In the second quarter, Bora Pharmaceuticals reaped substantial profits, driven by gains from its acquisition of the U.S.-based USL Pharmaceuticals. The company reported after-tax net income of NT$12.14 billion for the quarter, marking a 73% year-over-year increase. This translated to earnings per share (EPS) of NT$11.61. For the first half of the year, Bora’s EPS reached NT$18.68, solidifying its position as the most profitable biotech stock.
However, there is concern regarding Bora’s gross profit margin, which dropped nearly 14 percentage points from the previous quarter to 38.81%. The operating margin also fell from 31.22% in the previous quarter to 14.77%. Market analysts are closely watching the company's profitability and gross margin performance for the second half of the year, making the upcoming earnings conference on August 28 a critical event.
In recent years, Bora Pharmaceuticals has aggressively expanded its business through acquisitions. After completing the acquisition of the century-old USL Pharmaceuticals in April and establishing a foothold in the U.S. pharmaceutical market, Bora successfully acquired Emergent BioSolutions' (NYSE: EBS) sterile injectable manufacturing facility in Camden, Maryland, on August 21.
These acquisitions are significant as they align with the trend of establishing manufacturing facilities in the U.S., particularly in light of the "BIOSECURE Act."
USL Pharmaceuticals, the largest pharmaceutical company in Minnesota, operates two manufacturing plants in Plymouth and Maple Grove, with a total of 48 products in mass production, including 38 with proprietary drug licenses and 10 distributed products. USL is currently the largest manufacturer of oral solid dosage forms in the U.S. The newly expanded Maple Grove facility, with a total investment of approximately US$130 million, also includes a dedicated logistics management center.
The Maple Grove plant is four times larger than Bora's Zhunan facility and is capable of meeting the local production needs of U.S. CDMO (Contract Development and Manufacturing Organization) clients while addressing the shortage of oral tablet production capacity. Additionally, the in-house logistics center at the new facility will save Bora millions of dollars annually in outsourcing costs.
The newly acquired sterile injectable manufacturing facility, spanning approximately 87,000 square feet, houses four sterile injectable production lines. It supports various technical processes and contract manufacturing services, including lyophilization, vial filling, and pre-filled syringe filling, for both experimental trials and commercial-scale production.
This acquisition not only strengthens Bora's capability in producing biotech sterile drug substances but also enhances its capacity to manufacture sterile injectable drug products, thereby adding a competitive edge to its large-molecule CDMO service offerings.
With the successful acquisition of USL Pharmaceuticals, Bora’s monthly revenue surged past NT$1.6 billion starting in April. For the first seven months, revenue reached NT$9.606 billion, representing a positive year-over-year growth rate of 6.88%. The additional contribution from the injectable facility is also expected to be a key focus at the upcoming earnings conference.
Overall, Bora Pharmaceuticals' recent acquisitions have not only driven global sales growth but also expanded its offerings in the CDMO sector. The company now provides a broader range of dosage forms and drug delivery technologies to its global clientele, further enhancing the value of its CDMO business.
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