Duopharma’s Chinese vaccine get DCA approval


CGS-CIMB Equities Research maintains a growth forecast for Duopharma Biotech Bhd pending details in the supply agreement for the Sinopharm vaccine.

The research house retained its ‘Add’ call for Duopharma with an unchanged target price (TP) of RM3.67 due to the potential long-term earnings prospects from the development of vaccine manufacturing capabilities, which is a key rerating catalyst.

“We retain our ‘Add’ call on the stock with an unchanged TP of RM3.67 based on a CY22F P/E of 28.8 times (+2 standard deviations from its five-year mean).

“Key downside risks include weaker-than-expected earnings from the Covid-19 vaccine and lower-than-expected domestic and export pharmaceutical demand,” CGS-CIMB analyst Syazwan Aiman Sobri said in a note.

On July 16, Duopharma received conditional registration approval from Malaysia’s Drug Control Authority (DCA) for the Covid-19 Sinopharm vaccine developed by China National Biotec Group Co Ltd.

This followed Duopharma’s application for product registration of the vaccine, which is an inactivated virus vaccine registered under the name COVILO Suspension for Injection Covid-19 Vaccine (Vero Cell).

“While conditional approval has been given, we are not privy to further details for now as the supply agreement with Sinopharm has yet to be announced.

“We gather from a press conference by the National Covid-19 Immunisation Programme (NCIP) Coordinating Minister Khairy Jamaluddin Abu Bakar that Sinopharm vaccines will be brought in for use by the private market for now and will only be included in NCIP if supply issues arise for the existing vaccines in the NCIP portfolio,” he added.

Based on announcements by the authorities, the current vaccine supply in the NCIP portfolio includes those from Pfizer-BioNTech, Sinovac, AstraZeneca, Cansino and from the Covid-19 Vaccines Global Access facility.

To recap, Duopharma had previously announced that it signed an agreement to supply the Malaysian government with 6.4 million doses of the Sputnik V vaccine produced by the Gamaleya Institute of Russia.

Although the agreement was signed in June 2021, the vaccine has yet to receive registration approval from Malaysia’s DCA.

The Sputnik V vaccine has also incidentally yet to receive approval from the World Health Organisation.

If the Sputnik V vaccine receives approval, the procured doses could further pad the NCIP portfolio as Duopharma’s supply agreement with the government is intact.