The news
iX Biopharma has entered into a strategic cooperation framework agreement with CRPCG. iX Biopharma and CRPCG will work together to commericalise iX’s entire specialty pharmaceutical and nutraceutical portfolio in China.
The extent of cooperation for the different products will be decided later but the scope of cooperation will include product registration, manufacturing, distribution and promotions.
What this means
iX’s China presence is currently limited to its licensing agreement for Wafesil™ with Yiling Pharmaceutical (002603 SZ, Not Rated) and online sales of its nutraceutical portfolio on Tmall and JD.com.
The agreement will give iX access to CRPCG’s distribution network covering the entire country. CRPCG is one of the three largest pharmaceutical distributors by revenue in China. It wholesales its drugs to pharmacies, hospitals and medical institutions and also retails through its own pharmacies.
The broad-based collaboration will give iX Biopharma a strong partner to distribute its products in China, providing 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.
Pending distribution specifics, we have not changed our forecasts.
Recommendation
Maintain BUY with an unchanged DCF TP of S$0.445. 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
