K-Cab & Fexuclu are quickly targeting the global market

Expanded export contracts to 34 countries and 15 countries, respectively

Maximum contract size of 1 trillion won

New drug products developed by domestic pharmaceutical companies with their own technologies are accelerating their targeting in the global market.

 

However, some point out that it is difficult to predict commercial success because there are many variables such as the situation of the local market even if they have reserved to enter the overseas market.

 

◆K-Cab Expands to 34 Export Contracting Countries...Maximum contract size of ↑1 trillion won According to the industry on the 11th, HK inno.N signed a contract with Indian pharmaceutical company Dr.

 

Reddy's Laboratories to export new K-Cab for gastroesophageal reflux disease.

 

Seven countries have signed export contracts, including India, South Africa, Russia, Kazakhstan, Uzbekistan, Ukraine and Belarus.

 

With this contract, the number of countries where K-Cab has entered the market in the form of technology exports or finished product exports has increased to 34.

 

HK inno.N signed a technology export contract with Chinese pharmaceutical company Luoxin for K-Cab in 2015.

 

It is a condition to receive $18.5 million in technical fees for each stage according to down payment, clinical development, permission, and commercialization.

 

The company estimated that if royalties from sales occur after local commercialization, the contract will rise to $95.29 million.

 

In February 2019, HK inno.N signed an export contract for K-Cab with Mexican pharmaceutical company Laboratorios Carnot to 17 Latin American countries.

 

It is worth $84 million over 10 years, including the amount of supply of products.

 

Export contracts have become more active since K-Cab was released in Korea.

 

In September 2019, contracts were signed to supply finished drugs to Indonesia, Thailand, and the Philippines, and in 2020, export contracts were signed to Mongolia and Singapore.

 

Last year, it signed export contracts for Vietnam, Malaysia, the U.S., and Canada.

 

The largest export contract of K-Cab is technology exports signed with U.S.

 

company Braintree Laboratories Inc.

 

in February, with a contract size of up to $540 million.

 

The company explained that K-Cab's export contract will exceed KRW 1 trillion.

 

◆Fexuclu, export contract to 15 countries, maximum Contract Size 1.2 Trillion Among the new drugs developed in Korea, Daewoong Pharmaceutical's Fexuclu is showing the most active entry into the overseas market.

 

Fexuclue is a potassium competitive gastric acid secretion inhibitor (P-CAB)-based gastroesophageal reflux disease treatment drug, which is the same as K-cap.

 

It received domestic permission at the end of last year and is expected to be released in the second half of this year.

 

Through six export contracts, Daewoong Pharmaceutical has booked Fexuclu exports to 15 countries including North America, Latin America, China and the Middle East.

 

Daewoong Pharmaceutical began to enter Latin America in 2020 by handing over the local permission and sales rights of Fexuclu to Mexican pharmaceutical company and Brazilian pharmaceutical company EMS, respectively.

 

In March last year, it signed an export supply contract worth about 384.5 billion won with Shanghai Haini of China.

 

In June last year, it handed over Fexuclu's right to develop, license, and sell in the U.S.

 

and Canada.

 

Under the contract, Daewoong Pharmaceutical secured a 5% stake in Neurogastrx as an upfront fee and was guaranteed up to $430 million in the name of a step-by-step technology fee (milestone) for development, licensing and commercialization stages.

 

Daewoong Pharmaceutical was promised to enter 10 countries in Latin America and the Middle East through two export contracts last year.

 

Daewoong has secured up to 1.2 trillion won through Fexuclu's export contract.

 

◆ There are many cancellations and returns after the export contract Variables such as changes in the local market environment The industry expects K-Cab and Fexuclu to achieve commercial results in overseas markets.

 

Domestic new drug products have tapped overseas markets in various ways, but have yet to produce successful cases.

 

This is because even if an export contract is signed, the export contract does not guarantee commercial performance due to the nature of taking a considerable amount of time to sell through local licensing procedures.

 

Overseas drug expansion is largely divided into technology transfer and exports of finished drugs.

 

Technology transfer is a structure in which partner companies are in charge of commercializing products that have not yet been developed.

 

Technology transfer is often terminated or rights returned depending on the partner company's intention to develop or the marketability of drugs.

 

The contract for the supply of finished drugs is a structure in which exporters sell products that have succeeded in commercialization abroad.

 

Although it is evaluated that the success rate of contract implementation is relatively high compared to technology transfer, there may be a number of cases that are terminated depending on local circumstances.

 

The export contract between K-Cab and Fexuclu has a large proportion of completed drug supply contracts.

 

It is a structure in which profits are generated only when sales are made through overseas local licensing procedures.

 

In the case of K-Cab, it received Chinese permission last month and is expected to make full-fledged overseas sales are expected.

 

Fexuclu is in the process of licensing items in the Philippines, Indonesia, and Thailand.

 

Another variable is that the down payment already secured is not large.

 

Although HK inno.N did not disclose the amount of down payment secured by K-Cab's export contract, it is known to be insignificant compared to the total size of the contract.

 

There are two down payments secured through the Fexuclu export contract disclosed by Daewoong Pharmaceutical.

 

In March last year, 6.8 billion won in advance received from Shanghai Haini was the largest.

 

Daewoong Pharmaceutical's 5% stake from Neurogastrx was valued at 4 billion won as of the end of last year.

 

An industry official said, "Even if finished drugs are already well-selling in Korea, various unexpected variables such as changes in the market environment will inevitably occur in overseas markets," adding, "Even if there is no problem with the product, it is highly likely that they will not achieve the export target set in the first place."