This is the fifth in a series of articles analyzing the top 10 companies by market capitalization traded on the tech-heavy KOSDAQ market. –Ed.
With a growing population seeking noninvasive cosmetic procedures, dermal filler and Botulinum toxin maker Medy-Tox has been bolstering its presence in Korea and abroad.
The biopharmaceutical company, which manufactures and distributes an injectable neurotoxin for cosmetic use, posted a whopping 60.9 percent surge in annual operating profits last year, outperforming the sector’s 9.8 percent gain on KOSDAQ.
Medy-Tox has been developing Botulinum toxin type A — better known as Botox — since it was established in 2000, when Korean consumers were not familiar with the wrinkle smoother which works by temporarily paralyzing facial muscles.
“The firm has a solid domestic market position as it is ranked the No.1 Botox manufacturer and No. 4 with its dermal filler products,” said Noh Kyung-chul, an analyst at SK Securities.
Medy-Tox has been expanding its global foothold, with half of its sales coming from overseas markets.
As a part of such moves, Medy-Tox entered into an exclusive license agreement with Allergan, an Ireland-based Botox maker, to transfer its technology of liquid botulinum toxin under the brand name “Innotox” for $360 million in 2013. The anti-wrinkle treatment is currently in clinical trials and likely to be launched in 2018.
The key importer markets of Medy-Tox products include Japan, Brazil, Thailand, China and Taiwan.
“Given its surging exports of toxin and filler products as well as Innotox’s global trials which will soon go into its third phase, Medy-Tox is an attractive stock to invest,” said Park Jae-chul, an analyst at Mirae Asset Securities.
With its rapid growth in earnings which surged to 51.7 billion won ($44.3 million) in operating profit in 2015 from 16.8 billion won in 2013, the firm’s stock price shot up nearly fivefold from 114,500 won to 512,800 won during the period.
But shares in the company are struggling to rebound since they sank a record 13 percent on Feb. 12 this year when trading of smaller stocks on KOSDAQ was temporarily halted after the benchmark gauge plunged more than 8 percent.
Analysts attributed the setback to investors’ concern that valuations were excessive relative to earnings prospects.
“Investors are selling small-cap biopharmaceutical stocks due to high valuations amid the global market turmoil,” an analyst declined to be named said.
Medy-Tox, whose price-earnings ratio is 56.7, traded 426,100 won during late-morning trading on Monday, down 16.4 percent from two months earlier.
Noh said he wouldn’t rule out a rebound in the stock price if Medy-Tox sees further development in its products like Coretox which have less likelihood of patients building a resistance against it.
“If the clinical trial on Innotox, which is currently suspended, resumes and Coretox obtains approval for domestic sales, the share price may move up,” Noh said.
A Medy-Tox official declined to comment.
By Park Han-na (hnpark@heraldcorp.com)
