Onconic Therapeutics Posts Q3 Operating Profit of 8.3 Billion Won...Earnings Surprise

Onconic Therapeutics has proven its "profitable bio" business model by achieving its highest-ever quarterly results in its first year of special listing.

On October 30, Onconic Therapeutics announced through a public disclosure that it recorded sales of 19.2 billion won and operating profit of 8.3 billion won in the third quarter of this year. This marks the company’s highest quarterly performance to date.

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This performance reflects domestic sales of 12.3 billion won, driven by the stable increase in prescriptions for "Zacubeojeong," the 37th domestically approved new drug as of April last year, as well as approximately 6.9 billion won in technology transfer (milestone) revenue received last month from its Chinese partner Livzon.

Onconic Therapeutics achieved a turnaround to profitability in the first half with sales of 9.4 billion won and operating profit of 1.1 billion won in the second quarter. In the third quarter, sales grew to 19.2 billion won and operating profit to 8.3 billion won, representing increases of 103.7% and 647.3% quarter-on-quarter, respectively. Compared to the same period last year, sales surged by 867%, and operating profit turned positive. Notably, even excluding the one-off technology transfer revenue, domestic sales grew by 31% quarter-on-quarter to 12.3 billion won, maintaining double-digit growth each quarter. This indicates that the new drug Zacubeo is successfully establishing itself in the market.

Onconic Therapeutics had raised its annual sales guidance from 16.2 billion won to 24.9 billion won in April this year, but has already exceeded this target with cumulative sales of 37.8 billion won through the third quarter alone. The milestone revenue from Livzon, reflected in this quarter’s overseas sales, resulted from the completion of Zacubeojeong’s phase 3 clinical trial and the submission of a marketing authorization application in China, the world’s largest market for gastroesophageal reflux disease, further raising expectations for commercialization there.

"Zacubeojeong" is a P-CAB class new drug for gastroesophageal reflux disease launched in Korea in October last year, with cumulative prescription sales surpassing 34.5 billion won as of the end of September this year. In June, the drug received an additional indication approval for gastric ulcers, and further expansion of indications and the launch of an orally disintegrating tablet (ODT) formulation are anticipated.

A representative from Onconic Therapeutics stated, "Zacubeojeong is expanding its global market presence by signing technology transfer and distribution agreements with 26 countries, starting with the Chinese gastroesophageal reflux disease market, which is already estimated at 6 trillion won," adding, "As overseas approvals and launches become full-scale, our revenue structure will become even more diversified."

Onconic Therapeutics has established a virtuous R&D cycle by reinvesting profits from Zacubeojeong into the development of next-generation anticancer drugs. The company is currently focusing on expanding phase 2 clinical trials of "Nesuparib," a next-generation synthetic lethality dual-target anticancer drug candidate, and recently received phase 2 IND approval for pancreatic cancer from the Ministry of Food and Drug Safety.

In the second half of this year, four anticancer indications are expected to enter phase 2 clinical trials, accelerating the development of Nesuparib as a pan-tumor therapy.

A representative from Onconic Therapeutics emphasized, "By maintaining operating profit while simultaneously advancing multiple new drug pipelines, we have demonstrated the unique strengths of our 'profitable bio' business model that generates revenue from proprietary drugs," and added, "We will not rest on today’s financial achievements and will devote ourselves even more to new drug research and development to become the Gilead Sciences of Korea."

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