ScinoPharm Taiwan Ltd (台灣神隆) yesterday said it expects sales to grow steadily this year, but added that it plans to diversify its business from generic active pharmaceutical ingredients (API) to contract manufacturing and research services in a bid to avoid an intense price competition in the generic API market.
The Tainan-based pharmaceutical company reported revenue of NT$3.52 billion (US$114.3 million) for last year, inching up 0.2 percent from a year earlier.
However, thanks to cost controls, net profit rose 4.9 percent annually to NT$443 million, or earnings per share of NT$0.56, the company said.
Revenue from generic API accounted for 65 percent of total revenue, maintaining its top ranking, while combined revenue from contract manufacturing and research services made up 34 percent, company data showed.
ScinoPharm this year expects to gain regulatory approval in the US to supply generic APIs for a treatment for breast cancer and benign prostatic hyperplasia, as well as approvals in China and Japan for two other generic APIs, ScinoPharm marketing and sales vice president Portia Lin (林靜雯) told an investors’ conference in Taipei.
“However, we found that the prices of generic APIs fell significantly due to intense competition, and we could not win over our peers in countries with lower manufacturing costs, such as India and China,” Lin said.
ScinoPharm’s revenue from generic APIs last year fell 5.6 percent annually to NT$75.8 million, but revenue from contract manufacturing and research services jumped 10.4 percent and 64.7 percent annually to NT$17.2 million and NT$22.4 million respectively, company data showed.
Instead of seeking more API clients, the company plans to expand its contract manufacturing and research services this year, in the hope of boosting revenue contribution from the two segments to 40 percent of overall revenue.
This year, the company aims to focus more on the markets in Japan and China, which offer faster growth opportunities, compared with slowing growth in the US and Europe, where opportunities are further constrained by large-scale mergers and acquisitions in the pharmaceuticals sector, ScinoPharm said.
ScinoPharm shares yesterday rose 1.14 percent to NT$26.7 in Taipei. They have advanced 10.56 percent since the beginning of this year, compared with the broader market’s 9.41 percent rise over the same period.
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