The Straits Times / The Business Times News on AsiaPharm

AsiaPharm shares jump 8.85% in active trading

ASIAPHARM shares gained as much as 8.85 per cent yesterday, after the company said on Tuesday that it had bought rights to make a chemical sensitiser for radiotherapy used in cancer treatment. It was among the day's most active stocks, with 12.85 million shares traded.

Shares in the China-based drugmaker hit an intraday high of 61.5 cents, a day after it it had bought the rights from Lifetech Pharmaceuticals in Guangzhou, which makes a cancer treatment injection drug known as CMNa (sodium glycididazole for injection). The 80 million yuan (about S$16 million) acquisition consists of the international and Chinese patents, process technology, manufacturing licence, distribution and all rights to the registration of CMNa in China.

The stock closed at 60.5 cents, rising 7.1 per cent on the day.

Broker CIMB-GK issued an 'outperform' call on the stock, with a target of 67 cents.

'We are keeping our earnings estimates pending further details from the analysts' briefing later (in the day),' CIMB-GK wrote. 'We believe the CMNa acquisition will open new opportunities for AsiaPharm to penetrate international markets with its international patents and enhance the oncology products segment of the group.'

CMNa is included in the health insurance scheme coverage list and AsiaPharm can assimilate CMNa's network and product portfolio into its own in China, CIMB-GK said.

This is AsiaPharm's first acquisition since it did a placement in May in which it raised S$63 million. About $55 million of the proceeds was slated for financing acquisitions within and outside China, AsiaPharm said.

According to AsiaPharm, CMNa is the world's only approved chemical sensitiser for radiotherapy used in cancer treatment. The drug is patented in the US and the European Union, and is awaiting approval in Japan.

CMNa is classified as a Class One New Drug by China's SFDA. This means that it has 12 years of administrative protection that prevents the duplication, marketing and import of similar products in China till 2014.

CMNa also has proprietary product pricing rights in the PRC, which exempt it from price reductions imposed by regulators, AsiaPharm said. In 2005, cancer was the top cause of death among the urban population in China, accounting for 22.94 per cent of the national mortality figure, according to the Chinese health ministry.