ST Pharm is experiencing unprecedented growth, achieving record-breaking performance due to the explosive expansion of its oligonucleotide contract development and manufacturing organization (CDMO) business. This surge in commercialization is driven by global pharmaceutical companies broadening their RNA-based treatments from rare diseases to chronic conditions.
Operating Profit Surpasses 55.1 Billion KRW: Oligonucleotide CDMO Achieves Qualitative and Quantitative Growth Milestone
Industry reports from Thursday indicate that ST Pharm posted consolidated revenue of 331.6 billion KRW (about 229 million USD) and an operating profit of 55.1 billion KRW (about 38.2 million USD) last year. These figures represent remarkable increases of 21.1% and 98.9% respectively, compared to the previous year. Net income also saw a significant boost, rising 67.9% to 54.5 billion KRW (about 37.8 million USD) during the same period.
ST Pharm’s performance has been on a steep upward trajectory since the fourth quarter of last year. Q4 revenue reached 129 billion KRW (about 88.3 million USD), with operating profit hitting 26.4 billion KRW (about 18.3 million USD). The operating profit margin for the quarter exceeded 20%, reaching 20.5%.
The oligonucleotide CDMO business is the primary driver behind this impressive performance. Annual revenue from this segment reached 237.6 billion KRW (about 164.5 million USD) last year, spearheading the company’s overall results with a 35.0% year-over-year growth.
High-margin commercialization projects significantly boosted profitability, generating 174.4 billion KRW (about 120.8 million USD) in revenue. This represents a substantial 50.6% increase compared to the previous year.
In the fourth quarter alone, revenue from these projects reached 70.6 billion KRW (about 48.9 million USD), marking an 8.3% increase from the 65.2 billion KRW (about 45.2 million USD) recorded in the same period last year.
This growth can be attributed to the successful progression of clinical trials for chronic disease treatments, such as those targeting hyperlipidemia and cardiovascular conditions, which has led to increased demand for commercial active pharmaceutical ingredients (APIs).
ST Pharm reported expanded demand for commercial APIs in both oligonucleotide and small molecule drugs. The company anticipates continued growth in operating profit margins due to revenue increases and operational leverage.
As of the end of last year, the company maintained a backlog of orders worth approximately 300 billion KRW (about 207.8 million USD). In January of this year, ST Pharm announced new orders for oligonucleotide APIs worth about 83 billion KRW (about 57.5 million USD), indicating sustained momentum in order acquisition.
Technological Edge and Market Leadership in RNA
ST Pharm is cementing its position as a global leader, leveraging its technological prowess to go beyond mere production capabilities.
Industry experts project that the global ribonucleic acid (RNA) therapeutics market will grow at an average annual rate of about 18% until 2030. This growth is expected to be driven by the commercialization of chronic disease treatments, significantly increasing API demand.
The company has developed proprietary technologies, including SmartCap and an enzyme synthesis method for large-scale oligonucleotide production.
SmartCap has garnered recognition for its technological superiority, securing supply contracts with global pharmaceutical companies. The enzyme synthesis method is noted for its ability to enhance productivity and reduce costs compared to traditional chemical synthesis methods, making it ideal for large-scale commercial production.
ST Pharm is expanding its business scope beyond the messenger RNA (mRNA) CDMO platform to include the production and development of single-guide RNA (sgRNA), a crucial component for CRISPR-Cas gene editing therapies. The company has completed the installation of a good manufacturing practice (GMP) approved manufacturing and quality control line for sgRNA and plans to commence full-scale production this year.
The company’s in-house drug development efforts are also showing promising results. ST Pharm is developing an acquired immunodeficiency syndrome (AIDS) treatment called Pirmitegravir (project name STP0404), the world’s first ALLINI mechanism-based therapy, currently in phase 2a clinical trials.
Pirmitegravir has demonstrated efficacy against human immunodeficiency virus (HIV) strains that have developed resistance to existing treatments. Topline data from the phase 2a trial is expected to be released in the third quarter of this year.
An industry insider commented that ST Pharm has successfully pivoted its business portfolio from small molecule compounds to oligonucleotides and mRNA, securing a unique position in the global CDMO market. As the oligonucleotide treatment market for chronic diseases begins to flourish, particularly in target therapies, the increased commercialization volume will create a virtuous cycle, enhancing operating profit margins through economies of scale.
