TaiMed Biologics Inc (中裕新藥) remained in the red last quarter, despite strong sales of its new drug Trogarzo, due to the continued high cost of research and development (R&D).
The company yesterday reported a net loss of NT$323.02 million (US$10.62 million) in the third quarter, down 9.2 percent year-on-year, or losses per share of NT$1.28.
Even though revenue grew 189 percent annually to NT$211 million thanks to robust sales of the HIV treatment drug Trogarzo in the US, the NT$271.96 million expense of developing a processing system for new contract manufacturing partner Samsung BioLogics Co has dented the company’s profitability.
The South Korean-based Samsung BioLogics is expected to begin production of Trogarzo at a new plant by next year at the earliest, TaiMed chief financial officer Jack Chen (陳怡成) said.
The new system and larger equipment are needed, as the new partner’s scale of production is to be seven times greater than TaiMed’s current manufacturing partner, WuXi Biologics Co (無錫生物製藥), Chen said.
The higher R&D expense is necessary and would benefit TaiMed in the long run, it said.
“Without the investment, we might have gotten out of the red by now, but it would be for nothing as TaiMed, a company focusing on new drugs, must keep devoting resources to R&D,” chief technology officer Jimmy Chang (張金明) said.
TaiMed holds a stake in the Montreal-based Theratechnologies Inc, its exclusive marketing and distributing partner in more than 30 markets, but was forced to report a nonoperating loss of NT$74 million last quarter after the partner’s share price dropped.
Overall, net losses for the first nine months of the year increased 194 percent from a year earlier to NT$495 million, or losses per share of NT$1.97.
Even though TaiMed has not turned a profit, the rise in revenue has enabled the firm to continue developing other new drugs such as TMB-365, TMB-Bispecific and VRC07-523LS, which are used to treat HIV and prevent infections, and are still in phase I clinical trials, Chang said.
Unlike Trogarzo, which is a fourth-line treatment and an alternative for patients with multi-drug resistance, the three new drugs would be used as second-line treatments, meaning that more patients could take them at an earlier stage, he said.
TaiMed expects the phase III clinical trials for the intravenous infusion formulation of TMB-355, a key ingredient in Trogarzo, to be completed in the first quarter of next year, Chang said, adding that the firm continues to work toward its goal of gaining marketing approval for the product by next year.
Gross margin recovered from 17 percent in the first half of this year to 47 percent last quarter as production yield at WuXi Biologics has improved, Chen said, adding that gross margin is expected to remain between 40 and 50 percent this quarter.