Daewoong Pharm slips to red in Q2 due to botox lawsuit costs

2020.07.31 11:55:21 | 2020.08.03 15:34:12

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South Korea`s Daewoong Pharmaceutical Co. slipped to a loss in the second quarter that had the drug maker preoccupied with lawsuits at home and the United States over botulinum toxin products.

The company announced in regulatory filing on Thursday that it reversed to an operating loss of 4.7 billion won ($3.95 million) from profits in the previous quarter and the previous year. Sales declined 1.1 percent on quarter and 14.2 percent on year to 226 billion won.

Its bottom line booked a loss of 12.6 billion won, extending loss from the previous quarter and reversing from a profit of 12 billion won a year ago.

Daewoong Pharm shares fell 1.79 percent to close at 110,000 won on Friday.

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Early in July, the U.S. International Trade Commission (ITC) sided with its Korean rival Medytox in the years-long dispute, advising imports of Daewoong Pharm’s botox products be banned in the U.S. over the next 10 years. The verdict comes amid a decline in sales of Daewoong’s botox product Nabota overseas due to the COVID-19 pandemic. What made matters worse was a temporary sales ban of the company’s ranitidine generic brand after traces of cancer-causing contaminants in the heartburn and acid-reducing drugs were detected.

Daewoong Pharm spent 29.6 billion won on R&D in the April-June period, up 22 percent from a year ago. That accounted for 13.1 percent of its total revenue.

Among the company’s prescription drugs, Diabex sales soared 33.4 percent on year. Consumer health sales reached 29.6 billion won, up 4.3 percent, driven by upbeat sales of vitamin brand Impactimine.

By Seo Jin-woo and Minu Kim

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