Duopharma Biotech to expand consumer healthcare business

KUALA LUMPUR (June 17): Duopharma Biotech Bhd said its strategies moving forward include expanding its consumer healthcare (CHC) product portfolio and diversifying into high-value biologicals and niche products.

Leonard Ariff Abdul Shatar, the group’s managing director, said the CHC business had contributed greatly to the group’s overall strong results.

The sector’s strong performance, he said, was largely driven by the group’s Flavettes Effervescent vitamin C product, which had rapidly become the bestseller among immune-boosting products.

“The year saw us maintain our position as the leading pharmaceutical company in Malaysia in terms of sales volume and second in terms of sales value,” he told the media after the group’s virtually held annual general meeting.

Leonard Ariff said the group is also well into expanding its CHC product offering.

“I am happy to share that Duopharma Biotech is the first pharmaceutical company to commercialise erythropoietin branded as Erysaa, a biosimilar product in Malaysia manufactured at our fill-and-finish facility in Klang,” he said.

As for its specialty product portfolio, he said the group’s s breast-cancer treatment drug, Letrozole, will be launched soon. It is the first cancer drug in the country to be produced at a highly potent active pharmaceutical ingredient (HPAPI) plant.

Product registration submissions to the National Pharmaceutical Regulatory Agency to manufacture Letrozole tablets had already been approved, said Leonard Ariff.

Furthermore, Duopharma Biotech said it had continued to expand its halal portfolio to distinguish itself from its peers.

“We are motivated to grow the halal pharmaceutical segment both because of the huge business potential it presents, and [for] all discerning consumers peace of mind knowing they can avail of the best medical treatments that are halal-certified under MS2424:2019, the first halal pharmaceutical standard in the world.

“This strengthens our position as the halal pharmaceutical industry leader. I am pleased to share that no less than 95% of all Duopharma Biotech-manufactured products are halal-certified,” Leonard Ariff said.

The group’s successful bid for halal certification for Erysaa from the Korean Muslim Federation marks a significant milestone as it is the first biosimilar drug to receive halal certification anywhere in the world.

In terms of facility upgrades, Leonard Ariff said good progress had been made by Duopharma Biotech in its manufacturing optimisation strategy via investments made in new assets, automation and the adoption of cutting-edge technologies to increase operational efficiencies.

“During the year, we replaced the softgel encapsulation machine at our manufacturing plant in Bangi with a new system that provides improved efficiency, fill volume accuracy and sustainability of supply to our customers,” he said.

To widen its appeal to new markets, the group is also pivoting good manufacturing compliance practices to the European Union's GMP standards, which saw its first HPAPI plant in Malaysia officially receive the Certificate of GMP Compliance on Aug 21, 2019.

Asean pivotal towards international business

Duopharma Biotech's Asean market activities contributed the most to its international business in 2019, charting a 21% growth, which included a better performance in the Brunei and Myanmar markets.

“As part of our efforts to strengthen our Asean presence, we are regaining our foothold in Vietnam and Laos. We are currently identifying potential partners in both markets, and product registration is also ongoing,” he said.

On a separate note, the group’s Korean partner, SCM Lifescience Co Ltd, was listed on KOSDAQ at an initial public offering (IPO) price of 17,000 won (RM59.93) per share today.

SCM Lifescience is involved in the field of regenerative medicine of high-purity isolation and cultivation of mesenchymal stem cells.

On prospects, Leonard Ariff was cautiously optimistic about Duopharma Biotech’s performance for the financial year ending Dec 31, 2020 (FY20) on the back of an increase of 6.6% in allocation for the healthcare sector to RM30.6 billion, the highest-ever allocation in Malaysian history.

He also shared that the group’s approved product purchase list (APPL) contract with the government had been extended for 25 months until Dec 31, 2021.

In addition, the contract period of the offtake agreement programme (OTA) for the supply of human insulin formulations has been extended for one year to Dec 1, 2020.

“Additional allocation has been provided to the Ministry of Health as part of measures to combat the Covid-19 outbreak. This augurs well with the group as approximately 50% of our sales are to the public service sector. In this aspect, we are optimistic that the healthcare sector will continue to grow in 2020,” said Leonard Ariff.

Moving forward, the group envisages adopting automation of Duopharma Biotech’s operations to increase efficiency and productivity.

“We will also continue to adopt lean practices, implemented carefully in stages, and I hope that we will be well positioned for Industry 4.0 by elevating all of our operational activities to achieve operational excellence,” he said.

To boost digitalisation of the healthcare industry, Duopharma Biotech recently invested more than RM1 million in a local digital therapeutic pioneer, Naluri Hidup Sdn Bhd, to provide an online holistic health management platform, Naluri App.

Naluri App is a new digital health programme that combines behavioural science, data science and digital design to help achieve a healthy lifestyle conveniently and affordably.

For FY19, Duopharma Biotech ended on a strong note with its net profit increasing 17% to RM55.27 million, from RM47.64 million a year ago, on higher revenue of RM576.46 million from RM498.72 million.

The group posted a slight drop of 6.22% in net profit to RM13.56 million for the first quarter ended March 31, 2020 (1QFY20), compared with RM14.46 million the year before, on the back of an increase in revenue to RM158.71 million from RM150.38 million.

Duopharma Biotech’s share price closed five sen or 3.03% higher at RM1.70 today, giving it a total market capitalisation of RM1.16 billion.