Dongwha Pharm, known for popular products like Whal Myung Su, Fucidin, and PANCOLD, is making a strategic shift under its fourth-generation leadership. The company is transitioning from a traditional pharmaceutical business to a comprehensive healthcare provider, although critics say it still needs to focus on strengthening its core in new drug development.
According to a filing with the Financial Supervisory Service, Dongwha Pharm, along with Mirae Asset Venture Investment PE, has invested 160 billion won ($120 million) to acquire a 57.8% stake in HIRONIC, a medical aesthetics device company. The acquisition, for which Dongwha Pharm is contributing more than 50 billion won ($38 million), is expected to be completed by December following due diligence.
Dongwha Pharm said the move is part of its efforts to diversify into high-margin sectors, such as beauty and medical devices, much like other domestic pharmaceutical companies that have expanded into aesthetic treatments.
The HIRONIC acquisition was reportedly led by Dongwha Pharm Vice President Yoon In-ho, the eldest son of Chairman Yoon Doh-joon. Yoon, a graduate of the University of Wisconsin-Madison, joined the company’s finance department in 2013. After overseeing the over-the-counter (OTC) division, he became chief operating officer in 2020.
Yoon has driven several diversification initiatives. In 2020, Dongwha Pharm acquired orthopedic medical device company Medyssey for 22.1 billion won ($16.6 million), marking the beginning of its expansion. Last year, the company invested 36.6 billion won ($27.4 million) to buy a 51% stake in Vietnam-based pharmacy chain TRUNG SON Pharma, which operates over 140 outlets.
Dongwha Pharm has also made strategic investments in biotech ventures, including medical AI developer VUNO, medical device firm NextBioMedical, and pet healthcare company Fitpet. Altogether, the company has invested more than 120 billion won ($90 million) in external ventures.
These efforts have led to a significant increase in exports. In the first half of this year, Dongwha Pharm reported export revenues of 46.3 billion won ($35 million), a fivefold increase from the same period last year. This growth was driven by Medyssey’s overseas subsidiaries in the U.S., Brazil, Mexico, and Chile, as well as TRUNG SON Pharma’s strong position in Vietnam’s pharmaceutical market.
Despite its diversification, Dongwha Pharm has faced criticism for its slow progress in new drug development. As companies like Yuhan Corp. have gained FDA approval for their new drugs, there is mounting pressure on Dongwha Pharm to prioritize innovation in this area. Currently, more than 50% of the company’s revenue comes from OTC products, with Whal Myung Su, Fucidin, and PANCOLD accounting for 38% of its first-quarter sales.
On the prescription drug front, Dongwha Pharm’s progress has been limited. Its diabetes treatment candidates, DW6013 and DW6014, have only completed Phase 1 clinical trials. The company’s anticancer drug, DW1023, is expected to enter clinical trials later this year, but approval for the trials has not yet been announced.
A Dongwha Pharm representative said, “New drug development is a long-term process, so we expect the ventures we’ve invested in to yield results first. We have streamlined our pipeline and are continuing to develop both OTC and prescription drugs.”
