The Straits Times / The Business Times News on AsiaPharm

AsiaPharm Q2 net profit quadruples to 16m renminbi

Firm expects to continue doing well, with 2 new drugs

By Jean Chua - Aug 21, 2004
The Business Times

Mainboard-listed AsiaPharm Group has more than quadrupled second quarter net profit to 16.1 million renminbi (S$3.3 million) as it sold more drugs and research findings from its laboratories.

Group sales rose 75.4 per cent to just over 93 million renminbi for the second quarter, up from a proforma 53 million renminbi for the same period last year.

The China-based pharmaceutical maker, which will start selling two new drugs next month and in October, expects to continue doing well, largely on its Maitongna brand of anti-inflammatory and anti-swelling prescription injection used mainly in orthopaedics and neurology.

The drug, based on sodium aescinate, has an 80 per cent market share in China.

'We are going to be less dependent on this single drug,' said Liu Dianbo, executive chairman of AsiaPharm. 'Although we are cornering this market, the sales of our other drugs are also growing very fast.'

For example, sales of Lutingnuo, which was launched early last year, rocketed 11-fold for the second quarter. The drug is for treating liver ailments.

Sales of research & development, meanwhile, jumped 54.5 per cent to 13.6 million renminbi on recognition of research-related contracts signed last year. AsiaPharm has 110 researchers working on 28 new drugs, mostly for menopause and Alzheimer's.

Mr Liu said the company invests about 10-20 million renminbi a year on R&D and recently collaborated - through subsidiary Shandong Luye Pharmaceutical - with Yantai University to set up a pharmaceutical college.

AsiaPharm hopes the tie-up will enhance Shandong Luye's research facilities and capabilities, and produce medicines that AsiaPharm can market successfully to its customer base of 1,500 hospitals. 'It's really a win-win case, because the university gets the funding it needs for its professors to do the research, and we get the patent rights to the research,' Mr Liu said.

The group has started manufacturing two drugs - Elcatonin for Injection, used to treat osteoporosis, and Vinpocetine for Injection, for neurological ailments - and will sell the first drug from next month.

Besides selling its own products, AsiaPharm distributes third-party pharmaceuticals but expects that business to wind down gradually because margins are not attractive, Mr Liu said.

It also processes and sells active ingredients with medicinal properties found in natural ingredients.

'We target to introduce one to two new products every year to further strengthen our market leadership in the pharmaceutical industry,' Mr Liu said.

In the stock market yesterday, AsiaPharm closed half a cent down at 57.5 cents.