"Cosmetic Segment Expected to Lead Medical Device Industry in H2"

There is a growing consensus that aesthetic-focused companies, which demonstrated strong stock performance in Q2, will drive growth in the healthcare and medical device industries in the second half of this year.

On August 28, Jong-hyun Park, an analyst at Daol Investment & Securities, stated, "Preference for biotech within the healthcare sector is increasing. Companies like Hugel, Classys, and NextBioMedical should be closely watched."

Park explained that although concerns arose earlier this month about a decline in the stock prices of aesthetic companies due to the weakening dollar, these companies managed to defend their positions with strong Q2 results. As interest rates are expected to decrease in the second half, improving investor sentiment towards biotech, these companies are likely to continue their growth despite previous challenges.

Indeed, Hugel recorded Q2 sales of KRW 95.4 billion (USD 75.1 million) and an operating profit of KRW 42.4 billion (USD 33.4 million). These figures represent year-on-year growth of 17% and 51.6%, respectively. Operating profit exceeded previous market estimates (KRW 32.7 billion) by KRW 10 billion.

In addition, the ongoing legal battle between Hugel and Medytox over the alleged theft of botulinum toxin strains has also turned favorable for Hugel. The U.S. International Trade Commission (ITC) issued a preliminary ruling in favor of Hugel, partially alleviating legal uncertainties.

Given that it is rare for ITC preliminary rulings to be overturned, the industry believes that Hugel's entry into the U.S. market is imminent. Hugel has already started shipments to the U.S. last month, further raising expectations for its market entry in the second half.

Classys also posted strong Q2 results, with sales of KRW 58.6 billion (USD 46.1 million) and an operating profit of KRW 31.2 billion (USD 24.5 million), exceeding market expectations. With the merger with Hiruda nearing completion, the company is expected to enhance its ability to meet customer needs through equipment diversification, optimize its distribution network, and expand indications.

Classys is set to finalize a contract with its U.S. partner, Cartessa Therapeutics, in September to begin local sales. Cartessa is one of the largest distribution companies in the U.S. aesthetic medical device market, making the contract a strong momentum builder for Classys post-merger.