Hyphens Pharma to expand footprint in South-east Asia: CEO

SINGAPORE’S leading specialty pharmaceutical and consumer healthcare group, Hyphens Pharma International, is expanding its South-east Asia footprint beyond the five countries that it is already in, said its chairman and chief executive officer Lim See Wah.

He told The Business Times that Hyphens Pharma intends to set up offices in countries where it does not have any presence to capture the region’s demand growth, underpinned by its demography and economic development. 

“The immediate aspiration is how we can become an Asean pharmaceutical and consumer healthcare company. Today, we are already present in five of the 10 markets. Outside Asean, we will have to be a lot more cautious when it comes to building presence.” 

In 2001, Lim had bought the company, which was then a small setup founded by a Frenchman living in Singapore. Over the years, the NUS Pharmacy graduate grew it beyond domestic shores.

Apart from a direct presence in Singapore, Vietnam, Malaysia, Indonesia and the Philippines, it has a marketing and distribution network covering 10 other markets, spanning Bangladesh to South Korea. In 2021, Singapore accounted for 51 per cent of total revenue, while the remainder was generated overseas.

Hyphens Pharma sells specialty pharmaceutical products through exclusive distributorship, licensing and supply agreements with brands mainly from Europe and the United States. Its specialty products run the gamut from dermatology, paediatrics and allergy to orthopaedics, radiology, cardiology and others. 

Hyphens Pharma also develops and sells its own proprietary range of dermatological products such as flagship Ceradan (a dry skin product) and TDF (medical facial skincare) brands as well as health supplements under the Ocean Health brand and scalp care products under CG 210 brand.

Last December, it secured an agreement with Cassiopea SpA., a subsidiary of Cosmo Pharmaceuticals, for the exclusive rights to develop and sell Winlevi, an acne prescription medication approved by the US Food and Drug Administration, and all future product extensions for acne treatment in 10 countries across South-east Asia.

Lim said the drug will give the company an opportunity to enter markets where it doesn’t have any presence yet, citing Thailand as an example.

The company operates a wholesale pharmaceuticals and medical supplies hypermart through Pan-Malayan, a heritage brand with a history of more than 70 years in Singapore.

DocMed Technology is the largest business-to-business online pharma marketplace in Singapore. It is valued at S$60 million, after property and retail group Metro invested S$6 million for a 10 per cent stake last year.

It houses an online platform which allows registered customers to browse through products, as well as WellAway, Singapore’s first and only Health Sciences Authority-registered e-pharmacy where registered doctors can give e-prescriptions and have the medicine delivered to patients’ homes.

Lim said the intention is to leverage the very established wholesale business that the company has by “building digital capabilities that will help empower doctors, and becoming a facilitator as the entire healthcare digitalises, so can pharmaceuticals”.

For the third quarter ended Sep 30, 2022, Hyphens Pharma net profit jumped 270.8 per cent to S$4 million, exceeding expectations.

Revenue grew 47 per cent to S$42.8 million, propelled by growth across all business segments and contribution from the acquisition of Novem in December 2021. Revenue from specialty pharma principals jumped 77 per cent; proprietary brands 51 per cent; and its medical hypermart and digital segment 2.6 per cent. 

Lim, who has a 38.8 per cent deemed interest in Hyphens Pharma due to his 100 per cent ownership of Innomed, said while the post-Covid macro environment remains “worrisome”,  the overall growth trajectory of the company is intact as the life cycle of pharmaceutical products is very long and this makes the business “sustainable”.

He gave the example of the company’s range of dermocosmetic products marketed under the Ceradan brand, which grew from just a single product since its launch in 2011. 

He said: “Pharmaceutical is a longevity business. Almost all the products are seeing steady growth. Organic demand will take care of near-term growth. Newer products may experience accelerated growth rates in three to four years.”

In-licensed deals will fuel growth over the next five years, led by products such as Ustekinumab for the treatment of immune mediated disorders, Lederlon for osteoarthritis and Winlevi for acne treatment. 

Over the longer term, growth will be underpinned by continued business development, internationalisation of products and its digital healthcare. 

Hyphens Pharma continues to seek acquisition opportunities that are aligned with its goals to advance its position as a leading pharmaceutical and consumer healthcare company in Asia.

The fragmented pharmaceutical industry coughs out plenty of opportunities to buy businesses, brands as well as seek partnerships with brand principals to fuel growth – something Hyphens Pharma has done over the years from its acquisition of Ocean Health and TDF in 2016, to CG 210 in 2020.

Since the purchase of Novem, Hyphens Pharma’s cash balance has recovered and is now around S$28.4 million, which allows it to be nimble when seeking to grow its pipeline of products and expansion opportunities.

According to a new report from the IQVIA Institute for Human Data Science, total spending and global demand for medicines will increase over the next five years to around US$1.9 trillion by 2027, a compound annual growth rate of 3-6 per cent.

Parts of Asia are expected to grow strongly, as developed economies continue at a relatively steady pace.

Hyphens Pharma was listed on the Singapore Exchange’s Catalist board in 2018, after an initial public offer at 26 Singapore cents a share. The shares have been trading at around 33 cents and 34 cents since the start of the year.