PETALING JAYA: Fresh from exiting Practice Note 17 (PN17) status, Pharmaniaga Bhd
is banking on its expansion into insulin and other biopharmaceutical products to sustain its recovery after chalking up nine consecutive profitable quarters.
The pharmaceutical group said its turnaround is being driven by tighter operational focus, cost optimisation and a stronger push into higher-margin manufacturing activities.
Managing director Datuk Zulkifli Jafar said Pharmaniaga’s strategy now centres on two core businesses – logistics and distribution, and manufacturing.
“We have recorded nine consecutive quarters of profits.
“We are very focused now. We do not venture into other businesses,” he said during a media briefing after its annual general meeting and EGM here yesterday.
While its concession-based logistics business continues to anchor revenue, the group is accelerating automation and digitalisation efforts to improve margins.
“So then what we need to do is that we are moving into digitalisation and automation,” Zulkifli said, adding that Pharmaniaga is also testing fully automated warehouse operations to lower labour costs.
The bigger earnings driver, however, is expected to come from manufacturing, particularly high-value generic drugs and biopharmaceutical products.
Pharmaniaga recently secured its first government contract to supply human insulin to public hospitals, valued at about RM281.7mil over three years.
The contract is expected to make the company the first local manufacturer of human insulin in Malaysia.
The company is targeting scaling up production at its Puchong facility, with plans to eventually produce up to 25 million insulin cartridges annually by early 2028.
Zulkifli said the insulin market offers strong long-term growth potential given Malaysia’s rising diabetes rates.
“Currently in Malaysia, you have a 3.5 million population. By 2030, sadly, five million of the population is expected to be diabetic,” he added. “So in terms of that, the market for insulin is quite huge.”
Beyond human insulin, Pharmaniaga is also eyeing insulin analogues and glucagon-like peptide-1 receptor agonists, including liraglutide and semaglutide, which are used in diabetes and obesity treatments.
The company expects manufacturing margins to be significantly higher than those from logistics and distribution.
“Our larger margins come from manufacturing”, Zulkifli said previously, noting the group aims to grow manufacturing revenue to RM1bil by 2030.
Pharmaniaga slipped into PN17 status in 2023 after incurring heavy losses from a RM552.3mil impairment linked to unsold Covid-19 vaccines.
Since then, the company has undertaken a major regularisation exercise involving a capital reduction, rights issue and private placement, enabling its exit from PN17 in March this year.
The company secured shareholder approval for its proposed five-for-one share consolidation at its EGM, with completion expected in early June 2026.
Zulkifli said the group remained firmly guided by its Vision ONE30 strategic roadmap, which outlines Pharmaniaga’s ambition to become Malaysia’s most valuable pharmaceutical company by 2030.
“Vision ONE30 provides a clear roadmap for Pharmaniaga to strengthen its core businesses, advance its biopharmaceutical capabilities and enhance operational efficiency as it works towards achieving RM300mil in profit after tax and a market capitalisation of at least RM3bil by 2030.”
Meanwhile, the group acknowledged that geopolitical tensions and rising freight costs could pressure supply chains and input costs, although it said buffer stocks have been increased to ensure sufficient medicine supply.The company is also optimistic enough about its earnings outlook to resume shareholder payouts.
“Yes, that is our intention. For Pharmaniaga, we have always declared quarterly dividends. Whenever we have a profit, we declare dividends.
“So, we are targeting (to declare dividends) next quarter as well,” Zulkifli said.
Pharmaniaga saw a 6.4% increase in net profit to RM31.5mil for the first quarter ended March 31, 2026, boosted by stronger demand for in-house manufactured products from government hospitals.
The company reported an interim dividend of 0.25 sen a share for the quarter.
