At an investor conference on the 5th, PharmaEngine announced that its pancreatic cancer drug, Onivyde®, could secure National Health Insurance coverage in China as early as November or December. Additionally, sales are thriving in the European and Asian markets through its licensing partners, positioning PharmaEngine to potentially receive a substantial milestone payment for Onivyde® in February next year.
Industry analysts estimate this milestone payment could reach up to NT$1.7 billion, providing a strong boost to PharmaEngine's Q1 2025 earnings.
During the online investor conference, PharmaEngine shared these promising updates about potential inclusion in China’s National Health Insurance and the anticipated milestone payment, both of which would significantly benefit the company’s financial outlook.
In its recently released Q3 financial report, PharmaEngine posted a quarterly net income of NT$92.17 million, a 14.1% year-on-year increase. Net income for the first three quarters reached NT$332 million, reflecting 40% growth year-over-year, with an EPS of NT$2.32. The company anticipates that Onivyde® will continue to gain traction in the fourth-quarter international market, especially in the US, Europe, and China.
PharmaEngine's revenue currently stems from three primary sources: (1) its direct sales in Taiwan, where Onivyde® has been approved as a first-line treatment for pancreatic cancer and is awaiting National Health Insurance pricing approval, potentially by next year; (2) royalties from sales rights granted to its licensing partners in Europe and Asia; and (3) milestone payments at various development stages from its licensing partners.
The company detailed its European and Asian market strategy, where Onivyde® entered the German market through a licensing partner this year and plans to expand to additional countries in both Europe and Asia, including Japan and China. Last year, China contributed only 1.5% of PharmaEngine’s revenue, but this has already increased to 5%. Previously sold at out-of-pocket prices in China, Onivyde® is now under review for National Health Insurance coverage, which, if successful, could be approved by the end of the year.
A notable highlight is the potential milestone payment PharmaEngine expects due to Onivyde®’s robust performance in Europe and Asia. According to its licensing agreement, PharmaEngine is entitled to three milestone payments. The first payment of NT$569 million was recorded in 2020, and based on this year’s sales performance, the second milestone payment is expected to be finalized in February 2025.
Analysts predict that about half of the upcoming milestone payment will come from the Japanese market. Although the recent depreciation of the Japanese yen may slightly impact the payment amount, the limited forex impact expected in Q4 should keep the milestone payment on track to reach approximately NT$1.7 billion.
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