|Huons CEO Um Key-an speaks during an interview with The Korea Times at the pharmaceutical firm's headquarters in Seongnam, Gyeonggi Province, Oct. 2. Korea Times photo by Choi Won-suk|
By Nam Hyun-woo
SEONGNAM, Gyeonggi Province ― Drug makers often pin their hopes on developing a blockbuster drug, which becomes extremely effective and serves as a long-time stable revenue source.
This is not the case for Huons. Though no iconic product pops up when the company's name is mentioned, the midsize pharmaceutical firm has been logging stable growth for the past several years, while top drug makers in Korea have been experiencing a slowdown in their earnings.
Huons CEO Um Key-an attributed this to the company's diversified portfolio, and said this will help the company consolidate its status as a comprehensive healthcare provider in the near future.
"Huons has strengths and weaknesses at the same time," Um said during an interview with The Korea Times at the company's headquarters in Seongnam. "We don't have a blockbuster drug, that is clearly a weakness, but at the same time we don't have risks stemming from a heavy reliance on such a popular drug."
A blockbuster drug refers to a medicine posting more than $1 billion in annual sales. In Korea, however, pharmaceutical firms often use the term for a drug posting more than 10 billion won ($8.35 million) in domestic sales annually.
Huons posted 169.3 billion won in sales in the first half of the year, up 9.8 percent from 154.2 billion won a year earlier. Thanks to Huons' contribution, its holding firm, Huons Global, also logged a record-high 209.6 billion won in consolidated sales.
Um attributed this to the company's broad portfolio.
"In the first half sales, contract manufacturing and direct sales each showed a 10 percent growth, overcoming a slowdown in our revenue from exports," Um said.
"We are an assertive company. Some businessmen talk about concentration, but that is not the case for us. We offer pharmaceuticals, cosmetics, contract manufacturing, functional foods, medical devices and a slew of other businesses related to healthcare, and our goal is to become a comprehensive healthcare company."
Diabetics, especially those suffering type 1 diabetes which leads to insufficient production of insulin, check their glucose levels by taking blood samples up to 10 times a day.
With the device, however, a sensor attached to the patient's body sends a glucose reading to his or her smartphone every five minutes. Through this, patients can monitor their glucose level precisely and continuously, allowing them to take insulin at the right time.
Huons has been importing the Dexcom G5 to Korea since November last year, and recently won National Health Insurance coverage for the device if it is used for patients with type 1 diabetes. Um said when the coverage takes effect on Jan. 1 next year, these patients can save up to 3 million won in medical costs.
Along with the monitoring device, Huons will sell the wearable insulin pump, EOPatch, by EOFlow next year, and is working with the developers of the device so the two can be linked and control a patient's glucose level automatically.
"The number of diabetes patients in Korea continues to grow and the age of people suffering the condition is getting younger," he said. "We assume this is a market of 30 billion won currently, but it is hard to anticipate its worth in the near future, given its immense growth potential."
In its main business of pharmaceuticals, Huons has rolled out its own botulinum toxin, Liztox, on the domestic market in June.
The domestic market for botulinum toxin is valued at 100 billion won, and is already crowded by giants, including Botox by Allergan, Meditoxin by Medytox and Nabota by Daewoong Pharmaceutical among a number of others.
Unlike its rivals, Um said Liztox underwent all Phase 1, 2 and 3 clinical trials in Korea, and thus is more suitable for Koreans; while the company's expertise in making parenteral injections is also an appealing factor.
"It is true that the domestic market is crowded and we are a latecomer," Um said. "So we are betting big on Liztox's sales in the overseas market, which will be valued at 8 trillion won in 2024."
Huons has been exporting the botulinum toxin, under the name Hutox, since 2016 and logged 14.8 billion won in sales in 2017. Since the drug won a domestic license, Um expects it will help the drug's overseas sales to pick up momentum.
|Hutox botulinum toxin|
Another drug Um is pinning his hopes on is dry eye drops, project name HU-007, which is undergoing Phase 3 clinical trials in Korea. After winning patents in Korea and the U.S., Huons plans to release it next year and seek approval for clinical tests in Europe.
Despite the growing demand for treatment for dry eye syndrome, there are only a limited number that have won U.S. Food and Drug Administration (FDA) approval. If the new drug is approved by drug authorities across the world, it will likely be "the first blockbuster for Huons," Um said.
Where did development go?
In recent months, Korean pharmaceutical firms' credibility has been under question, as a number of firms' new drug developments have suffered setbacks after a series of blunders in clinical tests.
Um said this is a signal that Korean drug makers should pay more attention to the development process for drugs.
"When it comes to research and development, Korean pharmaceutical companies have been good at research, in which companies discover a substance and research its efficacy," Um said. "In development, which involves human testing and other processes before manufacturing, however, they have undervalued its importance and the recent incidents show that Korean firms lack experience."
Last month, Helixmith, a domestic biopharmaceutical firm developing a drug for the treatment of diabetic peripheral neuropathy, failed to determine the efficacy of the drug in the Phase 3 clinical trial, as it appeared the medicine may have been administered to the placebo group.
Earlier, Kolon Life Science revealed that its Invossa osteoarthritis gene therapy had different ingredients from those registered and patented during a U.S. clinical trial and saw the drug's domestic sales license revoked in July.
"In advanced markets, drug makers highly evaluate 'no research development only' firms, which acquire a discovered drug substance and develop it into one that can be used and then license it out," he said. "The Korean drug industry should pay more attention to the importance of development."
In line with his view, Um said Huons will not confine itself to an in-house business model, meaning the company could expand its business through M&As.
"As colorful as our portfolio is, Huons believes in the value of open innovation," he said. "We will not focus on a certain business, but will bulk up our businesses as a whole."