Dong-A ST Charts Growth Path in the Hormone Market with Key Projects

Dong-A ST, a prominent player in the pharmaceutical industry, recently unveiled its ambitious growth strategy in the burgeoning growth hormone market. The company's plans, presented during an Investor Relations (IR) event in Seoul, encompass a range of exciting projects set to shape its future over the next few years. These include the anticipated expansion of 'Growtropin' growth hormone sales, the introduction of Stelara biosimilars, and advancements in the development of a groundbreaking treatment for Nonalcoholic Steatohepatitis (NASH).

The linchpin of Dong-A ST's revenue outlook for the next 3 to 5 years is the 'Growtropin' growth hormone. Sang-jin Lee, Senior Researcher at Dong-A Socio Holdings, discussed how the transfer of the Diagnostic Business Unit to subsidiary Chammedeu in January caused a temporary revenue dip of approximately $37 million. Nevertheless, a robust surge in sales within the specialized pharmaceuticals (ETC) sector is poised to bridge this gap and bolster profit margins. Lee also highlighted the promising growth trajectory of Growtropin within the ETC sector.

The South Korean growth hormone market, which tallied around $148 million in sales last year, is now on a rapid upward trajectory, expected to reach $222 million this year. This growth is driven by parents increasingly turning to growth hormone treatments for their children, aligning with trends in "mom internet cafes." Lee elucidated that these cafes encourage parents to opt for a "3-set package," encompassing vision correction, dental braces, and height enhancement, irrespective of their children's existing height.

Forecasts suggest that Growtropin sales are on track to hit a maximum of $740 million this year. Lee commented, "In 2021, Growtropin's sales hovered around the $300 million mark, but last year saw it climb to approximately $450 million." He added, "This year, we are optimistic that it could reach a substantial range between $670 million and a maximum of $740 million." Market analyses presented on the day indicate that Dong-A ST is poised to maintain its position as the second-largest market player, with a market share estimated to reach around 30% by year-end, trailing LG Chem's 'Eutropin.'

When questioned about competition against weekly-administered growth hormones like Ngenla, the Senior Researcher responded, "In our discussions with specialists, we received mixed evaluations of Growtropin's competitiveness compared to Ngenla. Three specialists expressed positivity, three remained neutral, while four leaned towards a negative assessment." According to the Senior Researcher, one contributing factor to Growtropin's favorable performance is its reduced pain during administration compared to Ngenla, promoting higher patient compliance and bolstering sales.

He further elaborated, "It typically takes 2 to 3 years for users to perceive comparable height gains between Ngenla and Growtropin. During this period, we anticipate sustained growth in Growtropin sales." Additionally, he revealed, "Dong-A ST is actively developing a once-weekly oral form of growth hormone."

Dong-A ST anticipates that 'DMB-3115,' a biosimilar of 'Stelara,' will become a pivotal revenue driver by 2025. According to the company's projections, DMB-3115 is slated for launch in March 2025, coinciding with Celltrion's 'CT-P43,' a similar drug.

The Senior Researcher stated, "The introduction of DMB-3115 is anticipated to generate approximately $15 million in operating profits," and he emphasized, "This level of profit is expected to remain steady, even in the presence of competing products."

The $15 million operating profit estimate is based on an anticipated market share of around 5% and revenue-sharing arrangements with partners. The Senior Researcher clarified, "Stelara's current market size stands at $17 billion, projected to reduce to approximately $7.4 billion post-biosimilar launch." He continued, "DMB-3115 is expected to capture a 5% market share, translating to approximately $370 million in sales. After dividing the $740 million royalty fee from sales agent Intas in India among Meiji Seika Pharma, Dong-A Socio Holdings, and Dong-A ST, Dong-A ST's share is estimated at $15 million."

Dong-A ST's third major endeavor involves the development of a potential NASH (Nonalcoholic Steatohepatitis) treatment candidate named 'DA-1241.' DA-1241, a GPR119 agonist, targets the upper signaling pathways of GLP-1 and GIP, expected to positively impact all three primary pathological aspects of NASH: inflammation, steatosis (fatty liver), and fibrosis, with particular emphasis on fibrosis.

Recognizing the significance of fibrosis-related markers and fibrosis PD (Pharmacodynamics) markers in NASH drug development, the Senior Researcher explained, "Given the positive effects of DA-1241 on fibrosis, we have chosen fibrosis-related indicators as the primary endpoints for our ongoing Phase 2 clinical trial in the United States." He added, "For fibrosis PD markers, we have opted for non-invasive blood-based markers instead of invasive biopsies, streamlining patient recruitment and the progress of our Phase 2 clinical trial."

Dong-A ST's plan for DA-1241 post-Phase 2 clinical trials involves licensing-out (L/O). The Senior Researcher noted, "We anticipate receiving the results of the Phase 2 clinical trials in the United States during the latter half of next year," and he concluded, "Upon obtaining clinical results, our initial licensing-out phase will commence, as several interested partners are eagerly awaiting them."