PETALING JAYA: Duopharma Biotech Bhd
is in good position to sustain its insulin-related earnings contribution over the next few years following its latest contract win from the Health Ministry (MoH).
The award is seen as a strategic platform for future growth despite a lower share of the human insulin market, according to some analysts.
Kenanga Research said the pharmaceutical group’s newly secured RM155mil contract to supply recombinant human insulin over three years was in line with expectations, and which reinforced its long-term prospects in the public healthcare segment.
“Securing foundational human insulin contracts is a strategic stepping stone for Duopharma eyeing the upcoming 2028 tenders for insulin analogues.”
The contract had been previously guided as a potential tender win and came within Kenanga Research’s expectations.
As a result, the firm reiterated its “outperform” call on Duopharma, with a target price (TP) of RM1.72, while maintaining the stock as its top healthcare sector pick.
Beyond the latest award, Kenanga Research expects stronger public sector sales in the financial year ending Dec 31, 2026 (FY26), noting that demand under government supply contracts typically peaks in the final year of the contract cycle.
The research house also expects the current MoH’s Approved Product Purchase List (APPL) contract, which expires on Dec 31, 2026, to be extended by six to 12 months.
“In our view, this is not likely to come in as a surprise based on prior precedent back in 2023,” it said.
Kenanga Research noted that the APPL tender process generally takes seven to nine months from the initial request for bids through negotiations and selection.
However, Duopharma has yet to receive any notification or request for proposals for the next cycle.
For the upcoming APPL contract cycle, the company aims to retain its existing product portfolio while securing the inclusion of 30 new products.
Meanwhile, TA Research said the new contract’s value was substantially lower than Duopharma’s previous three-year human insulin contract worth RM375.2mil, but stressed that the outcome was largely anticipated.
“In absolute terms, this new three-year human insulin contract worth RM155.3mil appears significantly smaller than Duopharma’s previous three-year contract valued at RM375.2mil.
“However, this outcome is largely in line with our expectations and management’s guidance,” the research house said.
TA Research estimates Duopharma generated approximately RM280mil in insulin sales between FY22 and FY24, compared with the earlier contract value of RM375.2mil.
Under the previous arrangement, 80% of MoH’s human insulin requirements were supplied by Biocon through Duopharma, while the rest came from Novo Nordisk.
Under the new contract, TA Research expects Duopharma to supply 30% of MoH’s human insulin volume, with Pharmaniaga supplying the balance.
