2020 This brochure illustrates a project promoted by Korean pharmaceutical companies and with support from the Korean government, to enter global markets. You’ll meet the Korean pharmaceutical industry as a reliable partner for global collaboration. Contents 02 Current Status of Korean Pharmaceutical Market 08 Introduction of Korean Innovative Pharmaceutical Company Certification System 10 Information of Korean Innovative Pharmaceutical Company 55 Supplement Current Status of Korean Pharmaceutical Market Current Status of (Market size) Korean pharmaceutical market passed the $21 billion mark in 2018. Its Korean Pharmaceutical Market growth has been driven by leading Korean companies, which have been releasing new global drugs and achieving technology exports. Pharmaceuticals exports have increased at a CAGR of 17.9% for the past five years (2014-2018), fueled especially by increases in Korean drugs entering into global markets. Current status of Korean pharmaceutical market (unit: million dollar, %) Year-on-year CAGR Category 2014 2015 2016 2017 2018 growth rate (’14~’18) Market size 18,396 16,963 18,712 19,508 21,004 7.70% 3.40% Production 15,593 14,991 16,198 18,000 19,176 6.50% 5.30% Exports 2,416 2,946 3,119 4,069 4,673 14.80% 17.90% Imports 5,219 4,918 5,633 5,577 6,501 16.60% 5.60% Trade balance △2,803 △1,972 △2,514 △1,508 △1,828 △21.2% △10.1% * Source: Press release by the Ministry of Food and Drug Safety (July 29 2019) • ‌The 2018 sales revenue of the listed drug companies (125) is $18,172 million in total (7.5% up from the previous year), with Top 10’s revenue at $7,814 million (8.6%↑). * ‌'18 sales revenue (based on consolidated financial statements) : (Yuhan Corporation) $1,362 million, (Korea Kolmar) $1,181 million, (GC Green Cross) $1,181 million, (Guangdong Pharmaceutical) $1,090 million, (Daewoong Pharmaceutical) $908 mil- lion, (Hanmi Pharm) $908 million - ‌4 domestic companies are among the top 150 pharmaceutical companies in the world based on pre- scription drug sales. * ‌'18 prescription drug sales and global ranking (Evaluate 2019): Daewoong Pharmaceutical (111th, $ 844 million), Hanmi Pharmaceutical (119th, $ 773 million), Yuhan Corporation (122th, $ 762 million), Green Cross (139th, $ 563 million) ‌• ‌The Korean biologics market is valued around $2,026 million (2018), accounting for 10.2% of the entire pharmaceutical market, which is lower than the international level (28.2% in 2018). - ‌Yet it has very high growth potential, with its production and export values rising greatly at a CAGR of 4.3% and 4.6% respectively, for the last five years (2014-2018). - ‌In particular, the biopharmaceutical trade balance has been surplus for four consecutive years following 2015 year due to the increase in exports. - ‌Biosimilars in particular are expected to become a next-generation growth engine as 15 of the 20 drugs approved in Korea were developed by Korean companies. * ‌With the focus on biopharmaceutical pharmaceutical companies such as Samsung Biologics and Celltrion, the world's largest biopharmaceutical production facility is being built and in operation (production capacity of 560,000L, more than 70 companies) Current status of Korean biopharmaceutical market (unit: million dollar, %) Year-on-year CAGR Category 2014 2015 2016 2017 2018 growth rate (‘14~’18) Market size 1,885 1,449 1,577 1,974 2,026 2.6% 2.4% Production 1,597 1,520 1,729 2,300 2,372 3.1% 4.3% Exports 589 809 1,063 1,368 1,559 14.0% 4.6% Imports 877 738 911 1,042 1,213 16.4% 3.3% Trade balance △288 71 152 326 345 5.8% - * Source: Press release by the Ministry of Food and Drug Safety 2 Korean Pharmaceutical Market Current Status of (Current status of businesses) 571 (72%) of 798 pharmaceutical companies in Korea reported production records for 2018, indicating an average production of 45 items per company. Current status of Korean pharmaceutical companies (unit: number, %) CAGR Category 2014 2015 2016 2017 2018 (‘14~’18) Number of manufacturers 851 782 845 806 798 △1.6 Manufacturers with 678 597 599 588 571 △4.2 production records Number of items 29,218 25,890 26,397 26,293 25,939 △2.9 Drug product 18,357 17,907 18,546 19,291 19,239 1.18 Drug substance 10,861 7,983 7,851 7,002 6,700 △11.4 Number of sellers 23,261 24,693 25,862 24,951 26,233 3.1 * Source: Press release by the Ministry of Food and Drug Safety (Current status of R&D) Striving to enhance competitiveness to the level of advanced countries by launching new drugs developed in Korea in overseas markets through the continuous expansion of R&D investments • ‌The total R&D investment by the pharmaceutical companies listed in Korea (125 companies) was $1,423 million in 2018, which accounts for 7.7% of the total sales. - ‌The R&D investment by the top 10 companies was $787 million, which is more than half of the total amount of R&D investment by all the listed pharmaceutical companies, reaching 10.0% of the total sales. - ‌The total R&D expenditure of domestic listed innovative pharmaceutical companies (37 companies) accounted for 