Wed, Jun 05, 2013 - Page 14 News List

Orders for cancer drug Doxil from US’ Johnson & Johnson boost TTY Biopharm

By Kevin Chen  /  Staff reporter

TTY Biopharm Co’s (台灣東洋藥品) announcement that it was securing orders from health giant Johnson & Johnson will benefit the local drugmaker by allowing it to gain more business from global pharmaceutical companies, Citigroup said yesterday.

On Monday, TTY Biopharm announced that it will manufacture ovarian and breast cancer drug Doxil for Johnson & Johnson on a contract basis, the company said in a filing to the Taiwan Stock Exchange.

Doxil is used primarily to treat ovarian and breast cancer by using a lipid-based formulation that has a cancer-killing drug inside it.

TTY said in the filing it was planning to begin international shipments of the drug in September. The company did not disclose details of the deal.

“TTY could see further contract manufacturing opportunities as a qualified US and EU supplier to major international pharmaceutical companies,” Citigroup Global Markets head of Taiwan research Peter Kurz said in a note.

Kurz said Johnson & Johnson had been on the lookout for an alternate supplier on a longterm supply basis since its contract manufacturer Ben Venue Laboratories suspended production due to quality compliance issues in November 2011.

He attributed TTY’s securing of orders for Doxil from the US company to the fact that it is one of the few companies that has competitive liposome technology capable of mass production.

Citigroup forecast the company’s revenue growth will increase from 7 percent last year to 16 percent between 2017 and 2022, which will also come partially from the company’s further synergies with its China operations, the note said.

TTY Biopharm reported sales of NT$2.16 billion (US$70 million) last year, up from NT$2.06 billion in 2011. Gross margin rose to 63.2 percent last year from 61 percent in 2011, while net profit rose to NT$542 million, or NT$2.53 per share, compared with net profit of NT$519 million, or NT$2.43 per share, the previous year.

SinoPac Securities Co (永豐金證券) said in a separate note yesterday that TTY’s Doxil shipments for this year could begin with 200,000 units, equivalent to earnings contribution of between NT$1 and NT$1.5 a share, and slowly increase to 480,000 units.

“Worldwide sales of Doxil are about US$600 million, with US$250 million coming from the US market. Because there is a global shortage of the drug, that will bode well for TTY’s profit outlook,” SinoPac said.

The brokerage maintained a “buy” rating on the shares with a target price of NT$120. TTY shares rose 2.34 percent to NT$109.5 yesterday.

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