Daiwa Capital Markets initiated its coverage of generic-drug producerTWi Pharmaceuticals Inc (安成藥) in expectation that the company’s revenue would more than triple next year after its first new products hit the US market.
TWi Pharmaceuticals’ revenue is expected to grow to NT$1.17 billion (US$39.52 million) next year, from NT$300 million this year, Daiwa analyst Christine Wang (王琦清) forecast in a report issued on Monday.
Losses next year would improve to NT$193 million from this year’s loss of NT$655 million, Wang forecast.
In 2015, TWi Pharmaceuticals’ revenue is expected to grow more than four-fold annually to NT$5.5 billion from a year earlier after it launches another five to six drugs in the US, Wang said in the report.
TWi is developing medicines to cure diseases including gastroesophageal reflux.
The company would move into the black with profit of NT$1.75 billion in 2015, Wang forecast.
TWi Pharmaceuticals, established in 1997, has not sold any drugs on any market. Targeting the US market, the company said it had nine new drugs under review by the US Food and Drug Administration and hoped those drugs would help TWi enter the US$3.45 billion per year market in the US.
“Given the much larger scale of revenue next year, compared with this year, we believe the company will see its loss narrow in 2014 and become profitable in 2015,” Wang said.
Daiwa gave a “buy” rating on TWi Pharmaceuticals, with a six-month target price of NT$465. That represented a 49 percent upside from the stock’s closing price of NT$312.01 on the Emerging Stock Market on Friday.
The company is set to trade its shares on the GRETAI Securities Market by the middle of next month.
TWi plans to sell 13.3 million shares at the price ranging from NT$244 to NT$253, Michael Huang (黃立鑫), the company’s head of investor relations, said by telephone on Friday.
The company plans to use the proceeds of between NT$3.25 billion and NT$3.36 billion to do clinical trials, capital expansion and to set up retail stores in the US, Huang said.
“We are considering acquiring firms in the US to build our own retail stores,” Huang said.
TWi plans to spend between US$20 billion and US$25 billion on research and development each year, he added.
The company operates two factores in Jungli (中壢), Taoyuan County. The company is seeking opportunities for expansion, but there is no detailed plan at this moment, Huang said.