As Vietnamese drug makers prepare to develop new products to increase efficiency and support sustainable growth, competition from imported drugs is making their way more difficult.
Traphaco JSC, the country’s second-largest publicly traded drugmaker, launched the commercialization of new products on December 9 through technology transfer from South Korea’s Daewoong.
Kim Dong Hyu, Deputy General Manager of Traphaco, said, âThe technology transfer is an important step that will bring important values ââto Traphaco, not only in terms of revenue growth and financial efficiency, but also strengthens the position of Traphaco on the market.
Cooperation with Daewoong is one of Traphaco’s key activities for the next five years, aiming to increase total revenues by 13.3% and profit before tax by 15%. The technology transfer will cover 70 products. The goal is within reach as Daewoong is one of the leading manufacturers and distributors of prescription drugs in South Korea.
In the first phase, the transfer covers drugs for liver, cardiovascular and gastric diseases. The second phase, which started in August, focuses on products with high market potential and processing efficiency.
Besides Daewoong, Traphaco is intensifying its cooperation and partnerships, notably with South Korean pharmaceutical companies to diversify its product portfolio, focusing on links with those able to compete in tenders and the hospital channel, thus increasing the market share of the oriental medicine segment.
The drugmaker, which now holds the South Korean leadership, has three large shareholders: State Capital Investment Corporation (35.67%), Magbi Fund Ltd. (24.99%) and Super Delta Pte., Ltd (15.12%).
Like Traphaco, DHG Pharmaceutical JSC offers new products from its two production lines that meet Japanese GMP standards certified by the Japan Pharmaceuticals and Medical Devices Agency. This year, DHG made 100 products eligible for the hospital circuit from the lines, allowing the company to gain a competitive advantage in tendering and revenue generation.
With Japanese Taisho as the largest foreign shareholder with 51.01 percent, the company plans to develop two more production lines focused on cardiovascular disease and diabetes which are on the rise in Vietnam.
DHG Managing Director Masashi Nakaura said, âThe year marked a decade of innovation as DHG strived to provide people with world-class medicines. In this dynamic of growth, we plan to recruit talents in 2022 and to evolve the image of the company towards an international image with a vision of stable growth of 6 to 7% per year over the next five years. .
Elsewhere, Imexpharm (IMP), Vietnam’s fourth-largest publicly listed drugmaker, announced its new Cephalexin 500 mg produced at its high-tech plant in Binh Duong, which has been granted marketing authorization in Spain. . The factory meets EU-GMP standards. IMP is also seeking EU-GMP recognition for its IMP 4 plant with the aim of venturing further into the ethical medicines segment, which is expected in 2022. SK Investment Vina III Pte., Ltd. is now IMP’s largest foreign shareholder with 29.42%. percent.
The change in business strategy has greatly contributed to the improvement of the business result of the company. In the first nine months of 2021, Traphaco achieved nearly $ 69.6 million in revenue and after-tax profit of $ 8.51 million, up 21.9% and 38, respectively, 5% year-on-year. The result comes mainly from self-produced drugs. Traphaco expects new products from the technology delivery to further increase revenue next year.
Likewise, DHG made an after-tax profit of $ 26.34 million, up 14.5% year-on-year.
However, not all drug makers shared such results. IMP saw its net income fall 1.4% year-on-year to $ 37.83 million, while its profit before tax fell 7.3%.
Industry insiders have said pharmaceutical companies will face challenges meeting year-round growth targets set earlier this year. Global disruption of supply chains, rising global transportation costs and a sharp rise in the cost of ingredients due to the protracted pandemic are possible hurdles.
Vietnam’s pharmaceutical industry saw weak growth of 3% in 2020, according to SSI Securities Corporation. At the start of 2021, Fitch Ratings predicted that the industry would grow 8.7% this year. However, the pandemic brought industry performance to a halt in the third quarter.
In addition, local pharmaceutical giants face fierce competition from imported pharmaceuticals. According to a report by the Vietnamese Customs Department in 2020, Vietnam imported $ 3.3 billion in pharmaceuticals, up 7.4% year on year.