대한뉴팜

Daehan New Pharm Co., Ltd. First Half Financial Results Analysis1. Slight Increase in Sales (Unit: million KRW) 2009 First Half 2008 First Half Increase/Decrease % Pharmaceuticals 15,334 12,452 2,882 23.1% Veterinary Medicine 4,268 6,318 -2,050 -32.4% Subtotal 19,602 18,770 832 4.4% Cosmetics 24 2,038 -2,014 -98.8% - Discontinuation of Avent business at the end of the first half of this year.- Excluding the discontinued business (Cosmetics), sales of Pharmaceuticals and Veterinary Medicine rose slightly by 4.4% compared to the previous year.2. Significant Improvement in Operating Profit (Unit: million KRW) 2009 First Half 2008 First Half Increase/Decrease Increase/Decrease % Amount Profit Margin Amount Profit Margin Pharmaceuticals 2,170 14.2% 326 2.6% 1,844 565.6% Veterinary Medicine 539 12.6% 54 0.9% 485 898.1% Subtotal 2,709 13.8% 380 2.0% 2,329 612.9% - Operating profit in 2009 was 2.7 billion KRW, profit margin improved significantly to 13.8% (2008 operating profit was 0.38 billion KRW, profit margin 2.0%).1) Organizational and Workforce Restructuring (Unit: million KRW)- Reduced workforce from 270 employees on June 30, 2008 to 174 employees on June 30, 2009, a cut of 96 employees.- Labor costs reduced by approximately 700 million KRW compared to the same period last year. 2009 First Half 2008 First Half Increase/Decrease Salaries 3,334 3,934 -600 Employee Benefits 427 525 -98 Total 3,761 4,459 -698 2) Management Focused on Profitability and Rebuilding Business Model- Pursuit of strictly profitability-oriented management resulting in cost reduction and profit increase.- New Business Model- Shifted from direct sales to pharmacies and hospitals to logistics and sales agency through comprehensive wholesalers (9 companies) and general distributors, leading to shorter distribution terms and earlier accounts receivable collection, thereby reducing costs and improving cash flow.3) Focus andion of Products- Focused on profitable products to increase sales and profitability.- From about 400 products in 2008 to around 130 highly profitable products as of the end of June 2009.4) Cost Reduction- Company-wide cost savings reduced expenses by about 400 million KRW compared to the same period last year.3. Improvement in Financial Structure1) Liquidity Improvement (Unit: million KRW) 2009 First Half 2008 First Half Notes Current Assets 41,34738,959 Current Liabilities 26,16034,802 Liquidity Ratio 158.1%111.9% 2) Debt Ratio Improvement (Unit: million KRW) 2009 First Half End of 2008 Notes Debt 31,516 42,049 Assets 80,666 77,064 Debt Ratio 39.1% 54.6% 3) Improvement in Asset Composition (Unit: million KRW) 2009 First Half End of 2008 Increase/Decrease Notes Investment Assets 32,118 41,497 -9,379 Long-term Loans Percentage of Total Assets 28.6% 34.8% -6.2% - Recovered 8 million USD of long-term loans as of June 30, 2009, greatly reducing long-term loans.- Asset composition ratio improved from 34.8% in the same period last year to 28.6% in this term, a 6.2% improvement.4. Outlook for the Second Half (Unit: million KRW)- Based on the intensification of profitability-focusedion and concentration strategy and establishment of a new business model, continuous increases in sales and profits are expected in the second half.- Second half sales are expected to reach 21 billion KRW and operating profit 3.3 billion KRW.- For the full year, sales are projected at 40.6 billion KRW, operating profit at 6 billion KRW, with a target operating profit margin of 15%. 2009 First Half 2009 Second Half Annual Total Sales 19,602 21,000 40,602 Operating Profit 2,709 3,300 6,009 Operating Profit Margin 13.8% 15.7% 14.8%

Daehan New Pharm Exports Large-Animal Anthelmintics to the Netherlands Daehan New Pharm Co., Ltd. exported large-animal anthelmintic products to the Netherlands, one of the leading advanced countries in Europe, on July 28. The company has recently focused on developing new export markets for veterinary medicines, expanding beyond Ethiopia and Japan to newly emerging regions such as Iraq and Taiwan. Kepro B.V., the Dutch partner company, is a global veterinary pharmaceutical manufacturer and marketing firm with branches not only in Europe but also across the Middle East, Africa, and South America. Daehan New Pharm successfully passed Kepro’s preliminary factory quality inspection (EU-GMP) and expects stable and continuous export growth in the future. The company has been actively expanding into overseas markets, achieving export sales of USD 5.5 million (approximately 5 billion KRW) in 2007, USD 5.8 million (approximately 6.4 billion KRW) in 2008, and an expected USD 7.3 million (approximately 8 billion KRW) this year, showing consistent export growth.

Daehan New Pharm announced on July 29 that it had filed two patents, including one for the antihypertensive drug lacidipine. Lacidipine is an antihypertensive that is taken once a day, convenient to take, and has low tolerance. It is exclusively sold in Korea by the foreign company GlaxoSmithKline (GSK) with annual sales of about 20 billion won. Daehan New Pharm has completed the bioequivalence test for lacidipine and plans to launch it in November 2009. Daehan New Pharm expects to capture 25% of the lacidipine formulation market in 2010, expecting additional sales of around 5 billion won. Daehan New Pharm has also developed and launched "Stopping," a preventative and adjunctive treatment for pig diarrhea, which is a fatal disease in pigs, and has completed a patent application for this treatment adjunct. The market for preventative and adjunctive pig diarrhea treatments for pig farms is estimated to be about 10 billion won, and it is expected that exclusive supply will be possible in the domestic market, where there are currently no specific pig diarrhea adjunctive treatments.

