Daewoong Pharmaceutical has surpassed market expectations with its second-quarter financial results, driven by robust growth in its digital healthcare segment and sustained sales of its botulinum toxin product, Nabota. The company’s strategic expansion into the middle East and the success of its new ventures are contributing to a positive outlook for the latter half of the year.
According to a report released on the 31st by the Korea Investment & Securities Research Institute, Daewoong Pharmaceutical’s second-quarter sales (April-June) reached 363.9 billion won, marking a 12% increase year-on-year. Operating profit also saw a importent rise, reaching 62.5 billion won, with an operating profit margin of 17.2%. These figures exceeded market consensus estimates by 5% and 7%,respectively.
A primary driver of this strong performance was the digital healthcare sector. This segment, which includes products like the continuous glucose monitor Libre, the wearable electrocardiogram patch Mobi Care, and the ward management solution THYN C™, experienced a remarkable 103% year-on-year growth, generating 12.4 billion won in sales. The high profit margins associated with these digital health offerings also contributed to an increase in the company’s gross margin.
Nabota, Daewoong Pharmaceutical’s botulinum toxin product, also played a crucial role in the company’s success. In the second quarter, Nabota recorded sales of 69.8 billion won, a 31% increase compared to the same period last year. For the first half of the year, cumulative sales of Nabota reached 115.4 billion won, up 28% year-on-year, indicating a strong trajectory towards exceeding 200 billion won in annual sales.The global expansion of nabota is particularly noteworthy. Daewoong Pharmaceutical recently secured an export contract with Kuwait, marking its entry into four out of six target countries in the region.Kuwait, with its high per capita GDP of approximately $32,000, is considered a strategic market with significant demand for aesthetic treatments. This expansion is expected to pave the way for broader market penetration across the Middle East.
The company’s digital healthcare strategies are also yielding positive results. Daewoong Pharm has set an ambitious goal of introducing its ward management system, THYN C™, in 78% of domestic hospital beds and has already surpassed its first-half internal targets. The system has garnered positive feedback from the medical community for its technological capabilities in improving emergency patient response.
Moreover,the prescription of urusa (UDCA),a medication used for gallstone prevention,has benefited from the growing trend of GLP-1 series weight loss treatments. As per US and European guidelines, UDCA is recommended for individuals experiencing rapid weight loss, leading to an increase in its prescriptions within Korea.
In light of these positive developments, Korea Investment & Securities has revised its annual earnings forecast for Daewoong Pharmaceutical upwards. The firm now projects FY25 sales to reach 1.39 trillion won (+10%) and operating profit to hit 204.2 billion won (+25%), representing a 2% and 5% upward revision, respectively.
Despite a temporary dip in stock prices following the earnings announcement, attributed to concerns about a potential peak, operating profit is anticipated to grow by over 20% in the second half of the year. Consequently, the investment opinion and target price have been maintained at 250,000 won.
meanwhile, Daewoong Pharmaceutical’s US partner for its botulinum toxin, Evolus, is scheduled to release its second-quarter earnings report. The demand for additional product volume from Evolus, driven by the successful bundling of filler sales, makes its financial performance a key indicator of Daewoong Pharmaceutical’s global growth potential.
