Shares of drug maker Taiwan Liposome Co (TLC, 台灣微脂體) soared close to the daily limit of 7 percent yesterday after the company secured a sales deal for China with US-based SciClone Pharmaceuticals.
Taiwan Liposome’s stock jumped 6.84 percent to end at NT$328, while the GRETAI Securities Market index closed up 1.66 percent.
In a filing to the Taiwan Stock Exchange, the firm said it had sealed a US$39.5 million deal with SciClone for ProFlow, a drug used to treat peripheral arterial disease.
The agreement grants SciClone a license and exclusive rights in China, Hong Kong and Macau to distribute and sell ProFlow, the company said.
“China is becoming an increasingly prominent market and we are very pleased to be working with a NASDAQ [listed] company such as SciClone that has a strong presence in China,” TLC chairman and chief executive officer Keelung Hong (洪基隆) said in a statement on Tuesday.
Taiwan Liposome said it had received an initial payment of US$1.5 million from SciClone, with the rest of the money to be made up of clinical, regulatory and sales milestone payments.
Currently sold in Japan, South Korea and the US, ProFlow, which has a shelf life two times longer than other similar drugs, is expected to be on sale in China by 2016, providing the drug passes clinical testing and receives authorization from China’s Food and Drug Administration, Taiwan Liposome said.
The global market for peripheral arterial disease is about US$600 million, and China accounts for one-third of that, the firm said.
There are still about 15 years remaining before the firm’s patent in China on ProFlow expires, it added.
Heather Chang (張雅雯), an analyst at Fubon Securities Co (富邦證券), said the size of the deal was bigger than she had forecast.
She estimates that TLC would receive between NT$100 million and NT$200 million (US$3.3 million to US$6.6 million) from the deal this year, which is not enough for it to turn a profit.
“Taiwan Liposome has to generate revenue of between NT$400 million and NT$500 million this year for it to swing to the black. Thus, it is crucial for the company to acquire approval for its Doxisome [product] to be sold in Europe and its Ambil [product] in Europe and the US by this year,” Chang said in a note yesterday.
However, SinoPac Securities Co (永豐金證券) forecast that the company could receive up to NT$50 million from the deal this year, which means the company could post losses of about NT$90 million, or NT$1.67 per share, for this year due to expenditure for clinical trials.
The company reported a loss of NT$6.09 million last quarter, or NT$0.14 per share. Last year, the company’s losses were NT$187.13 million, or NT$4.75 per share.