Thu, Oct 24, 2013 - Page 13 News List

Local company invests in botanical drug firm

STRENGTHS:Genovate said that although it does not have experience in developing botanical drugs, it can offer its expertise in treating metabolic disorders

By Camaron Kao  /  Staff reporter

Local drug producer Genovate Biotechnology Co (健亞) yesterday said it plans to invest US$1 million to buy a 1.42 percent stake in China-based PuraPharm Corp (培力) to co-develop botanic drugs aimed at curing central nervous system and metabolic disorders.

PuraPharm is the fourth-largest botanical drug manufacturer in China in terms of drug exports.

The company’s plan to go public in Hong Kong has opened an window for Genovate to subscribe to its shares, Genovate deputy spokesperson Ann Lin (林惠玲) said by telephone.

“Although Genovate does not have experience in developing botanical drugs, the company can offer its expertise in metabolic disorders, such as gout and diabetes, and central nervous system diseases,” she said.

According to data compiled by PuraPharm, the market value of botanic drugs in China was 250 billion yuan (US$41 billion) last year, accounting for 25 percent of China’s drug market, and the figure could grow by a double-digit percentage every year.

First Capital Management Inc (第一金投顧) yesterday said in a note that the cooperation between the two companies is still in its preliminary stage and the deal’s potential sales contribution to Genovate is unclear.

However, it is likely that the two firms will jointly develop biosimilars for treating cancer based on PuraPharm’s strong foundation in botanic drugs, First Capital said.

First Capital forecast Genovate will report 19.91 percent revenue growth of NT$420 million ($US14 million) this year with a profit of NT$59.54 million.

In the first nine months, Genovate saw its revenue increase 11.38 percent year-on-year to NT$304.23 million, while its net income grew to NT$30.05 million in the first six months from NT$17.36 million the previous year.

Genovate’s shares rose 3.77 percent to NT$45.45 yesterday.

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