KUALA LUMPUR (March 31): Duopharma Biotech Bhd (KL:DPHARMA) could soon secure a new contract to supply human insulin formulations to the government, according to TA Securities.
The company could get a three-year contract when the interim three-month extension expires on May 15, the research house said in a note. The deal could be awarded under a dual-supplier arrangement between Duopharma and Pharmaniaga Bhd (KL:PHARMA), the research house added.
“We expect the group to secure a new three-year contract in the near term,” TA Securities said.
Under the previous contract, about 80% of the government’s human insulin supply was sourced from Biocon via Duopharma, while the remaining 20% came from Novo Nordisk, which has exited the human insulin market.
The Ministry of Health’s policy requires at least two suppliers for procurement of off-patent drugs and medical devices. The ministry is also offering three-year contracts to local companies to encourage production of critical off-patent drugs.
The policy followed disruption in the supply of human insulin in August 2024 over production issues at a local manufacturing plant as well as interruption at Novo Nordisk.
Human insulin is expected to contribute around 9%-11% of Duopharma’s revenue in 2026 compared to about 12% in 2025, according to TA Securities’ estimates.
Overall, the research house is forecasting a net profit of RM101.4 million for this year, underpinned by peak demand from the government sector now in the final year of the current approved products purchase list (APPL) contract valued at RM684.2 million.
The Ministry of Health regulates the procurement of hundreds of pharmaceutical products and medical supplies for government hospitals and clinics through the APPL.
TA Securities has reiterated its ‘buy’ call on Duopharma with an unchanged target price of RM1.72, implying a 37.3% upside from the last traded price of RM1.25. The consensus is also unanimously bullish, as all six research houses covering Duopharma’s stock have ‘buy’ recommendations, according to Bloomberg. The average 12-month target price is RM1.74.