Daewoong Pharmaceutical (069620.KS) is expected to post second-quarter results exceeding market expectations, driven by expanding exports of its botulinum toxin, according to a forecast. While sales of Fexuclue, a treatment for gastroesophageal reflux disease, slowed somewhat, toxin shipments offset the decline and led the earnings improvement, analysts said.
According to the industry on the 13th, Daewoong Pharmaceutical's second-quarter revenue on a consolidated basis was forecast at 407.1 billion won, with operating profit at 72.9 billion won. These figures are 42% and 26% higher than market consensus, respectively.
Expanding botulinum toxin exports were cited as the reason behind the earnings improvement. Toxin shipments increased, centered on Brazil, Thailand and Canada, expanding the export share, analysts said. In particular, partner Evolus secured next year's volume in advance to respond to uncertainty over pharmaceutical tariffs, which boosted shipment volumes, according to the analysis.
Meanwhile, Fexuclue sales were expected to reach 17 billion won, down 21% from the same period last year. Digital healthcare division revenue was also forecast at 16.3 billion won, a 31% decline. However, the increase in toxin exports offset these declines, and the overall earnings improvement is expected to continue, analysts said.
Strong toxin exports are expected to continue in the second half. Korea Investment & Securities projected annual revenue of 1.5626 trillion won and operating profit of 261.1 billion won this year, raising its previous forecasts by 1.0% and 16%, respectively. It projected third-quarter operating profit of 101 billion won, which would mark a record high on a quarterly basis.
The investment point is the outcome of obesity drug development in the second half. The company is set to release clinical results for its microneedle-based obesity treatment, and whether digital healthcare product sales will expand was also cited as a key variable.
"The second-quarter earnings improvement is largely due to a faster-than-expected increase in toxin exports," said Wi Hae-joo, an analyst at Korea Investment & Securities. "In the second half, along with toxin growth, the clinical results of the obesity treatment will be an additional factor for further gains in corporate value."