74% of total listed companies and the proportion of R&D expenses was 9.3%. R&D investment of major Korean pharmaceutical companies (unit: million dollar, %) Category 2014 2015 2016 2017 2018 Listed companies 932 975 1,152 1,394 1,423 R&D Top 10 companies 510 557 712 798 787 investment Innovative Pharmaceutical Company 744 798 932 1,125 1,059 Listed companies 7.0% 7.1% 7.8% 8.3% 7.7% Ratio to Top 10 companies 10.6% 10.2% 12.1% 11.1% 10.0% sales Innovative 8.6% 8.6% 9.5% 10.7% 9.3% Pharmaceutical Company * Source: Korea Health Industry Development Institute (KHIDI) • ‌Due to the increase in the elderly population and chronic diseases, the biopharmaceutical industry, such as cell therapies and gene therapies, continues to expand due to the growing demand for medicines. - ‌It is expected that the number of licenses will increase after the establishment of the conditional approval system with 15 items of domestic cell therapies approved by Sewon Cellontech's 'Condron' ('01') until '18. * ‌It is a new permit system for cell therapy products for the treatment of life-threatening diseases or severe irreversible diseases (Press release by the Ministry of Food and Drug Safety, July 2016). - Currently, 7 in stem cell therapies of all items have been released worldwide, of which 4 are developed domestically. * (Pharmicell) Hearticellgram-AMI, (Medipost) Cartistem, (Antrogen) Cupistem, (Corestem) Neuronata-R 3 Current Status of (Current status of new drug development) A total of 29 new drugs were developed as of Korean Pharmaceutical Market December 2019 by these efforts of Korean pharmaceutical companies. * 1999-2014: 21 new Korean drugs were developed → 2015-2018: 8 new Korean drugs were developed. New drugs developed since 2015 Company Product Efficacy/Effectiveness Approval Date Crystal Genomics Inc. Acelex Capsule Treatment for osteoarthritis February 5, 2015 DongWha Pharm. Co., Ltd. Zabolante tablet Antimicrobial agent (antibiotics) March 20, 2015 Sivextro tablet Dong-A ST Co., Ltd. Antimicrobial agent (antibiotics) April 17, 2015 Sivextro injection Dong-A ST Co., Ltd. Suganon tablet Antidiabetic drug October 2, 2015 Hanmi Pharmaceutical Co., Ltd. Olita tablet Cancer drug (lung cancer) May 13, 2016 Ildong Pharmaceutical Co., Ltd. Besivo tablet Hepatitis B treatment May 15, 2017 CJ Healthcare K-Cab Tab gastroesophageal reflux disease (GORD) July 5, 2018 (Overseas market entry) Korean companies are creating high value-added through the expansion of their global market shares by launching domestically-developed new drugs in the global market and increasing licensing-out to overseas markets. ‌• ‌15 Korean drugs have obtained approval in the US and EU since 2014, putting sales to developed markets into high gear. - ‌SK Biopharm independently proceeded to the third phase of clinical trials and released it to the United States following new drugs developed in Korea, such as XCOPRI (‘19), which was approved by the FDA. Current status of domestically-developed drugs in terms of approval at home and abroad Reference Drug Approved in Approved Overseas Company Trade Name Efficacy/Effectiveness (Manufacturer) Korea EMA FDA Dong-A ST Co., Ltd. Sivextro* New drug Oxazolidinone antibiotic Apr 2015 Mar 2015 Jun 2014 Merrem Daewoong Meropenem** (AstraZeneca) Carbapenem antibiotic Apr 2010 - Dec 2015 Pharmaceutical Co. Ltd. Botulinum toxin Nov 2013 - Jan 2019 Nabota** (Allergan) Glabellar wrinkles Remicade Rheumatoid arthritis (RA), Remsima* (Johnson & Johnson) ulcerative colitis, etc. Jul 2012 Aug 2013 Apr 2016 RA, chronic lymphocytic Truxima* Rituxan leukemia, non-Hodgkin’s Nov 2016 Feb 2017 (Roche) lymphoma, etc. Celltrion Inc. Herceptin Jan 2014 Feb 2018 Dec 2018 Herzuma* (Roche) Breast cancer Zyvox Tuberculosis, - - Apr 2019 Linezolid** (Pfizer) Wide range of antibiotics Zeffix (GSK), - - Nov 2018 TEMIXYS Viread (Gilead) AIDS 4 Korean Pharmaceutical Market Current Status of Reference Drug Approved in Approved Overseas Company Trade Name Efficacy/Effectiveness (Manufacturer) Korea EMA FDA Benepali (EU)* Eticobo (US)* Enbrel RA, psoriasis, etc. Sep 2015 Jan 2016 Apr 2019 Etoloce (Korea)* (Amgen) Flixabi (EU)* Renflexis (US)* Remicade Remaroche (Johnson & Johnson) RA, ulcerative colitis, etc. May 2016 May 2016 Apr 2017 Samsung Bioepis (Korea)* Co., Ltd. Imraldi (EU)* Hadlima (US)* Humira RA, Crohn's disease, Adalloce (AbbVie) inflammatory bowel Sep 2017 Aug 2017 July 2019 (Korea)* diseases, etc. Ontruzant(EU)* Samfenet Herceptin Breast cancer Nov 2017 Nov 2017 Jan 2019 (Korea)* (Roche) SK Chemicals AFSTYLA New biologic Antihemophilic drug - Jan 2017 May 2016 SK Biopharm Sunosi New drug Sleep disorder - - March 2019 aceuticals XCOPRI® New drug Epilepsy - - Nov 2019 * ‌Source: Korea Health Industry Development Institute (KHIDI) (The * mark for the trade name indicates biosimilars, and ** mark for the trade name indicates generic medicine.) ‌• ‌Large-scale license agreements with global pharmaceutical companies are accelerating exports of technologies developed by Korean pharmaceutical companies.