LONDON (Alliance News) - Taihua PLC Thursday said its total sales rose to CNY53.1 million from CNY2.3 million in 2013, as the wholesale price of forsythia compensated for a reduced harvest.
Taihua is a China based pharmaceutical company specialising in traditional Chinese medicine and some active pharmaceutical ingredients.
The company saw a total harvest of 1,145 tonnes of forsythia, down from 1,528.6 tonnes in the previous year, due to adverse weather conditions. The company said other suppliers saw a similar shortfall which helped increase wholesale prices.
The average selling price rose to CNY37.77 per kilogram from CNY28.31 per kilogram excluding sales tax. The entire harvest was sold.
Taihua said it was still seeking to extend the distribution of Chinese traditional medicine Bian Tong Pian. At the time of its interim results, the company said it had been unable to extend distribution of Bian Tong Pian due to the impact of the GlaxoSmithKline PLC bribery allegations in China.
"The problems surrounding GlaxoSmithKline in China and associated investigations into the distribution of pharmaceuticals by the Chinese government has left distributors reluctant to take on new products. For the time being, given the government focus on this industry, they prefer to adopt a very conservative approach and only distribute their existing products," it said at the time.
The company said Thursday that the profitability of its active pharmaceutical ingredient paclitaxel has been reduced, and in 2014 it was loss-making at a gross margin levels as by-products had not been successfully sold. As a result, it will cease production of paclitaxel for an initial six months with immediate effect.
After this time, it will assess what the withdrawal from production has done to the Chinese wholesale price, and then make a further decision on the future of the product.
Sales of ingredient homoharringtonine continued at the low level it has seen in recent years, it said. However, Taihua will continue to produce the ingredient as historically the product has been important due to its volume and margin, and it expects a return to earlier market conditions.
Taihua said it was working with agronomists to look for ways to enhance the harvest from its plantations.
Shares in Taihua are trading up 6.7% at 4.00 pence Thursday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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