Polaris AI Pharma

Polaris AI Pharma produces more than 60 types of active pharmaceutical ingredients (APIs) using organic synthesis, chiral, organometallic complex synthesis, and micronization technologies, and operates both an API business and a contract development and manufacturing organization (CDMO) business.

It serves more than 100 domestic and overseas clients, with a relatively large weighting toward Japan, a market known for strict regulatory approval, while also having completed API registrations in China and Mexico to expand its overseas network.

In 2025 the company newly entered government procurement markets in Russia, Saudi Arabia, and Mexico, and it registered the API roxatidine acetate hydrochloride, used for gastric and duodenal ulcer treatment, with China's National Medical Products Administration (NMPA), successfully commercializing it.

Since being incorporated into Polaris Office Group in March 2024, the company has been jointly developing a pharma-specialized AI solution called "Pharma ASK-Doc" with affiliate Polaris Office using retrieval-augmented generation (RAG) technology.

In February 2026 it signed a strategic partnership with PharmGen Science for joint research and development of new and improved drugs as well as collaboration on AI-based CDMO process technology.

In March 2026 it partnered with pharmaceutical distributor Maseong LS to pursue domestic API self-sufficiency and cost competitiveness, with a focus on central nervous system drugs.

Beyond its core generic-based API and CDMO business, the company has proactively invested in biotech ventures such as Nasdaq-listed Alpha Tau Medical and KOSDAQ-listed Quad Medicine, pursuing a so-called "two-track" model that combines its manufacturing business with investment gains from equity stakes.

Competitively, it competes with domestic small and mid-sized API and CDMO players, while its business scope differs from that of large global CDMO companies.

On an annual basis, revenue rose from KRW 62.04 billion in 2022 to KRW 64.21 billion in 2023, then declined for three consecutive years to KRW 59.60 billion in 2024 and KRW 55.54 billion in 2025.

Operating profit, by contrast, rose from KRW 3.16 billion in 2022 to KRW 5.34 billion in 2023 (an 8.3% operating margin), plunged to KRW 176 million in 2024 (a 0.3% margin), and then recovered to KRW 3.19 billion in 2025 (a 5.7% margin).

Owner net income improved for four consecutive years, moving from a loss of KRW 6.36 billion in 2022 to KRW 3.82 billion in 2023, KRW 3.95 billion in 2024, and KRW 6.16 billion in 2025, turning from loss to profit and then expanding further.

On a quarterly basis, revenue of KRW 13.81 billion, operating profit of KRW 1.27 billion, and owner net income of KRW 1.29 billion in Q2 2025 improved to revenue of KRW 14.70 billion, operating profit of KRW 1.57 billion, and net income of KRW 3.50 billion in Q3 2025.

In Q4 2025, revenue held at KRW 14.27 billion but the company posted an operating loss of KRW 392 million, while net income still came in positive at KRW 379 million.

In Q1 2026, revenue was KRW 13.70 billion and operating profit only KRW 606 million, yet net income jumped to KRW 3.65 billion, and in Q2 2026 revenue reached KRW 14.70 billion with operating profit of KRW 779 million while net income expanded further to KRW 6.75 billion.

As a result, cumulative owner net income over the trailing four quarters (Q3 2025 through Q2 2026) totaled KRW 14.28 billion, well above cumulative operating profit for the same period.

The widening gap between operating profit and net income each quarter reflects the significant contribution of gains and losses from non-core investment assets; indeed, in H1 2026 the group's consolidated net income reflected investment gains from Polaris AI Pharma's partial sale of its Alpha Tau Medical stake.

Meanwhile, operating cash flow improved steadily from negative KRW 1.65 billion in 2022 to KRW 4.79 billion in 2023, KRW 7.93 billion in 2024, and KRW 8.83 billion in 2025, underscoring cash generation from the core business, even as total liabilities rose sharply from KRW 5.87 billion at the end of 2024 to KRW 60.00 billion at the end of 2025, pushing the debt ratio up from 4.6% to 44.1%.

Korea's overall pharmaceutical market grew 5.3% year over year to KRW 31.4 trillion in 2023, within which the API market reached KRW 3.8 trillion, its best performance in five years.

The global API CDMO market is estimated at roughly USD 128.03 billion in 2025, expanding to USD 138.86 billion in 2026 and growing at a compound annual growth rate of 8.46% through 2034.

Globally, large CDMO players such as Samsung Biologics, Lonza, and Catalent lead in complex biologics and antibody-drug conjugates, while Polaris AI Pharma competes in the generic-based API and smaller-scale CDMO segment against domestic small and mid-sized peers.

The government's drug price cut policy has been cited as a structural driver requiring both finished-drug makers and the broader API industry to restructure, which is also spurring demand for domestic API substitution and self-sufficiency.

The company's push into emerging government procurement markets such as Russia, Saudi Arabia, and Mexico, along with its China NMPA registration, can be seen as part of a supply chain diversification strategy aimed at reducing reliance on any single country or customer.

Amid moderate growth in Korea's generic and API markets, the global trend toward CDMO outsourcing also presents opportunities for small and mid-sized API companies.

The company has stated plans to apply AI-based CDMO process technology to actual pipelines through its partnership with PharmGen Science and demonstrate efficiency gains, while positioning 2026 as the first year of a major leap forward by combining core business growth with investment successes such as Alpha Tau Medical's commercialization in Japan.

Alpha Tau Medical has been expanding its business, having obtained marketing approval in Japan for its head and neck cancer treatment device Alpha DaRT and signed a commercialization agreement with Tolmar to enter the U.S. prostate cancer market, meaning fluctuations in the value of Polaris AI Pharma's remaining stake could continue to affect future results.

Market observers view Polaris AI Pharma's investment strategy as split between assets already in an exit phase, such as Quad Medicine and part of its Alpha Tau holding, and mid- to long-term exit candidates such as Bilix and Curogen, with the company reportedly timing further divestments.

Its partnership with Maseong LS for domestic API self-sufficiency links raw material development to distribution, with a focus on central nervous system drugs, aligning with government policy on essential medicine self-sufficiency.

The KRW 10 billion convertible bond issued in March 2026 (maturing March 2030, conversion price of KRW 9,106) was raised for working capital purposes, and conversion could result in the issuance of up to 1,098,177 new shares, equal to 7.52% of total shares outstanding, making potential future dilution worth monitoring.

At the group level, the company is also part of an "AI value chain" being built alongside affiliates such as Polaris Office, Polaris AI, and Polaris Sewon, suggesting that advancing pharma-focused AI solutions could become another pillar of medium- to long-term business expansion.