Tianyin Pharma Expects Revenues to Climb on Inclusion in 'Essential Drug List'

Tianyin Pharmaceutical (TPI) announced that it currently produces four generic products that are included in China's recently released Essential Drug List (EDL). They are: Azithromycin Dispersible Tablets, Simvastatin Tablets, Hugan Tablets and Xiao Yan Li Dan Capsules and Tablets. Tianyin thinks the EDL may cause revenues of the products to double in 2010 to $12 million.

Because all drugs on the Essential list are included in the basic health insurance catalog, they are given a higher reimbursement percentage. Pricing of products on the Essential Drug list is determined through public tenders carried out on a province by province basis. The products selected through this process may enjoy higher revenues, though margins will be affected by government price controls.

The Essential Drug list includes a total of 307 first-line drugs, 200 of which are western-derived medications while the others are TCMs. All members of the list will be heavily supported by the government. Use of this first Essential Drug List is limited to basic levels of the healthcare delivery system – city community service centers, health clinics in towns and townships, and health clinics in villages. It will go into effect on September 21. A separate list for more sophisticated health institutions will be announced in the future. All health care institutions will have an essential drug list by 2011.

Disclosure: none.

Comments

[User 41022:]

This is a real sleeper with great growth at less than 10 PE. Technically once thru 4.30 should see $6 quickly.

Sep 13 01:24 AM

[Alphameister:]

Fourth-quarter revenue growth should be very strong, which could be the catalyst for higher prices. Doesn't seem that attendees at the Rodman & Renshaw conference were favorably impressed given the stock's weakness Friday on high volume. Anyone in position to comment on that presentation? Even after Friday's pullback, TPI looks great fundamentally and technically.

Sep 13 11:47 AM