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Yuhan Corporation invested more than 179 million dollars in their R&D in 2020, one of the largest among the traditional pharmaceutical companies in South Korea. Yuhan has been maintaining the No. 1 in sales among the Korean pharmaceutical companies for the past several years and constantly been investing the revenue for its future growth. Yuhan’s focus on R&D investments has been productive; they signed multiple license-out deals with international pharmaceutical giants, and recently received conditional approval from the Ministry of Food and Drug Safety (formerly known as Korean FDA)or Leclaza (lazertinib), Korea’s 31st domestically-developed new drug.

According to Yuhan’s announcement on March 15, 2021, their R&D investment in 2020 amounted to a total of 200 million dollars, which is an increase of 61% from 124 million dollars in 2019. This is the first time the company’s R&D investment exceeded 179 million dollars. The ratio of R&D investment to sales was 13.7% in 2020, recording a double-digit for the first time. Compared to 6.4% from 2015, the related proportion has doubled in 5 years.

The pharmaceutical industry envisions Yuhan’s superior performance in sales and R&D investment creates a virtuous cycle that leads to success in novel drug development. The company’s new lung cancer drug Leclaza (lazertinib) became Korea’s 31st domestically-developed novel drug, as it received conditional approval from the Ministry of Food and Drug Safety earlier this year. The industry predicted that Leclaza would generate sales of about 9 million dollars, and if approved as a first-line treatment after its phase 3 clinical trials, the potential market will be around 269 million dollars.

Leclaza (lazertinib)which Yuhan licensed out three years ago to Janssen for 1.3 billion dollars, is currently on phase 3 clinical trial for coadministration with Janssen’s Amivantamab. Janssen is currently recruiting patients for its clinical trial to compare the Amivantamab + Lazertinib combination with existing third-generation EGFR TKI drug Tagrisso (osimertinib) and confirm its effectiveness on patients who relapsed following the treatment with Tagrisso. Once this clinical trial is completed, the value of Leclaza is expected to increase to 900 million dollars.

Yuhan also receives Milestone payments for those licensed-out new drug candidates. The company received a milestone payment of 35 million dollars) from Janssen in April, 2020 and an additional 65 million dollars in November, 2020 when Janssen started recruiting participants for the clinical trials of Amivantamab and Lazertinib. The total milestone payments that Yuhan obtained in 2020 marked140 million dollars, which is equivalent to 10% of the company’s total sales.

Yuhan Corporation currently has about 30 new drug candidates in their R&D pipeline. The pipeline has significantly increased since the collaborative research projects have been initiated as part of their open innovation strategy.

The market has predicted that Yuhan Corporation’s profit structure will be solid over the next 3 years. A pharmaceutical/biotech market analyst said, “Yuhan is expected to have stable annual sales growth of 10% over the next three years. If the domestic prescription and sales of Leclaza begin in the second half of this year, Yuhan’s Prescription Drug (Rx) sales will increase by about 11%, and with the launch of new probiotics on the online market platform, its Over-the-Counter Drug (OTC) sales performance will go up by 47%.”