Key Takeaways:
- CSPC Pharmaceutical beat market forecasts with double-digit growth in first-quarter revenues and profits, driven by rising sales of drugs to treat strokes and dementia
- The company has dozens of candidate drugs in the pipeline, under the direction of a reconfigured management team
By Ken Lo
It can already fill pharmacy shelves with a wide range of approved drugs for the treatment of strokes, cancer, respiratory infections, diabetes, ulcers and hypertension.
But China’s CSPC Pharmaceutical Group Ltd. (OTC: CSPCY) is seeking to add even more medicines to its product list, including its own version of a weight-loss drug that has been racking up huge global sales.
In the pharmaceutical business, research to develop candidate drugs is never guaranteed to pay off, as products can fail to make it through three sets of clinical trials. Investors may get a better sense of a company’s value by tracking sales of packaged drugs that have already made it onto the market.
In the case of CSPC Pharmaceutical, earnings figures released last week send positive signals. Revenues rose 11.5% in the first quarter to 8.98 billion yuan ($1.24 billion) from the same period a year earlier, with sales of so-called finished drugs accounting for 84.2% of the income. Higher margins on the drugs business pushed net profits up 12.9% to 1.61 billion yuan.
The revenue and profit figures both exceeded market expectations. The company also reaffirmed its prediction of double-digit revenue growth for the whole year, expecting total sales of its 10 types of marketed drugs to reach $3 billion.
Accelerating Growth
Aside from drugs, CSPC Pharmaceutical sells vitamins, antibiotic products and food supplements, categorized in its accounts as bulk and functional food items.
In the first quarter, the company’s revenues from finished drugs surged 17.7% year on year …
