The operating profit to sales ratio of 110 pharmaceutical companies listed on the Korean stock market stood at 12.2 percent in the first half of this year, down slightly from 12.7 percent a year earlier.
In other words, they earned 122 won ($0.11) profit out of 1,000 won ($0.88) revenue on average in the first six months, government data showed. Operating margin, a measure of profitability, can be calculated by dividing operating profit by revenue.
According to the Ministry of Health and Welfare, the 110 listed drugmakers recorded 9.3 trillion won ($8.2 billion) in combined revenue, up 10 percent from a year earlier.
By the company size, revenues of the 52 small- and medium-sized enterprises expanded 12.5 percent, almost 3 percentages higher than 9.7 percent gain in combined sales of the 58 large companies.
Yuhan Corp. recorded the largest revenue in the first half, with sales reaching 719.5 billion won. The company is expected to hit 1 trillion won in annual sales this year, observers said.
GC Pharma ranked second with 540 billion won revenue in the first half, followed by Chong Kun Dang with 455.6 billion won, and Daewoong Pharmaceutical, 454.1 billion won.
In the biopharmaceutical industry, Celltrion’s sales rose 15.2 percent year-on-year, and that of Samsung BioLogics, 50.1 percent, in the first half.
The 110 drugmakers invested 770.2 billion won in research and development (R&D), down 3 percent from a year earlier. The ratio of R&D to revenue also declined by 1.1 percentage points to 8.3 percent.
However, the R&D ratio to revenue at state-designated innovative pharmaceutical companies and venture firms was higher than that of all the listed pharmaceuticals.
At 36 innovative pharmaceutical firms with available public disclosure data, the ratio of R&D to revenue was 10.7 percent. At 28 ventures, the ratio was high at 21.1 percent, although spending in R&D declined by 10.2 percent to 90.9 billion won.
Sales of medical device makers have been on the rise. The combined revenues of 54 listed medical device companies amounted to 1.4 trillion won in the first half, up 7 percent from a year earlier. Their combined operating profits climbed 12.8 percent year-on-year to 200 billion won.
Most of the top medical device companies in sales were dental implant firms such as Osstem Implant, Vatech, and Dentium.
Combined R&D spending at medical device companies expanded 25.9 percent to 121.3 billion won, and the ratio of R&D to revenue was up by 1.3 percentage points to 8.8 percent. R&D at 23 venture firms in medical device amounted to 50.4 billion won, up 22.6 percent from a year earlier. Their R&D ratio to sales was 10.9 percent.