| Cover Story |
june-july, 2020 | The Health
11
Growing
consumer
healthcare
business
The company started delving into
speciality products in 2010 which saw it
shift focus from small molecule generics.
“The primary reason for this shift in
focus was to differentiate ourselves within
an intensely competitive landscape that
we anticipated in the small molecule space.
While small molecules still make up a large
component of revenue for Duopharma
Biotech, the competition could lead to
compressed margins. We saw the speciality
sector as less crowded and therefore
potentially a more attractive space in
which to operate,” Duopharma Biotech
Group Managing Director Leonard Ariff
Abdul Shatar told The Health.
A strategy was developed for an
entirely new business via biologicals and
higher-end small molecules. This helped
Duopharma Biotech to become the first
Malaysian company to complete a full
clinical Phase III trial in Malaysia for a
biologic, Erythropoietin. The company
also registered the first monoclonal
antibody biosimilar, i.e. Zuhera
(Trastuzumab), and constructed
the first HAPI (Highly Potent Active
Pharmaceutical Ingredient) facility in
Malaysia, amongst its other initiatives.
According to Leonard Ariff, the speciality
area contributed about 20 per cent of total
revenue for Duopharma Biotech in 2019.
The company’s overall improved financial
performance for that year was attributed to
the higher sales demand from the private
and public health sectors.
“Our ethical Speciality and Classic
range of products is primarily driven
by our government-related business,
with the domestic private market as the
second-largest channel, incorporating both
ethical Speciality and Classics, as well as
consumer healthcare. Our International
Business contributes about 10 per cent
of total revenue. In 2019, the domestic
business segment continued to account
for a significant part of our revenue and
profit, which was circa 90 per cent of total
revenue.”
Attracting further
government contracts
Duopharma Biotech had its government
Approved Pharmaceutical Product List
According to Leonard
Ariff, the speciality area
contributed about 20
per cent of total revenue
for Duopharma Biotech
in 2019. The company’s
overall improved financial
performance for that year
was attributed to the higher
sales demand from the
private and public health
sectors.
Aligned with its expansion plans,
Duopharma Biotech Berhad has set up
a new subsidiary known as Duopharma
Consumer Healthcare Sdn Bhd to manage
its consumer healthcare business, which
currently contributes almost 20 per cent
of total revenue. The additional focus
on consumer healthcare will grow this
segment of its business given its recent
success on new launches of its Over The
Counter (OTC) brands such as Flavettes,
Uphamol, Proviton, Eyeglo and others.
Its Group Managing Director Leonard
Ariff Abdul Shatar said Duopharma Biotech
already exports to some 27 countries,
primarily within ASEAN, the Middle East and
Africa.
“The opening of new markets is a
continual process, especially as we develop a
portfolio of products that are differentiated.
Currently, the export market is about 10 per
cent of our revenue.”
Leonard Ariff also acknowledged
that there was much potential for halal
products in the EU and Middle East
markets. However, the registration process
remains a challenge as the regulatory
environment in international markets is
becoming increasingly stringent. In this
regard, Duopharma Biotech has embarked
on an initiative to upgrade the quality of
its dossiers of existing and new products
in addition to improving manufacturing
facilities.
Speaking of enhancing Malaysia’s
attractiveness for pharmaceutical
companies, Leonard Ariff pointed out that
Malaysia has a market of 34 million people,
which is considered small.
“To attract pharmaceutical companies to
Malaysia, we must consider various factors.
For example, the process of registering
drugs will play a role. Incentives that
companies will need to set up operations,
namely manufacturing facilities, need to be
attractive,” he shared.
Leonard Ariff added that other incentives
such as an attractive tax structure, market
access to the MoH, patent recognition,
availability of relevant human capital,
specific R&D capabilities and the creation
of an ecosystem to support the pharma
industry could entice more companies to
operate here.
(APPL) contract extended by a further 25
months from Dec 1, 2019, until Dec 31, 2021.
In addition, the company is seeking to bid
for further contracts called by the Ministry
of Health (MoH).
Leonard Ariff said that while the
company was pleased with the extension
of the government APPL contracts, it
remained cautious about raw materials
and supply chain costs, as well as the USD
exchange rate to the Ringgit.
“We anticipate global raw material
supply issues as supplier markets China
and India have been impacted by the Covid-
19 crisis. However, for 2020, we remain
committed to expanding our range of
speciality products while also augmenting
our small molecules portfolio.”