ScinoPharm Taiwan (stock code 1789), a company specializing in the development of highly complex active pharmaceutical ingredients (APIs) and injectable formulations, announced that for the first half of 2019, its consolidated revenue totaled NTD 1.39 billion, net profit after tax was NTD 0.136 billion, and after-tax earnings per share were NTD 0.17. The consolidated revenue dropped by 24.76% on a year-on-year basis.
ScinoPharm, to grip with the dramatic change of global pharmaceutical industry in recent years, has strived to propel its overall responsiveness through effective internal integration and mobilization of resources and development of injectable formulations, and further external exploration and operation of various potential markets. Benefiting from its years of efforts on the Japanese market, for the first half of 2019, ScinoPharm enjoyed an increased demand from customers for distribution of drugs prior to marketing, which contributed to a sharp increase of revenue in the Japanese market. Sales performance is expected to be good in the Japanese market this year. In terms of joint development of injectable formulations, two products are projected to be sold in the fourth quarter, indicating that ScinoPharm is heading in the right direction of transformation: one of the products is the injectable formulation of adjuvant antiemetic drugs for chemotherapy patients, developed by ScinoPharm in conjunction with international manufacturer Baxter, with whom ScinoPharm works to develop formulations of generic drugs; and the other is the self-developed anticoagulant formulation - Fondaparinux. As for Scianda, changed name from ScinoPharm (Changshu) in 2016, due to the continued efforts by the management team to enhance internal integration and management efficiency, its operational status has been gradually improved. In addition to seeking business partners that can provide a complementary competitive edge, adding to and multiplying cooperative benefits, Changshu site will also take the opportunity to rise in the booming Chinese pharmaceutical market driven by the economic development and medical reform policies in China, by capitalizing on its strengths, including the quality of its facilities recognized by the pharmaceutical authorities in the United States and Japan and their compliance with the Environment, Health and Safety (EHS) regulations. Looking ahead, in terms of product selection strategy, ScinoPharm will continue the vertical integration of injectable formulations, including small molecule injectable and peptide products; for CRO business, it will mainly target at the orphan drugs and targeted agents that require short development cycles, so as to manage the timing of product development and commercialization, and grasp opportunities.
The reason for decrease in the delivery of generic APIs is the expectation that generic drugs will be marketed soon after the patents for major products expire and that the market tends to be conservative, leading to a reduction in the inventory of products. Another reason is that the change and weeding out of product lines and the integration of manufacturing facilities and production capacity after the merger and acquisition of customers have resulted in a greater variation in customer demand for products than ScinoPharm had expected, thus affecting the operation performance. On the business of contracted R&D and contracted manufacturing of new drugs, the demand for some products was not significant in the first half of this year due to the proactive pre-marketing inventory of products by customers last year and the drug use habits of drug users that are yet to be developed. In addition to sticking to the existing U.S. and European markets to secure market share, ScinoPharm has also continuously strengthened the development of potential markets and built a close and long-term symbiotic relationship with customers. Emerging markets, including Southeast Asian and Central and South American countries, have developed rapidly in their domestic economy and attached more importance to medical health, with significantly increased demand for small molecule drugs. At present, given their immature domestic pharmaceutical industry, emerging markets are relying on imports to meet their own demands, leaving promising market potentials. ScinoPharm will also continue to expand its business reach and seize business opportunities.
ScinoPharm passed the seventh on-site inspection by the U.S. FDA with Zero-483 form again in May this year, which is sufficient evident that the company’s quality management capability is up to international high standards. In the future, ScinoPharm will continue to optimize its manufacturing process, expand its contracted new drug R&D business, improve its capacity utilization, keep costs under control and improve its management efficiency, speed up product development, and actively cooperate with global strategic partners to transform itself into one of the few specialized dosage forms suppliers in the world.
About ScinoPharm Taiwan
ScinoPharm Taiwan is engaged in the production and development of APIs and injection products required for the contracted research and development of generic drugs and new drugs. It provides customers with one-stop shopping services using its vertically integrated structure from APIs to injectable formulations. It has more than 300 customers worldwide, including many of the world's top ten manufacturers of patented drug manufacturers and major generic drug manufacturers. Currently, the API products that have been developed by ScinoPharm Taiwan include anti-cancer drugs, drugs for the central nervous system, hormonal drugs, anti-virus drugs, etc. In addition, the company has completed the registration of Drug Master Files for its products in all major markets in the world; with more than 813 Drug Master Files registered globally, 60 of them in the United States. For more information, please visit the company’s website at http://www.scinopharm.com.