Celltrion CEO denies inflating earnings

 
(Ref: The Korea Herald)
  • Celltrion CEO Kim Hyoung-ki rebuffed a report criticising the drugmaker of inflating earnings by including R&D spending as assets, The Korea Herald reported Friday.

  • “We have nothing to hide," Kim stated, continuing "we have long considered R&D spending as intangible assets."

  • Last month, Deutsche Bank cited the company for accounting "errors," claiming that the drugmaker's operating margin in 2016 would have been slashed from 57 percent to 35 percent if R&D spending was not recorded as assets.

  • "Unlike new drug development, trial success of biosimilars can be gauged by comparing the material and structure with the original drugs," Kim noted, adding "we also develop new drugs like flu treatment. In this case, we calculate the research spending as costs."

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