Daehan New Pharm’s operating profit soars in the first quarter Daehan New Pharm announced on the 14th that during the first quarter of 2009, the company recorded sales of 8.8 billion won, operating profit of 920 million won, and net profit of 1.46 billion won. The operating profit and net profit represented year-on-year increases of 900% and 155%, respectively. The sharp rise in operating profit was driven by exports, which reached 2 billion won—an increase of 187% compared to 1.1 billion won in the same period of the previous year. The remarkable growth in exports was attributed to the company’s years of effort to develop overseas markets, which have now borne fruit with a rapid increase in exports to new markets such as Russia and the CIS region. This performance reflects that Daehan New Pharm’s finished pharmaceutical products have met various international quality standards, bringing them closer to global quality benchmarks.

Daehan New Pharm Co., Ltd. launched VenomMaster, a non-antibiotic treatment for bovine mastitis, in October this year, and DCS682, a non-antibiotic growth promoter for pigs and chickens, in November. VenomMaster utilizes bee venom, which contains anti-inflammatory, antibacterial, and immune-boosting properties. Developed as a treatment for mastitis, a common infection among dairy cows in Korea, it is the first veterinary pharmaceutical product of its kind to be introduced domestically. The product was commercialized by applying Daehan New Pharm’s advanced pharmaceutical technology to research data accumulated over many years by the Rural Development Administration’s National Institute of Agricultural Sciences. According to reports from major domestic broadcasters (KBS, MBC, YTN, EBS), VenomMaster demonstrated more than 80% treatment efficacy for mastitis cases without the use of antibiotics. The domestic market for bovine mastitis treatment is estimated to exceed 10 billion won annually, and VenomMaster is expected to secure over 30% of that market in 2009. DCS682 was jointly developed with the Industry-Academic Cooperation Foundation of Chosun University as part of a project organized by the Agricultural R&D Promotion Center (ARPC) under the Ministry for Food, Agriculture, Forestry and Fisheries. The domestic market for growth-promoting antibiotics is estimated to exceed 20 billion won per year, and DCS682, as a growth-promoting antibiotic alternative, is projected to capture more than 30% of this market in 2009. Due to growing antimicrobial resistance concerns, the use of antibiotics as growth promoters in compound feed is scheduled to be legally restricted starting in 2009 (according to MIFAFF Notice No. 2007-83). Advanced countries such as those in Europe and the United States have already implemented similar bans, leading to the development of eco-friendly growth promoters and non-antibiotic immune enhancers. Against this backdrop, Daehan New Pharm’s new products are expected to align with the current well-being trend and grow into major “cash cow” items for the company.

Daehan New Pharm Co., Ltd. (CEO Bae Kun-Woo) successfully completed the GMP inspection conducted by the Ethiopian Ministry of Health in June and received final approval of compliance on July 16. As a result, the company expects to export more than USD 1–2 million worth of finished pharmaceuticals and veterinary medicines annually to Ethiopia in the coming years. Daehan New Pharm has consistently exported veterinary medicines to Ethiopia since 2002, starting with USD 320,000 and maintaining annual exports of USD 400,000–500,000. With this GMP approval, the company has now established a foothold to supply its core human pharmaceutical products, including cephalosporin antibiotics and anticancer drugs, to the Ethiopian market. Although Ethiopia is a developing country, it manages its pharmaceutical regulations in accordance with international standards, including WHO GMP criteria. Therefore, the outcome of this inspection carries significant meaning. Moreover, due to the declining presence of competing supplier nations such as India, Pakistan, and China in the Ethiopian pharmaceutical import market, the company’s export prospects are looking even brighter. Daehan New Pharm currently exports cephalosporin-based pharmaceuticals such as ceftriaxone, ceftazidime, and cefpodoxime to more than 20 countries worldwide, including Vietnam, Pakistan, and Cuba. The company is also actively expanding exports of major products such as streptokinase (a thrombolytic agent), and anticancer drugs including carboplatin, dacarbazine, and dactinomycin. Meanwhile, in November 2007, Daehan New Pharm received the USD 5 Million Export Tower Award at the 44th Trade Day celebration. The company continues to strengthen its overseas partnerships and develop strategic export products with strong market potential, aiming to achieve USD 10 million in annual exports within the next few years.

Daehan New Pharm held its 2008 New Year’s kickoff ceremony on Wednesday, January 2, with all executives and employees in attendance at both the headquarters and the manufacturing plant. During the ceremony at the headquarters, seven employees, including Deputy Manager Kim Jong-seong from the Animal Health Division’s Development and Marketing Department, received recognition awards for exemplary performance. The company adopted the slogan “United for Profit, Committed to Goals with Passion” for the year. In his New Year’s address, President Park Myung-rae expressed his expectation that many challenges would arise in the coming year but emphasized that all employees must achieve the company’s business objectives through thorough planning and strong dedication. Following the ceremony, Executive Director Seol Geun-dong delivered a special lecture for the management team on the topic “Eight Characteristics of Successful People.” Meanwhile, the company had held its year-end closing ceremony separately at both the headquarters and the plant on December 31.

As of November 26, 2007, Mr. Seol Geun-dong was appointed Executive Director in charge of Academic Development and Marketing.

The company will be awarded the 'USD 5 Million Export Tower' at the 44th Trade Day ceremony. The award ceremony will be held on Friday, November 30, 2007 at 10 a.m. in the Swingspace Hall on the 3rd floor of COEX.