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Hyphens Pharma gears up for growth with product pipeline, Vietnam focus

Samantha Chiew
Samantha Chiew • 3 min read
Hyphens Pharma gears up for growth with product pipeline, Vietnam focus
SINGAPORE (July 9): Since its IPO in May last year, Hyphens Pharma International, the specialty pharmaceutical and consumer healthcare group, has gradually been building up its presence, both locally and in the region.
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SINGAPORE (July 9): Since its IPO in May last year, Hyphens Pharma International, the specialty pharmaceutical and consumer healthcare group, has gradually been building up its presence, both locally and in the region.

In 2018, Hyphens launched five products but more are expected this year with two dermatological products – Ceradan Advanced and TDF Fairence T-Complex – pending commercialisation.

According to Hyphens, Ceradan Advanced could be a potential bestseller given the product has a pH-balancing mechanism and contains ceramide which forms a barrier on the skin and helps it retain moisture.

Some existing Ceradan brand products -- currently sold through hospitals and clinics -- could also be marketed through retail pharmacies, making it more available for consumers.

It also signed an MOU with Accelerate Technologies, the commercialisation arm of Agency for Science, Technology and Research (A*STAR), for R&D collaboration on dermatological products for skin disorders.


See: Hyphens Pharma bets on proprietary products for growth

Meanwhile, under its specialty pharma principals segment, Hyphens is launching new products in the key market of Vietnam despite intensifying competition.

In May, Hyphens signed an exclusive distribution agreement with Danish pharmaceutical company Lundbeck, to distribute drugs to treat central nervous system disorders.

A month later, the group announced it was rolling out bioabsorbable metallic implants which help keep broken bones heal and grow, given it was the exclusive distributor for Syntellix AG products.


See: Hyphens Pharma launches Magnezix's bioabsorbable metallic implants in Vietnam

From FY15 to FY18, revenue from the group’s specialty pharma principals saw a CAGR of 20%, most of it from sales in Vietnam.

In a July 3 report, RHB Research lead analyst Lee Cai Ling says Hyphens is a fundamentally well-run company helmed by an experienced management team with growth opportunities while management is also mindful of rewarding its shareholders.

“We believe the specialty pharma principals and proprietary brands segments are equipped for growth in the near term.”

Over the next three years, Lee expects sales in the Vietnamese market to grow 5-8% and sales of the group’s proprietary brands segment to reach about $24.4 million in FY21 from $13 million in FY18.

“We expect the growth momentum to continue in the near term, as it continuously reaches out to existing and prospective buyers,” says Lee.

In 1Q19, Hyphens saw a 20.3% drop in earnings to $1.4 million from a year ago mainly due to an 11.8% fall in revenue to $27 million and a 20.4% increase in administrative expenses to $2.5 million.


See: Hyphens Pharma's 1Q earnings fall 20% to $1.4 mil on lower revenue, higher admin expenses

The stock is currently trading 9.6 times FY19 earnings with a yield of 2.8%, which Lee says “undervalues its potential”.

RHB has initiated a “buy” on Hyphens Pharma with a target price of 25 cents.

As at 3.10pm, shares in Hyphens Pharma are trading at 20 cents. The stock has declined by 28.5% from 28 cents since listing in May 2018.

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