iX Biopharma - Phillip Securities 2021-04-08: Fanning Out In China

IX BIOPHARMA LTD. (SGX:42C)

iX Biopharma - Fanning Out In China

iX Biopharma entered strategic cooperation agreement with China Resources Pharmaceutical Commercial Group Co., Ltd (CRPCG).
iX Biopharma will be able to piggyback on CRPCG’s network for the commercialisation of its products in China.
No change to forecasts. Maintain BUY and DCF (WACC 10%) target price of S$0.445. Stock catalysts expected from potential out-licensing deals and sixfold increase in production capacity by FY22e.

iX Biopharma (SGX:42C) has entered into a strategic cooperation framework agreement with China Resources Pharmaceutical Commercial Group Co., Ltd (华润医药商业集团有限公司, CRPCG).
CRPCG is a subsidiary of China Resources Pharmaceutical Group (3320 HK, 华润医药集团有限公司), the second largest pharmaceutical manufacturer and one of the three largest drug distributors by revenue in China.
iX Biopharma and CRPCG will work together to commericalise iX Biopharma’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.

iX Biopharma’s China presence is currently limited to its licensing agreement for Wafesil™ with Yiling Pharmaceutical (002603 SZ) and online sales of its nutraceutical portfolio on Tmall and JD.com.
The agreement will give iX Biopharma 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 Biopharma can continue to look for partnership opportunities to expand its market presence there.
Pending distribution specifics, we have not changed our forecasts.

Maintain BUY on iX Biopharma with an unchanged DCF target price of S$0.445.
We remain confident in the growth prospects of iX Biopharma. Partnership with one of the leading pharmaceutical groups in the competitive Chinese market is testament to the value iX Biopharma is able to bring to the industry.
See IX Biopharma Share Price; IX Biopharma Target Price; IX Biopharma Analyst Reports; IX Biopharma Dividend History; IX Biopharma Announcements; IX Biopharma Latest News.

Tay Wee Kuang Phillip Securities Research | https://www.stocksbnb.com/ 2021-04-08

SGX Stock Analyst Report BUY MAINTAIN BUY 0.445 SAME 0.445