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Taihua

  • BY: Andrew Hore |
  • POSTED: 18/02/2009 |

Taihua says that its 2008 sales and profits will be significantly below expectations.

The Chinese natural pharmaceutical ingredients supplier says that volumes and prices of its two main products Paclitaxel and Homoharringtonine “decreased substantially”.

The problem is exacerbated by currency movements and that is why the figures in Renminbi (RMB) are worse than expected.

The shares took this badly falling by one-third to 5.5p each, which values Taihua at £4.49m.

The suspension of Taihua’s production traditional Chinese medicines production by the Chinese authorities during the year was another negative factor. Production recommenced in August 2008 but the damage had been done.

Paclitaxel is an anti-cancer ingredient made from yew trees. Its sales volumes were 16% lower in 2008, while leukaemia treatment ingredient Homoharringtonine saw volumes fall 28%. In RMB terms the Paclitaxel price fell by more than one-quarter, while the Homoharringtonine price declined by a similar proportion.

Paclitaxel was hit by the introduction of synthetic versions. There is no new information on the European application for a certificate of suitability for Paclitaxel.

Full year figures will be published in June 2009. An interim profit of RMB14.6m was reported in September. That was a 19% decrease on the first half profit in 2007.

Trading volumes have been low in 2009 but they always are at this time of year. Taihua says that it still has a strong cash position. There was RMB82.3m in the bank at the end of June 2008 but this figure is likely to be lower now.

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