SK Biopharm’s new drug tops 500 bln won in US sales

SK Biopharmaceuticals reached 270 billion won in sales in the U.S. market last year

After eight quarters since Q4 of 2021, SK Biopharmaceuticals shifted to a net profit from repeated operating losses

SK Biopharmaceuticals has completed establishing its direct sales strategy and inventory adjustment in the United States …“We anticipate a high gross profit margin of 90% or more”

SK Biopharmaceuticals.

SK Biopharmaceuticals’ Cenobamate, a new epilepsy drug, has generated cumulative sales of 500 billion won in the United States since its launch four years ago.

 

Previously, SK Biopharmaceuticals struggled with operating losses almost every quarter, except for occasional profits from technology exports.

 

However, the company has now turned to achieve profits, primarily attributed to the success of Cenobamate.

 

With its U.S.

 

direct sales system in place, SK Biopharmaceuticals anticipates a high gross profit margin increase of mid-90%.

 

SK Biopharm’s operating profit reached 15.2 billion won in Q4 last year, swinging to profitability after eight quarters of loss According to the pharmaceutical industry on the 30th, SK Biopharmaceuticals recorded 354.9 billion won in revenue last year, a 44% increase from the previous year at 246.2 billion won.

 

In the same period, the company’s operating loss reduced from 131.1 billion won to 37.1 billion won.

 

The company reduced its operating loss by 94 billion won year-on-year.

 

Notably, the company succeeded in turning black in almost eight quarters since Q4 2021.

 

The operating profit in Q4 was 15.2 billion won.

 

SK Biopharmaceuticals’ quaterly earnings (Unit: 100 million won, Source: Financial Supervisory Service).

Since its launch in the stock market in Q2 2020, SK Biopharmaceuticals had faced challenges with consecutive operating losses.

 

Except for occasional profits from technology exports in Q1 2021 (75.9 billion won surplus) and Q4 2021 (134 billion won surplus), the company continued to record operating losses.

 

In Q4 of last year, SK Biopharmaceuticals shifted to achieving operating profit, even without factoring in profits from technology exports.

 

The company attributes this success to the increased sales of Cenobamate in the United States.

 

Cenobamate’s sales in the U.S.

 

have seen a steep increase, accumulating a total of 530 billion won in sales Cenobamate’s sales in the United States were 270.7 billion won, a 60% increase year-on-year.

 

Cenobamate, which received approval from the United States Food and Drug Administration (FDA) in November 2019, was launched in May of the following year.

 

Since its launch, Cenobamate’s sales in the United States have experienced significant yearly growth, achieving 12.7 billion won in 2020, 78.2 billion won in 2021, and 169.2 billion won in 2022.

 

Since its launch, Cenobamate has generated a cumulative total of 530.8 billion won in sales.

 

The industry analysis predicts that if the current growth trend continues, sales in the U.S.

 

market will expand to approximately 400 billion won, with cumulative sales reaching 900 billion won by the end of this year.

 

The trend of Cenobamate sales in the U.S.

 

market (Unit: 100 mllion won, Source: Financial Supervisory Serivce).

SK Biopharmaceuticals explained that Cenobamate’s new-to-brand prescriptions (NBRx) have steadily increased over the past year.

 

As of December last year, 44 months after its launch, Cenobamate recorded NBRx of 26,000, which is 2.2 times higher than that of the competing drug.

 

SK Biopharmaceuticals plans to increase the number of monthly Cenobamate prescriptions to 30,000.

 

Simultaneously, the company aims to become number one in recording prescriptions within the therapeutic area (TA) and accelerate its business growth.

 

SK Biopharm has established the U.S.

 

direct sales system and inventory adjustment in advance, anticipating “a high gross profit margin” SK Biopharmaceuticals expects that the steady growth in Cenobamate’s sales in the United States, which led to the operating profit achieved in Q4 of last year, will continue throughout this year.

 

The U.S.

 

direct sales system is the rooting force behind this positive outlook.

 

Before the launch of Cenobamate, SK Biopharmaceuticals established its U.S.

 

subsidiary, SK Life Science, and established an extensive distribution network nationwide.

 

They have also recruited specialized CNS sales professionals throughout the United States to directly promote Cenobamate.

 

SK Biopharmaceuticals explained that the company can achieve a high gross profit margin with this direct sales system.

 

Unlike selling through local partners, SK Biopharmaceuticals can achieve a high profit margin as it doesn't have to pass on approximately 30% of its revenue as commissions.

 

SK Biopharmaceuticals anticipates that its future gross profit margin will remain in the mid-90s range.

 

Another attributing factor for expecting a high gross profit margin is blocking any possibilities of operating losses in advance.

 

At the end of the previous year, SK Biopharmaceuticals adjusted their inventory to prevent excessive accumulation by local wholesalers.

 

This helps to reduce adverse impacts on operational performance resulting from inventory depletion.

 

SK Biopharm is planning to expand indications for Cenobamate and develop a new pipeline as part of its mid-to-ling-term strategy The mid-to-ling-term strategy focuses on expanding indications and age groups and developing a follow-up new product.

 

For Cenobamate's indications, SK Biopharmaceuticals plans to expand its approval from partial seizures to generalized seizures.

 

The expected timeline for approval of this expanded indication is between 2025 and 2026.

 

Additionally, SK Biopharmaceuticals intends to expand the age range of use from adults to pediatric and adolescent patients.

 

SK Biopharmaceuticals’ Pipeline (Source: SK Biopharmaceuticals).

Furthermore, SK Biopharmaceuticals plans to present strategies for introducing a follow-up new product this year, intending to conclude acquisitions of new commercial products by 2025.

 

Last year, SK Biopharmaceuticals selected the development of radiopharmaceutical therapy (RPT), targeted protein degradation (TPD), and cell-gene therapy (CGT) as the ‘Three New Modality.’ Among these three, targeted protein degradation (TPD) is a potential candidate product.

 

Led by SK Life Science Labs, the company plans to provide information on the pipeline in the TPD area and the development schedule this year.

 

SK Life Science Labs owns a platform called ‘MOPED’ for discovering the molecular glue (MG).