[Edaily Reporter SHIN MIN JOON ] YuyuPharma(000220)has continued its earnings growth trend since the start of this year. Analysts attribute this to improved profitability resulting from streamlined production processes and an optimized cost structure. In particular, YuyuPharma is aiming for a quantum leap in performance by expanding its business scope in earnest into the business-to-consumer (B2C) market for pet health supplements, in addition to its existing business-to-business (B2B) pharmaceutical operations.

Growth in Revenue, Operating Profit, and Net Income in the First Quarter of This Year

According to the pharmaceutical industry on the 16th, YuyuPharma recorded revenue of 27.1 billion won and operating profit of 4.9 billion won in the first quarter of this year, based on separate financial statements. Revenue and operating profit increased by 19.4% and 53.5%, respectively, compared to the same period last year. Net income for the same period also rose by 59.2% to 3.9 billion won. Revenue, operating profit, and net income all posted double-digit growth rates.

YuyuPharma officials explained, “Streamlining production processes and improving our cost structure have had a positive impact on profitability,” adding, “Reducing the sales share of off-the-shelf products and expanding that of in-house developed products is also contributing to this growth.”

YuyuPharma has high hopes for its new business venture in pet health supplements. To this end, the company invested $4.5 million (6.6 billion won at the time) late last year to establish Yuyu Venture, its U.S. subsidiary. Yuyu Venture serves as a holding company, managing two subsidiaries: Mervyn’s Petcare and Yuyu Bio.

Mervyn’s Petcare operates the pet health supplement business. Mervyn’s Petcare focuses on health supplements specifically for cats, including products for joints, skin, the digestive tract, and multivitamins. Mervyn’s Petcare recently launched “ARI’S PURRFECT DENTAL BITES,” a cat oral care supplement, on Amazon—the world’s largest e-commerce platform—and is now fully ramping up its expansion into the U.S. pet market.

ARI’S PURRFECT DENTAL BITES is designed as a treat to facilitate natural oral care, taking into account the fact that it is difficult to brush a cat’s teeth daily. As cats chew the product, it helps manage plaque and tartar on the surface of their teeth.

The main ingredient is sodium hexametaphosphate (SHMP), widely used in dental care, which binds with calcium in saliva to inhibit the formation of plaque and tartar on teeth.

A representative from YuyuPharma stated, “The response to Aris Perfect Dental Bites, which is now available on Amazon, has been positive, with reviews being posted consistently in real time.”

Following the launch of Aris Perfect Dental Bites—which took about a year to develop—Mervins Pet Care is preparing its second product: a stick-type nutritional supplement for cats.

Only Four U.S.-Approved Biopharmaceuticals for Companion Animals... Significant Growth Potential

YuyuPharma plans to target the U.S. market by developing biopharmaceuticals for companion animals through Yuyu Bio. Yuyu Bio is focusing on treatments for feline psoriasis, a chronic pet disease. Yuyu Bio is currently in the process of identifying clinical candidate compounds. The company is developing a recombinant protein therapy with a long duration of action and improved patient compliance.

The U.S. companion animal biopharmaceutical market is considered a “blue ocean.” This is because there are currently only four approved biopharmaceuticals for companion animals in the U.S. Among these, Cytopoint, a treatment for atopic dermatitis, is reported to have annual sales of 1 trillion won. Solensia, a treatment for feline osteoarthritis, recorded annual sales of 260 billion won just three years after its launch.

According to the American Pet Products Association (APPA), as of last year, there were approximately 94 million pet-owning households in the U.S., accounting for 51% of all households. Among these, households with cats numbered about 49 million, making the U.S. the world’s largest cat market by a single country.

The trend of “pet humanization”—where the average lifespan of cats is increasing and cat owners are providing their pets with the same level of healthcare as humans—is also working in YuyuPharma’s favor. According to the government’s plan for the development of the veterinary pharmaceutical industry announced last April, the global veterinary pharmaceutical market is projected to grow from $47 billion (approximately 71 trillion won) in 2022 to $99.5 billion (approximately 151 trillion won) in 2032. The average annual growth rate is expected to reach 7.7%.

A YuyuPharma official stated, “This entry into Amazon is the first achievement by Mervins Pet Care, a local subsidiary established with the goal of entering the pet health supplement industry,” adding, “It is highly significant as it marks YuyuPharma’s first overseas export since designating the pet business as a new growth engine.”

The representative added, “Since the business-to-consumer (B2C) sector has relatively higher growth potential compared to the business-to-business (B2B) sector, we anticipate significant growth.”