ScinoPharm Taiwan Ltd (台灣神隆), which makes active pharmaceutical ingredients (APIs), said it expects adverse market conditions to continue to affect its business this year.
The company’s core business of exporting generic drugs has been hit by falling prices as a series of mergers and acquisitions (M&A) raised the bargaining power of US-based drug distributors through joint procurements, it said.
The company also said it expects continued headwinds from a stronger New Taiwan dollar, after sales last year declined 6 percent due to exchange-rate fluctuations.
ScinoPharm on Friday reported that net income last year fell 36 percent annually to NT$422 million (US$14.4 million), with sales dipping 13 percent to NT$3.52 billion.
Earnings per share were NT$0.53, it said.
The company’s clients have trimmed their orders for Paclitaxel, a chemotherapy for ovarian and breast cancer, amid an inventory correction, while shipments of other major generic drugs were delayed due to the replacement and integration of product lines and factories in the wake of M&As among clients, ScinoPharm said.
However, the company said that manufacturing contracts for newly approved antibiotics Baxdela and Vibativ helped offset some of the lost sales in generic drugs.
ScinoPharm said that its partnership with Baxter International Inc has begun to bear fruit as it expands into the generic oncology injectibles market.
The partnership with the US-based Baxter enables the companies to jointly develop formulations while sharing the risks and profits, ScinoPharm said.
Royalties from its anticoagulant Fondaparinux last year increased significantly from a year earlier, it added.
As for the operations of its Changshu plant in China’s Jiangsu Province, ScinoPharm said that the increase in the plant’s revenue contribution has not been as fast as expected due to the rapidly changing environmental safety and health-related laws in China.
The company will continue with its strategy of integrating niche APIs and venturing into formulation, chief executive officer Fred Chen (陳勇發) said in a statement.
In terms of product selection, the company aims to prioritize the distribution of vertically integrated injectables, including small molecule injections and peptide APIs, Chen said.
Regarding the contract research and manufacturing business, the company is seeking new projects in targeted therapy and orphan drugs that have shorter development cycles, he said.
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