HK inno.N posts 53.6% surge in Q2 operating profit on K-CAB exports, IV solutions growth

HK inno.N delivered an earnings surprise in the second quarter, with operating profit surging more than 50 percent year-on-year, driven by strong domestic and overseas growth of its flagship gastroesophageal reflux disease drug K-CAB (generic name tegoprazan) and solid performance in its intravenous solutions business.

HK inno.N disclosed Wednesday preliminary consolidated second-quarter sales of 267.2 billion won ($182 million), operating profit of 30 billion won and net profit for the period of 13.7 billion won. Compared with the same period last year, sales rose 1.6 percent while operating profit and net profit for the period grew 53.6 percent and 13.6 percent, respectively. The operating margin improved sharply by 3.8 percentage points to 11.2 percent from 7.4 percent a year earlier.

For the first half of the year, cumulative sales climbed 3.0 percent year-on-year to 525.9 billion won, while operating profit jumped 40.7 percent to 63.2 billion won.

The prescription drug, or ETC, segment was the primary engine of earnings growth. Second-quarter ETC sales rose 1.4 percent year-on-year to 246.6 billion won, while segment operating profit surged 48.1 percent to 31.5 billion won.

K-CAB posted second-quarter domestic outpatient prescription sales of 61.5 billion won — up 15.4 percent year-on-year based on UBIST data — solidifying its position as the No. 1 peptic ulcer treatment in South Korea. Total K-CAB sales for the quarter reached 49.3 billion won, with overseas finished-product export sales jumping 337.3 percent year-on-year to 4.5 billion won. Growing royalty income from expanded global rollouts, including in China, also strengthened the high-margin profit structure and contributed to the improvement in operating margin.

The intravenous solutions segment also performed well, with sales rising 13.7 percent year-on-year to 38.5 billion won on sustained strong demand for total parenteral nutrition products. Sales of cardiovascular products grew 4.7 percent to 72.1 billion won.

The health and beauty segment — which includes hangover-relief product Condition — posted second-quarter sales of 20.6 billion won, up 3.4 percent year-on-year. The division recorded an operating loss of 1.5 billion won as marketing costs tied to new product launches and new advertising models were concentrated in the first half, though the loss narrowed compared with the same period last year, signaling a recovery.