Sales of cepha antibiotics make a rebound

...the turnaround story of the white elephant

Prescription of cepha antibiotics rise 33% in one year... affected by the surge in confirmed COVID-19 patients last year

Performance of major producers also improve... Sales rebound last year after a continuous decline

“A temporary situation due to the surge in demand last year... Productivity still low"

Biopharmaceutical companies that produce the so-called ‘cepha antibiotics' have taken a breather with the increased demand for related products due to the rapid increase in confirmed COVID-19 cases last year.

 

This is in stark contrast to the situation of the previous year when many companies were contemplating whether to withdraw their cepha businesses.

 

However, the dominant opinion is that the sales increase last year was a temporary phenomenon due to the rapid increase in confirmed COVID-19 patients.

 

The frontline companies unanimously agree that they are still contemplating whether to reduce or discontinue their cepha business amid the recent trend of a steady decline in antibiotic prescription rates and a steady rise in production costs.

 

◆Sales of cepha antibiotics make a rebound...influenced by the surge in confirmed COVID-19 patients According to the Financial Supervisory Service on the 13th, Yungjin Pharm's antibiotic-related sales increased 15% in one year from KRW 59.6 billion in 2021 to KRW 68.6 billion last year.

 

Sales of products it directly produces and sells such as Clamonex, Cefaclor, and Ceftazidime have increased 40% from KRW 30.6 billion to KRW 42.7 billion.

 

In the same period, special sales of Cepha antibiotic APIs soared from KRW 200 million to KRW 1.8 billion.

 

However, exports of cefcapen, cefditoren, and ceftazidime fell 16% from KRW 28.9 billion to KRW 24.2 billion.

 

Yungjin Pharm's antibiotic-related sales have steadily declined until 2021.

 

Its related sales, which reached KRW 102.2 billion in 2019, decreased 42% in two years to KRW 85.6 billion in 2020, then to KRW 59.6 billion in 2021.

 

However, sales made a successful rebounded last year.

 

It is analyzed that this is due to the increase in prescriptions to relieve COVID-19-related symptoms in line with the surge in confirmed COVID-19 patients in Korea.

 

According to the market research institution UBIST, prescriptions of oral cephalosporins last year were KRW 259.6 billion, up 33.4% from the previous year.

 

The ‘cepha antibiotics,’ or cephalosporins are widely used antibiotics for pneumonia, laryngopharyngitis, tonsillitis, and bronchitis.

 

The situation has turned drastically from the first and second years of COVID-19.

 

The cephalosporin antibiotic prescription market, which was worth KRW 271.1 billion in 2019, shrank to KRW 211.5 billion in 2020, then to KRW 194.6 billion in 2021.

 

In the early phases of COVID-19, the market shrank greatly with the plummeting number of cold and flu patients, but last year, along with cough and cold preparations, their use for the purpose of relieving COVID-19 symptoms increased explosively.

 

◆Presciptions rise 33% in 1 year...companies that pondered market withdrawal breathe a sigh of relief Other cepha antibiotic manufacturers also experienced a similar situation.

 

In particular, companies that had been considering withdrawing their businesses due to a steady decline in sales until the previous year were able to take a breath of relief.

 

Boryeong's sales related to cepha antibiotics shrank from KRW 25.3 billion in 2019 to KRW 20.4 billion in 2020.

 

However, sales rebounded to KRW 21.7 billion last year.

 

Korus Pharm has been manufacturing cepha-class antibiotics such as Korus Cefaclor, Korus Ceftriaxone, K Axone, Cefozol, etc.

 

The company’s combined antibiotic sales decreased 24% in 2 years from KRW 6 billion in 2019 to KRW 4.5 billion in 2021, but rebound to 5.3 billion last year.

 

Withus Pharm’s Withus Cefaclor Cap’s sales fell to KRW 0.6 billion in 2020 from KRW 1.5 billion in 2019, then increased over threefold in 2 years to reach KRW 2.1 billion last year.

 

Withus Pharm’s antibiotic sales, including Cefaclor Cap, increased 2.5 times in 2 years from KRW 2 billion in 2020 to KRW 5 billion last year.

 

Daewoong Bio also saw its cepha antibiotic Ceclor’s sales increase 32% from KRW 7.4 billion in 2021 to KRW 9.8 billion last year.

 

In addition, finished cepha antibiotic products from Kyungbo Pharmaceuticals, Kukje Pharm, and Jeil Pharm increased last year.

 

However, Kyungbo’s sales of cepha-class antibiotic APIs decreased 4% from KRW 37.6 billion in 2021 to KRW 36.3 billion.

 

◆”Rise in cepha-class drugs temporary...still not profitable” This is in contrast to the years 2020 and 2021 when many companies were contemplating whether to withdraw their cepha antibiotic business.

 

In 2020, a large pharmaceutical company A decided to discontinue consignment production of cephalosporin antibiotics.

 

Company A has stopped manufacturing products contracted by other pharmaceutical companies and is only currently producing only its products.

 

Another large pharmaceutical company, B, put up its cephalosporin antibiotic manufacturing plant for sale last year.

 

A few companies considered taking over, but pharmaceutical company B withdrew its intention to sell.

 

Company C, a mid-sized pharmaceutical company, also contemplated withdrawing from the cepha antibiotics business last year.

 

On the surface, the company pointed to the decrease in prescriptions of cephalosporin antibiotics in the process of prolonged COVID-19, but the analysis was that the chronic deterioration of profitability caused them to consider withdrawing from the business.

 

In line with the trend, the industry anticipates the companies’ withdrawal from the cepha antibiotics business will be repeated this year.

 

Front-line companies all agree that the deteriorating profitability of antibiotics will not improve due to the rising cost of APIs day by day, while supply prices are unchanged under Korea’s health insurance.

 

The price of APIs of cephalosporin antibiotics imported from China and India has risen by 10-20% during the past 2 years.

 

On the other hand, the reimbursed product prices have stayed the same for a long period of time.

 

The fact that the government is constantly trying to reduce antibiotic prescriptions is also cited as a reason for the deteriorating profitability.

 

The antibiotic prescription rate for acute upper respiratory infections has decreased from 52% in 2010 to 36% in 2020.

 

An official from a pharmaceutical company that produces cepha antibiotics said, “We have almost no profit gain from the manufacture of 1st and 2nd generation cephalosporin antibiotics.

 

Labor costs have also risen significantly, so it is difficult to make any profit.”