Considering the high demand for oral products in Japan and the patent expiration dates, Samchundang Pharm has signed a term sheet with a Japanese pharmaceutical company for an exclusive sales agreement in Japan for two products of oral GLP-1 (semaglutide) treatments for obesity and diabetes.
This agreement will commence sales from the point of semaglutide's material patent expiration in Japan, with 50% of the profits paid to Samchundang Pharm, and the contract period is 10 years with an automatic extension. This is a strategy that considers the expansion potential and high growth of the Japanese market. Especially, the Japanese semaglutide market recorded sales of approximately 580 billion won in 2023, just three years after launch, with diabetes treatments alone, and is forming a blockbuster market, with growth of more than 90% annually, and is expected to surpass 1 trillion won in 2024. The market size is expected to grow even further with the addition of obesity treatments.
Recent trade negotiations between the U.S. and Japan agreed on mutual tariffs of 15% on automobiles and some agricultural products, but pharmaceuticals were excluded from the tariff imposition. This is due to the decision to exclude essential medicines and medical supplies from the application of tariff policies, and it is interpreted as a measure to address the side effects of rising drug prices and worsening supply shortages that could occur if tariffs are imposed on pharmaceuticals. There has been no official announcement from the Japanese government regarding changes in pharmaceutical tariff policies to date, and it appears that there will be no direct negative impact on Samchundang Pharm's entry into the Japanese market and its business plans.
However, since it is difficult to predict changes in the global trade environment and policies of each country, it is important for Samchundang Pharm to continuously monitor changes in Japan's tariffs and customs regulations and prepare for potential risks.
In addition to entering the Japanese market, Samchundang Pharm is developing various pipelines. In particular, the oral GLP-1 formulation 'SCD506' is attracting great interest in the global market as an obesity treatment, and it has a differentiated feature of being developed as an oral formulation, not an injection, to improve convenience. In addition, 'Eylea' biosimilar 'SCD411', an ophthalmic disease treatment, is also a major pipeline and is attracting attention as a future growth engine for Samchundang Pharm.
Samchundang Pharm is negotiating agreements with pharmaceutical companies in other regions, as well as the United States and Japan, and is expected to further strengthen its position in the global market. In particular, successful establishment in the Japanese market is expected to contribute significantly to the company's sales and profits in the future, which is expected to have a positive impact on Samchundang Pharm's stock price.
Samchundang Pharm's entry into the Japanese market will focus on oral GLP-1 treatments, which is a strategic move considering the high demand in Japan and the patent expiration date. While the changes in Japan's tariff policies announced to date are not expected to directly affect pharmaceuticals, continuous attention and preparation are required in consideration of the uncertainty of the global trade environment. It is expected that Samchundang Pharm will strengthen its competitiveness in the global pharmaceutical market, beyond success in the Japanese market, through innovative pipelines and the expansion of global partnerships.
Q1: What is the main reason for Samchundang Pharm to enter the Japanese market?
A1: It is because the company highly valued the marketability considering the high demand for oral GLP-1 treatments in Japan and the patent expiration date of the formulation.
Q2: What is the impact of changes in Japan's tariff policies on Samchundang Pharm's business?
A2: Since the changes in Japan's tariff policies announced to date do not directly affect pharmaceuticals, the impact on Samchundang Pharm's business is expected to be minimal.
Q3: What are Samchundang Pharm's main new drug development pipelines?
A3: Oral GLP-1 treatment 'SCD506' and ophthalmic disease treatment 'Eylea' biosimilar 'SCD411' are the main pipelines.
Q4: What is Samchundang Pharm's future Japanese market strategy?
A4: It plans to expand its market share based on exclusive sales agreements with Japanese pharmaceutical companies, respond to regulatory changes through continuous monitoring, and expand its business.
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