[Edaily Reporter NA EUN-KYUNG ] ST Pharm Co., Ltd.(237690)continued to post year-over-year revenue growth in the third quarter of this year, driven by its oligonucleotide (oligo) commercialization project and expanded sales in its small-molecule compound business. However, net income fell by nearly 95% due to factors such as a weakening exchange rate and foreign currency translation losses.

ST Pharm Co., Ltd. announced on the 27th that it recorded revenue of 97.6 billion won and operating profit of 15.7 billion won for the third quarter of this year, based on consolidated financial statements. These figures represent increases of 19.1% and 6.6%, respectively, compared to the same period last year.

Compared to the previous quarter, revenue decreased by approximately 10.0%, from 108.5 billion won to 97.6 billion won. Operating profit also fell by about 14.2%, from 18.3 billion won to 15.7 billion won. The third-quarter operating profit margin stood at 16.1%, down from approximately 18.0% in the same period last year and 16.9% in the previous quarter.

ST Pharm Co., Ltd. explained that while it continued to grow in scale due to increased sales of commercialized products, the rise in the exchange rate and expanded sales of relatively less profitable items, such as generics, limited the growth in operating profit.

Revenue in the oligonucleotide division, the company’s core business, reached 69 billion won, a 0.6% increase from 68.6 billion won in the same period last year. Oligonucleotides are used as raw materials for therapies such as ribonucleic acid (RNA) therapeutics, which utilize short nucleic acid fragments. Of the total oligonucleotide sales, revenue from commercialization projects amounted to 49.7 billion won, accounting for approximately 72% of the entire oligonucleotide division’s revenue. Commercialization projects involve the production and supply of raw materials used in actual pharmaceutical products sold on the market, as opposed to the supply of raw materials for clinical trials.

ST Pharm Co., Ltd. secured 12 new projects this year. Following eight projects in the first half of the year, the company secured an additional four in the second half. As of the end of September, the order backlog for the oligonucleotide business stood at approximately $270 million (about 358.2 billion won), with commercialization projects accounting for about 78% of that total.

The small-molecule business also contributed to revenue growth. Third-quarter revenue from small molecules reached 11.6 billion won, a 14,115.1% increase compared to the same period last year. The expansion of revenue from commercialization projects is cited as the primary factor. As of the end of September, the order backlog for the small-molecule business stood at approximately $40 million (about 53.1 billion won).

Revenue from related businesses, such as messenger RNA (mRNA), totaled 500 million won, a 65.9% decrease compared to the same period last year. However, the company secured two new projects, including a personalized cancer vaccine, and generated revenue from clinical projects related to SmartCap and lipid nanoparticles (LNPs). Revenue from subsidiaries, such as contract research organizations (CROs), totaled 8.8 billion won, a 5.6% decrease compared to the same period last year.

Net income, however, fell 94.8% year-over-year to 900 million won. It also decreased by approximately 93.2% compared to the previous quarter’s 13.2 billion won. The company explained that non-operating factors, such as foreign exchange losses and foreign currency translation losses resulting from a decline in the exchange rate, contributed to the decline in net income.

ST Pharm Co., Ltd. plans to secure a foundation for mid- to long-term growth by expanding the commercialization share of its oligonucleotide business and securing new orders.