Bukwang Pharmaceutical has begun to clarify the roles of its subsidiaries. The company aims to secure cash flow through its existing prescription drug (ETC) business, while its Danish subsidiary, Contera Pharma, will focus on new drug research and development (R&D), and Korea Union Pharmaceutical will handle production and contract manufacturing (CMO). This structure is seen as a strategy to broaden its growth by expanding production capabilities while accelerating new drug development.
According to industry sources on July 17, Bukwang Pharmaceutical is intensifying efforts to enhance its production competitiveness by acquiring Korea Union Pharmaceutical, which includes securing a production line for injectable drugs and antibiotic products.
Typically, establishing a new factory requires significant time for equipment setup and obtaining Good Manufacturing Practice (GMP) approval. However, instead of building a new facility, Bukwang plans to utilize the existing production capabilities of Korea Union Pharmaceutical to alleviate production bottlenecks and improve manufacturing competitiveness.
With this acquisition, Bukwang has added a foundation for producing injectable drugs and antibiotics to its existing solid dosage production system. A company representative stated, "The Korea Union Pharmaceutical plant is a state-of-the-art facility that received GMP approval in 2020," adding, "We expect that our production capacity will increase by approximately 30% following the acquisition."
Notably, Korea Union Pharmaceutical has liquid injectable production facilities that are more than twice the size of Bukwang's. The company anticipates that both the expansion of product offerings and increased plant utilization rates will follow.
Production transition efforts have already begun. Bukwang recently shipped the over-the-counter (OTC) product 'Complex Pajaimjeong' produced by Korea Union Pharmaceutical. This marks the first instance of transferring a product previously outsourced to Korea Union Pharmaceutical. Starting in August, Bukwang plans to produce 'Hard Chewable Tablets' and 'Hard Chewable Easy Tablets,' with additional products set to be transitioned later this year.
Bukwang Pharmaceutical will concentrate on its prescription drug business. The company has a pipeline focused on treatments for diabetic peripheral neuropathy, including 'Dexide' and 'Chioctaside,' as well as antipsychotic and bipolar disorder treatment 'Latuda.' Dexide and Chioctaside are flagship products generating over 10 billion won in annual sales. Latuda surpassed 1 billion won in monthly sales within a year of its launch, becoming a key growth driver in the central nervous system (CNS) sector. There are also expectations for synergy between Bukwang, which has strengths in general hospital sales, and Korea Union Pharmaceutical, which has a contract sales organization (CSO) network.
New drug development is being handled by Contera Pharma, Bukwang's wholly-owned subsidiary since 2014, which specializes in CNS. Currently, Contera is developing 'CP-012,' a treatment for Parkinson's disease morning akinesia, which completed Phase 1b clinical trials in Europe last year and is set to enter global Phase 2 trials in the U.S. and Europe in the second half of this year. The goal is to pursue technology transfer following Phase 2 trials.
Contera Pharma is also expanding its next-generation pipeline. Last year, it signed a collaborative research agreement with Danish pharmaceutical company Lundbeck for RNA-based new drugs and is working on separating its RNA platform business into a new entity (NewCo). The RNA platform is intended to operate as an independent corporation to enhance external investment and global collaboration.
Industry observers view this role clarification as a restructuring aimed at enhancing the competitiveness of each business. Bukwang CEO Jeong Yeong presented a goal at the regular shareholders' meeting in March to achieve 600 billion won in domestic sales and an operating profit margin of over 10% by 2030. Bukwang reported consolidated sales of 160.1 billion won and an operating profit of 1.6 billion won in 2024, transitioning to profitability, and recorded sales of 200.7 billion won and an operating profit of 14.16 billion won last year.
An industry insider noted, "The core of this restructuring is securing cash flow based on key products while separating production and R&D by subsidiary. We can expect both cash generation and improved profitability through proactive investment."
* This article has been translated by AI.
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