KUALA LUMPUR (March 16): Pharmaniaga Bhd (KL:PHARMA) will be lifted from the Practice Note 17 (PN17) category effective Tuesday (March 17), ending its three-year stint as a financially distressed company.

The upliftment follows Bursa Malaysia Securities' approval of the group's application for removal from the category, according to Pharmaniaga's bourse filing on Monday.

Pharmaniaga first slipped into PN17 status after triggering the criteria when it recognised a massive RM552.3 million inventory provision for Sinovac Covid-19 vaccines. The impairment resulted in a record quarterly net loss of RM664.39 million for its fourth financial quarter ended Dec 31, 2022, (4QFY2022) and a full-year net loss of RM607.32 million.

The group's exit from the distressed category follows the successful completion of its regularisation plan, which involved a rights issue, a private placement and a capital reduction exercise.

In July last year, Pharmaniaga raised RM596.6 million through a renounceable rights issue and a private placement. The exercise involved the issuance of 5.12 billion new shares — comprising 3.46 billion rights shares and 1.66 billion placement shares — making it the largest fundraising exercise ever recorded in Malaysia’s healthcare sector.

Subsequently, the group completed a RM520 million capital reduction exercise in August 2025 to wipe out accumulated losses.

Its path to regularisation took nearly two years after the plan kicked off in November 2023. The plan underwent a few adjustments, including the exclusion of warrants from the rights issue and an increase in the capital reduction from an initial RM180 million to the final RM520 million.

As of Dec 31, 2025, Parmaniaga's balance sheet showed RM110.59 million in cash and cash equivalents, against RM690.43 million in short-term and RM125.53 million in long-term borrowings.

For the financial year ended Dec 31, 2025 (FY2025), the group reported a 63% drop in net profit to RM48.5 million from RM131.82 million in FY2024 — despite a 4.5% increase in revenue to RM3.93 billion from RM3.76 billion — mainly because the FY2024 results had been significantly boosted by a RM124.9 million penalty waiver.

On Monday, shares in Pharmaniaga ended one sen or 4.08% higher at 25.5 sen, valuing the group at RM1.67 billion. The stock has climbed 11 sen or 82.14% in the past one year.