After a difficult year of terminated or reduced licensing deals, South Korean drugmaker Hanmi Pharmaceutical said Tuesday that it logged an operating profit of 26.8 billion won ($23.39 million) in 2016, down 87 percent from the previous year.

Its net profit also plunged 81 percent on-year to 30.3 billion won while its revenue fell 33 percent on-year to 882.7 billion won.

Hanmi endured a tough year in 2016 as it had to return payments for new drugs that it had licensed out to global partners, including Boehringer Ingelheim and Sanofi, as they decided to terminate or change the terms of their deals due to patient safety or manufacturing issues.

Hanmi’s finances last year took a toll after Sanofi reduced a licensing deal it had entered with the Korean drugmaker over a set of diabetes treatments in development, the company said.

Last December, Sanofi returned the development and commercialization rights to one of the three diabetes treatments it had licensed from Hanmi. As a result, Hanmi had to refund a part of the upfront payment it had originally received from the French drugmaker.

The unexpected expenses led Hanmi to record an operating loss of 16 billion won and a net loss of 38.3 billion won in the fourth quarter of 2016.

Despite the losses, the Korean drugmaker noted that it nonetheless spent 37.5 billion won toward research and development last year, continuing its commitment to developing new drugs and related technologies.

Hanmi expects a more stable 2017 as new payments from Genentech — which inked a licensing partnership with Hanmi over a cancer drug in development last year — will be reflected in this year’s finances.

The company also expects its domestic sales and exports of finished products to grow this year, lending a hand in reviving its profits, it said.

By Sohn Ji-young (jys@heraldcorp.com)