Hugel, a runner-up in the Botulinum toxin market, was in the spotlight last week, as it attracted the largest funds from foreign investors on the Kosdaq this year.

According to a report by the Korea Exchange, the pharmaceutical firm received a total of 202.2 billion won ($181 million) in foreign investments as of Aug. 10, marking its rise as a new Kosdaq star. 


The company’s share price jumped from 180,100 won in late 2015 to 439,900 won as of Friday.

Its stocks were flying high Friday as investors were in an upbeat mood thanks to an explosive growth in the company’s operating profit in the second quarter. It raised 30.9 billion won in second-quarter sales and obtained 16.4 billion won in operating profit. Its second-quarter profit was 252.7 percent higher compared to the same quarter last year.

Established in 2001, Hugel manufactures Botulinum toxin, known as “Botulax,” hyaluronic acid fillers, dubbed “The Chaeum,” as well as medical equipment for brain diseases and some skin products at its factories in Chucheon, Gangwon Province.

Botulax -- which has clostridium Botulinum toxin Type A as its main ingredient -- treats facial spasms and post-stroke upper-limb spasticity in adults over 18 years old. It also temporarily improves glabellar – the area between the eyebrows, just above the nose -- lines. Botulax accounts for about 45 percent of the company’s total sales.

The Chaeum filler line is for tissue repair and the removal of facial wrinkles. The company is increasing its sales of fillers to nearly equivalent that of Botulax.

Hugel plans to embark on clinical tests of the Botulax on hyperhidrosis later this year and to start tests for development of body fillers in 2017.

The company currently exports the toxin to Southeast Asian countries including Vietnam, Thailand and the Philippines and Latin American countries such as Peru, Colombia and Chile.

It exports the fillers to Japan, Hong Kong and Thailand.

The global Botulinum toxin market is steadily expanding, as use of the substance for both medical and beauty treatments is on the increase. According to the UBS Pharmaceutical Handbook and NH Investment & Securities’ research center, the market is forecast to grow from $3.6 billion in 2015 to $5.6 billion by 2020.

Korea’s Botulinum toxin market has grown to 80 billion won as of last year, and it is estimated to keep expanding by around 10 percent annually with an increasing population seeking noninvasive cosmetic procedures. Hugel claimed 34 percent of the market in 2015.

“The company’s stock price appears to be further buoyed by how it is expected to win licenses to sell the Botulinum toxin in additional emerging markets including Russia, Brazil and Mexico later this year,” said Kim Ho-jong, an analyst at NH Investment & Securities. “With its second factory operating since April, the firm’s capacity has increased, allowing it to meet rising demand for the toxin and fillers in Japan and countries in Southeast Asia and Latin America.”

The combined production capacity of the two plants is 5.72 million vials.

The company will launch the product in the US and Europe in the second half of 2018 and China in 2019, according to the company.

“We have won approval for state-3 clinical tests of the products for all three markets,” said a spokesman at the company. “The US is going to be the biggest market guaranteeing further growth.”

Kim raised the target price for Hugel by 53.8 percent to 530,000 won, saying that the company’s 12-month forward price/earnings ratio -- currently at 22.6 -- has been undervalued compared to other beauty care-related stocks.

“Considering that the PER of Medytox, Hugel’s archrival, is 39.8, the company is highly appealing,” Kim added.

By Song Su-hyun (song@heraldcorp.com)

This is the 19th in a series of articles analyzing major companies by market capitalization traded on the tech-heavy Kosdaq market. -- Ed