Genepharm Australasia. (GAA:ASX) 2006-01-05
This is another company that we have traded before for our clients. On that occasion we almost tripled our money in less than a year.
All our original reasons for liking this stock are still relevant and the stock price has been depressed lately. We will use this down turn to buy shares in Genepharm Australasia again.
Below is part of the original report on the company that we produced in July 2004. We bought the shares then at AU$0.52 and sold out at AU$1.39 in January 2005.
The shares are back below AU$1.00 now and we would expect them to get back to at least their previous high of AU$1.56 within the next year.
Buy Genepharm Australasia (GAA:ASX) up to AU$1.00.
Genepharm is the only dedicated generic pharmaceutical company listed in Australia. The company was an IPO in June 2004 , when it listed on the ASX.
This small cap stock has the potential to return big profits to early investors.
Genepharm is a specialist generic pharmaceutical company committed to the development, marketing and distribution of a premium range of generic pharmaceuticals. This includes some of the newest and highest value pharmaceuticals in the Australian Pharmaceutical Benefits Scheme (PBS), for which patents are due to expire over the next 1 -3 years.
Genepharm was incorporated in 2003 to specifically enter into an exclusive distribution arrangement with the Genepharm Group, in order to bring to the Australian and New Zealand pharmaceutical markets the extensive range of products currently manufactured and distributed by Genepharm SA in Europe, and the future product pipeline of major generic prescription pharmaceuticals under development. The pipeline of files and drugs from Genepharm SA in Europe positions Genepharm Australasia with key competitive strengths:
Genepharm Australasia does not have to negotiate individual license arrangements for drug registrations and does not have to pay royalties to products sourced from Genepharm SA. The Company will have lower TGA registration costs due to technical and regulatory assistance from Genepharm SA and will enjoy highly favourable payment terms for manufactured products imported from Genepharm SA.
The mission of the Company is to build a valuable business that will be a leader in Australasia’s expanding generic pharmaceutical market through the sale of a premium range of generic pharmaceuticals using innovative marketing strategies that will create value for its customers and shareholders.
Genepharm is focused on bringing to the Australian and New Zealand pharmaceutical markets a portfolio of products that takes advantage of the robust market opportunity that is open to generic pharmaceutical suppliers in coming years.
Generic pharmaceuticals in Australia are expected to increase almost threefold to an estimated $2billion in dispensed value by 2008.
Genepharm will target Australia and New Zealand via pharmaceuticals with high Australian Pharmaceutical Benefits Scheme (PBS) contributions and with patents expiring during the next 1-3 years. Genepharm expects to grow through the introduction of new generic pharmaceuticals, possible expansion into Asia and licensing new therapeutic products to complement its product portfolio.
Acquisition opportunities of related businesses to introduce new products or new markets for Genepharm pharmaceuticals will also be targeted.
The company’s short-term strategy is to complete registration and market approval of its first range of pharmaceutical products with the Therapeutic Goods Administration (TGA).
Genepharm will initially register 40-50 products in the first 36 months of listing that will include 36 of the top 100 pharmaceuticals subsidised by the PBS. Following this Genepharm will expand its product portfolio by a further 40 to 50 new products over the next 5 years. Products will be sourced from
European Genepharm SA. Drugs expected to be marketed are Simvastatin cholesterol lowering medicine, Sertraline and Citalopram antidepressant drugs, Felodipine a cardiovascular medicine and
Carboplatin a specialist anti cancer drug for lung cancer. Markets to be targeted are all retail pharmacies and hospitals. Genepharm products will be purchased through wholesalers Australian Pharmaceutical Industries, Mayne Group and Sigma Pharmaceuticals.
Buy Genepharm Australasia (GAA:ASX) up to AU$1.00 and hold for the next 3 years.