PHARMACEUTICAL companies continue to enjoy investor attention on increasing Covid-19 vaccine hopes and the positive newsbytes have turbo-charged the industry.
Pharmaniaga (pic below) has appreciated some 127% since it was identified by the Government for the fill-and-finish work of the vaccine in July 2020. In the past five days, the counter has gained 5% to RM5.25.
Duopharma Biotech Bhd is also identified to undertake fill and finish processes for Covid-19 vaccine. It has gained over 117% since July 2020 and 10% over the past five trading sessions.
Pharmaniaga has been on a roll. Early this week, the group announced that it signed an agreement with China’s Sinovac Life Sciences Co Ltd to purchase ready-to-fill Covid-19 vaccines and later to manufacture the vaccine domestically.
The pharmaceutical group has budgeted RM3mil to retrofit the plant to enable the production of the vaccine.
Pharmaniaga said that the company will carry out a fill-and-finish process of the vaccine in Malaysia, and will subsequently enter into local manufacturing, under license from Sinovac for its technology and know-how.
Analysts say the partnerships including technology transfer to grow the sector in Malaysia will be a positive for Pharmaniaga as the venture could bring in significant earnings contributions.
They note that Pharmaniaga is looking at vaccine development and manufacturing as a potential longer-term growth driver.
CGS-CIMB Research analysts Syazwan Aiman Sobri believes Pharmaniaga’s venture could bring in significant earnings before interest and tax (EBIT) contributions – about RM25.5mil for the production of 14 million fill-and-finished doses in FY21.
“Our FY21-FY22 earnings per share (EPS) forecasts are raised by 4.2%-19.7%, mainly to factor in the vaccine fill-and-finish venture contribution, ” he says, adding that it upgrades Pharmaniaga to hold, with a higher target price of RM5.41.
Syazwan says the commercial terms regarding vaccine pricing are undisclosed due to non-disclosure agreements signed between Pharmaniaga and Sinovac.
According to various reports, the price per dose of the vaccine is in the range of US$13.6-US$29.8, which CGS-CIMB believes could be the price range in finished form.
“As Pharmiaga is procuring the vaccines in bulk unfinished form, we have assumed a cost price of US$12 per dose for Pharmaniaga (circa15% discount to the lower end of the price range), ” Syazwan says.
Meanwhile, the clarity on Duopharma’s vaccine participation in Malaysia has increased following the Government’s announcement on Tuesday.
Science, Technology and Innovation Minister Khairy Jamaluddin reportedly said the next could be Duopharma, as the company is in talks with a Russian vaccine candidate.
RHB Research believes there is a high chance of Duopharma participating in the nation’s Covid-19 vaccination programme as it has the fill-and-finish capacity of six million vials or 60 million doses per year.
The research house has upgraded Duopharma to a buy with a higher target price of RM4 as the clarity on the company’s Covid-19 vaccine participation increases significantly.
Meanwhile, INIX Technologies Holdings Bhd has submitted its application for registration with Malaysian National Pharmaceutical Regulatory Agency (NPRA) pursuant to its earlier agreements to source Covid-19 vaccines from China.
The company said its wholly-owned iNix Network Sdn Bhd had submitted the application to NPRA on January 12.
Solution Group Bhd has obtained shareholders approval to diversify into pharmaceutical-related business at its EGM on Friday.
Its wholly-owned subsidiary Solution Biologics Sdn Bhd (SolBio) on Sept 23 entered into an agreement with CanSino Biologics Inc for both parties to collaborate on the manufacturing and commercialisation of the latter’s Covid-19 vaccine.
It has also obtained approval from the Health Ministry’s National Pharmaceutical Regulatory Agency for a design plan and layout of its vaccine fill and finish facility.
Separately, Khairy said the country will receive one million doses from Pfizer in Q1 2021,1.7 million doses in Q2,5.8 million doses in Q3 and 4.3 million doses in Q4.
Based on this delivery schedule, the vaccination priority list has been mapped out, with the first objective being to protect those who are most vulnerable.
Khairy, who is also the co-chair of the Special Committee on Covid-19 Vaccine Supply Access Guarantee, also addressed concerns surrounding Sinovac’s efficacy rate from its trial in Brazil.
“In Sinovac’s case, our TWG chaired by Dr Kalairasu Peariasamy, who is the Institute of Clinical Research director, is analysing the announcement and will advise me on the way forward, ” he said.