PETALING JAYA: Duopharma Biotech Bhd
’s latest contract wins for the supply of human insulin from the Health Ministry (MOH) has provided some clarity on the issue, but was nevertheless below most analysts’ expectations.
The company secured a RM65.1mil contract for the supply of recombinant human insulin formulations until May 15, 2026; and RM52.5mil contract for the supply of insulin injection until Feb 5, 2028.
UOB Kay Hian (UOBKH) Research stated the awards imply that in 2026 Duopharma will supply RM91.4mil worth of insulin, which is slightly below its assumption of RM100mil while the RM52.5mil award over two years was a significant shortfall to its previous assumption.
Duopharma’s previous insulin contract was for RM375mil over a period of three years, but expired in April last year.
While translating to RM125mil per annum, the previous contract value was only indicative in nature as Duopharma only recognised RM80mil in 2024, the research house noted.
“While the sales shortfall accounts for 1% and 7.2% of our 2026 to 2027 sales forecast, the earnings impact is at minus 0.7% and 5% respectively.
The earnings impact is more digestible as insulin margins are among the lowest of all product categories.
“While the outcome has been disappointing, the award has laid to rest uncertainty that has been an overhang for over the last one year,” UOBKH Research stated on the subject matter.
It has maintained a “buy” call on the stock but at a lower target price (TP) of RM1.62 a share (from RM1.67) after trimming its forecast.
“We like Duopharma for its defensive and domestically driven growth and as a foreign exchange (forex) tailwind beneficiary,” it noted, adding the valuation is pegged to 15.3 times price earnings (PE) multiple.
Duopharma’s human insulin contract contributed about 8% to 10% of financial year 2024 (FY24) and an estimated 12% of FY25 revenue.
TA Research believes the three-year contract worth over RM400mil for insulin remains intact and is likely to be awarded once a second supplier is ready, in line with the MOH’s policy that requires a minimum of two suppliers.
Unlike UOBKH Research, TA Research has raised its FY26 and FY27 earnings estimates for Duopharma by 1.2% and 1.3% respectively after increasing its revenue assumptions by 2.4% and 2.7%, respectively, to incorporate contributions from the new insulin injection contract.
It has kept its “buy” call on the stock and lifted its TP for Duopharma higher to RM1.72 a share (from RM1.70), based on an unchanged 16 times 2026 earnings per share.
RHB Research said Duopharma’s fourth quarter (4Q25) usually tends to be seasonally softer but 4Q25’s profitability could benefit from active pharmaceutical ingredient price normalisation and a weaker US dollar.
It revised Duopharma’s 2025 to 2027 earnings by 0%, 3% and –3% to incorporate the new contract, updated forex assumptions and changes in input costs.
The research house also lifted its TP on the stock to RM1.65 a share (from RM1.60) with valuation implying a 16.2 times FY26 PE.
