SEOUL - Dong-A Pharmaceutical regained South Korea's top sales spot in the second quarter from vaccine maker Green Cross and expects to continue its sales trend through the year.

Dong-A was boosted by strong sales of its key products, generic atorvastatin Lipinon and generic losartan Cozartan . Sales of the two products surged 43 percent and 26 percent, respectively.

In comparison, over-the-counter drug sales rose only 5 percent from the same year-ago period while medical equipment and test kit sales rose 8 percent.

Thanks to sales of existing products such as antibiotic cycloserine to India and human growth hormone Growtropin to South America, Dong-A's exports jumped 17 percent during the second quarter.

Prescription drugs account for 59.8 percent of the company's sales, followed by energy drink Bacchus with 14.5 percent and OTC products of 11.6 percent.

In the second quarter, Dong-A's sales rose 8 percent from a year ago to KRW 221.3 billion ($190.73 million) while its net profit surged 127.4 percent to KRW 33.1 billion ($28.53 million).

As the year continues, officials said that Dong-A is expected to draw more tangible synergy from its strategic tie up with GlaxoSmithKline, which bought a 9.9 percent stake in Dong-A in May for co-promotion of products. GSK is now the second-largest shareholder in Dong-A following the 10.59 percent share owned by Dong-A Chairman Kang Shin-Ho (Also see "GSK Expands In Korea With Purchase Of 9.9 Percent Equity Stake In Dong-A Pharma" - Scrip, 12 May, 2010.

Dong-A In Talks To Sell GSK Products

Under the May agreement with GSK, Dong-A is gearing up to sell four GSK products - hepatitis B treatments Hepsera (adefovir) and Zeffix (lamivudine), diabetes drug Avandia (rosiglitazone), and benign prostatic hyperplasia therapy Avodart (dutasteride) - to private local clinics, a Dong-A official told PharmAsia News. "The two sides need to talk further for the actual sales of the four products, but we want to sell them as soon as possible."

Dong-A also touted a string of late-stage products in its pipeline during its most recent earnings call. Erectile dysfunction drug Zydena (udenafil) is currently in Phase III trials in the U.S., led by U.S. partner Warner Chilcott, which is seeking an additional indication for lower urinary track symptoms (Also see "Korean Dong-A In Talks With Warner Chilcott For Additional Indications For ED Drug Zydena" - Scrip, 25 May, 2010.). Dong-A also announced its U.S. NDA submission for DA-9701, an herbal extract functional dyspepsia treatment, and enrollment of a U.S. Phase III clinical trial for DA-7218, an oxazolidinone class antibiotic.

Trying to survive a government crackdown on kickbacks - a long-time marketing tool of local Korean pharmas lacking globally competitive products - many local Korean pharma are actively pursuing co-promotion deals with multinationals looking to expand their presence in Korea (Also see "South Korean Pharmas Clamber For Partnerships To Survive Rapidly Changing Environment" - Scrip, 15 June, 2010.).

Daewoong, Yuhan, Green Cross and Hanmi Follow Dong-A In Q2 Sales

While sales of Dong-A, Yuhan and Green Cross rose sharply from a year ago, Hanmi sales dropped 4.5 percent following the passage of laws punishing both contributors and receivers of rebates.

Industry watchers said Hanmi is the biggest victim of the anti-rebate laws passed through the National Assembly in April.

Locally known as "dual punishment laws," hospital and pharma employees could be jailed for up to two years both for accepting and offering rebates (Also see "Korea's Anti-Rebate Laws Seen Sparking More Demand For MNC Products" - Scrip, 3 May, 2010..

Although it lagged behind Dong-A in Q2 sales, Green Cross led first-half sales in Korea - reaching KRW 447.4 billion ($385.59 million) - because of brisk first quarter sales of its H1N1 flu vaccine (Also see "Demand For A/H1N1 Vaccine Catapults Green Cross Into No. 2 Spot In Korea; Company Ramps Up Biosimilar Pipeline" - Scrip, 3 February, 2010.).

"Although we are behind Green Cross in the first half, we will hold the leading position for the whole of this year because our growth base is much more stable than Green Cross," said the Dong-A official, noting that Green Cross beat Dong-A in the first quarter for the first time in more than 40 years because of the "unusually high" demand for flu vaccines.

"We expect to achieve our annual sales target of KRW 900 billion this year from last year's KRW 804 billion. ... We don't see any unusual, unexpected, special benefits for Green Cross like the flu vaccine late last year," the official said.

Green Cross is aiming for a sales target of KRW 790 billion ($680.56 million) for the year. "Last year's demand for the flu vaccine was a special case, I think," a Green Cross official said.

In the long-term, Green Cross should gain momentum from its pipeline, which includes biosimilars, the official said.

Green Cross is one of several local pharmas - including Daewoong Pharmaceutical, Yuhan Corp., Hanhwa, Samsung and LG Life Sciences - trying to claim a solid position in the biosimilar sector (Also see "Demand For A/H1N1 Vaccine Catapults Green Cross Into No. 2 Spot In Korea; Company Ramps Up Biosimilar Pipeline" - Scrip, 3 February, 2010.).

- Peter Chang (p.chang@elsevier.com)

[Editor's note: Green Cross CEO Lee Byung-Keun will participate in a panel discussion on commercial strategy at the 2nd PharmAsia Summit: Taking the Risk Out of Asia (Oct. 25-26, San Francisco). For a list of speakers and topics, click here.]

Korea's Dong-A Regains Top Spot From Green Cross In Q2 Sales

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