Mon, Apr 01, 2013 - Page 13 News List

ScinoPharm’s profit likely to rise after drug launches

By Camaron Kao  /  Staff reporter

Pharmaceutical maker ScinoPharm Taiwan Ltd (台灣神隆) is expected to see its profit increase by 12.7 percent this year on the back of several new drug launches after reporting record earnings for last year, SinoPac Securities Investment Service Co (永豐投顧) forecast.

“We expect that the seven new drugs ScinoPharm Taiwan is about to launch this year will increase its profits since the company can always accurately forecast the timing of its new drug launches and it maintained good relationships with its major global clients, including Teva and Sandoz,” SinoPac Securities said in a report on Thursday.

ScinoPharm opened two local production lines at the end of last year, and the company’s sales of cancer drugs and central nervous system drugs, which account for 89 percent of its revenue, have grown steadily, the report said.

Based on SinoPac’s report, ScinoPharm plans to launch two drugs in Japan and five in the US this year.

SinoPac has predicted that the pharmaceutical maker would see its net profit increase 12.7 percent to NT$1.32 billion (US$44.29 million) this year, or earnings per share of NT$2.03. Revenue is also likely to climb 14.8 percent to NT$5.22 billion this year, it said.

However, SinoPac still retained the rating of ScinoPharm shares as “neutral” because of the high price-earnings ratio of its shares.

SinoPac suggested that investors interested in buying the stock wait until its share price goes down.

The forecasts came after ScinoPharm last week posted NT$1.17 billion in net profit last year, up 21.75 pecent from 2011. Earnings per share were NT$1.8 last year, compared with NT$1.51 the previous year.

Consolidated revenue increased 15.8 pecent to NT$4.57 billion last year from NT$3.95 billion a year ago because of rising production efficiency, higher yield rate of its products and the company’s move to outsource part of its drug production, ScinoPharm said on Wednesday.

The 15.8 percent revenue growth of the company last year was higher than the 1.6 percent growth in 2011 and 2.6 percent growth in 2010, according to the company.

ScinoPharm Taiwan said earlier this year that the Japanese government was encouraging hospitals there to use more generic drugs because they are cheaper, which is a business opportunity for ScinoPharm.

Furthermore, ScinoPharm Taiwan would also benefit from the Chinese government’s attempt to increase the Chinese medicine market by 20 percent a year and the higher standards China has imposed on drug manufacturing factories, SinoPac said.

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