SEOUL, Aug. 4 (Yonhap) -- South Korean pharmaceutical companies are looking to overseas markets in order to seek new profit engines, industry sources said Sunday.
According to data by the Korea Pharmaceutical Manufacturers Association, the combined exports of local drug makers rose 46.7 percent on-year to 1.37 trillion won (US$1.2 billion) in 2012, compared with 930 billion won in 2011, surpassing the 1-trillion mark for the first time.
The industry sources attributed the rise in the drug makers' exports to the government's policy to lower drug prices, which took effect in April last year.
The government cut drug prices by an average of 17 percent as part of its efforts to reduce excessive medical outlays that have become a social burden, but the move caused the drug makers to experience losses in operating profits and sales, the sources said.
JW Pharmaceutical Corp. said Wednesday that it has inked a deal with Baxter International Inc., a U.S. firm, to sell its parenteral nutritional products containing a novel formulation of omega 3 lipids.
Under the deal, JW Pharmaceutical will sell the nutritional products through Baxter, which will have exclusive rights to distribute the products globally.
The South Korean firm will receive a $25 million up-front payment, and an additional payment totaling up to $10 million for the achievement of regulatory milestones, along with royalties on future product sales.
The company also has inked a deal to develop a new drug related to the circulatory system with SKK, a subsidiary of Suzuken, one of the leading pharmaceutical wholesalers in Japan.
In mid-July, Boryung Pharmaceutical Co. signed a contract to ship a hypertension drug worth $26 million to Mexico with Stendhal, a Mexican drug company.
Dong-A ST Co. has struck a deal to export an anti-cancer drug worth $1.4 million to Poland with a Polish drug company.
With the expansion of drug exports, the local pharmaceutical companies are scurrying to take over overseas drug makers in an effort to create an overseas presence.
Daewoong Pharma, one of South Korea's leading pharmaceutical companies, said Thursday that it has signed a deal to take over Liaoning Baifeng, a Chinese drug firm, for 18 billion won.
With the acquisition, the South Korean company also plans to build a pharmaceutical factory in Shenyang, a northeastern Chinese city, by the end of 2017 and produce drugs, including antibiotics, at the plant starting in 2018, it said.
In April of last year, the company signed a deal with the Indonesian drug firm PT.infion to establish a joint venture.
Dong-A Socio Holdings Co. set up a Brazilian unit, Dong-A Participacoes LTDA, to enter the Central and South American drug market in February.
The company is also considering acquiring a foreign drug company, with Invent Farma, a Spanish pharmaceutical company, being one of its target companies.