iX Biopharma remains a “buy” for PhillipCapital analyst Tay Wee Kuang, with an unchanged target price of 44.5 cents, as the specialty pharmaceutical company announced that it has entered into a strategic cooperation agreement to expand its presence in China.

The agreement was signed with China Resources Pharmaceutical Commercial Group Co (CRPCG), a subsidiary of Hong Kong-listed China Resources Pharmaceutical Group on April 6.

Under the agreement, CRPCG and iX Biopharma will work together to commercialise iX Biopharma’s entire specialty pharmaceutical and nutraceutical portfolio in China.

SEE:iX Biopharma enters agreement with Chinese pharmaceutical distributor to tap China market

CRPCG’s parent company, China Resources Pharmaceutical Group is the second largest pharmaceutical manufacturer and one of the three biggest drug distributors by revenue in China.

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While the extent of the cooperation has not been fleshed out yet, Tay sees the collaboration as positive, as it will provide iX Biopharma with an important gateway to the Chinese market.

“Due to the agreement’s non-exclusivity, iX can continue to look for partnership opportunities to expand its market presence there,” he writes in an April 8 report.

As the distribution specifics have not been decided yet, the analyst has kept his forecasts unchanged.

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“Stock catalysts [are] expected from potential out-licensing deals and [we expect a] six-fold increase in production capacity by FY2022,” he says.

“We remain confident in the growth prospects of the company. Partnership with one of the leading pharmaceutical groups in the competitive Chinese market is testament to the value iX is able to bring to the industry,” he adds.

As at 11.07am, shares in iX Biopharma are trading flat at 25.5 cents.