine, Naproxen+Esomeprazole strontium etc. increased besides Amlodipine+Losartan combination and Amlodipine camsylate. Especially the sale of Ezetimibe+Rosuvastatin Calcium sharply increased from about 500million won in 2015 to about 23.4billion won in 2016. Besides, the sales of Esomeprazole strontium and Atorvastatin Calcium Anhydrous+Irbesartan increased 10.5% and 46.6% respectively. And also, the sales of Acetyl-l-carnitine and Naproxen+Esomeprazole strontium increased 8.5% and 10.5% each.

Hanmi Pharm has maintained the largest R&D investment scale in Korea. And its new drug platform technology ‘PENTAMBODY’ showed in the J.P. Morgan Healthcare conference is in the spotlight. PENTAMBODY is a double antibody platform for the next generation to combine one antibody to two different target at the same time. For example, both immunotherapy for cancer and target anticancer treatment can be concurrently used with the technology.

Before the former vice president entering Hanmi Pharm, President & CEO Gwansun Lee has been in charge of developing new drugs and its pipeline. Therefore, the vacancy may not affect the company too much.

The officer at Hanmi Pharm said, “the company recorded degrowth in operating profit and sales because of decrease in royalty and changes in the technology contract. But besides the two parts, other sales increased 6% from a year earlier. The upfront payment is reflected in this year’s finances. And increase in sales of new products and export of finished products are expected. Therefore, we expect to make up for our achievements.”

lhs@docdocdoc.co.kr

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