Bora Pharmaceuticals Exits Integration Phase with Sequentially-Improved Gross and Operating Margins
- Written by Media Outreach
Positioned to Unlock M&A Value through U.S. Manufacturing Amidst Geopolitical Complexities and Specialty Portfolio
HONG KONG SAR - Media OutReach Newswire - 14 May 2025 - Bora Pharmaceuticals (TWSE: 6472) today announced its financial results and operational highlights for first quarter of 2025.Quarterly Business and Financial Highlights
- Fueled by expanded capacity and new dosage forms, Bora's CDMO business delivered a record high quarter, up 52.4% YoY and 3.0% QoQ.
- As part of Bora's long-term strategic growth plan, the Company is moving forward with a phased investment of tens of thousands US dollars to unlock the untapped potential of Maple Grove facility. This build-out is designed to enhance capabilities in oral solid dose and sterile manufacturing, strengthening the ability to support customer demand and scale future programs.
- Pharma Sales revenues rose 82.0% YoY based on reported unaudited monthly sales, driven by strong performance from the vigabatrin franchise, which includes three dosage forms. Notably, VIGAFYDE captured over 70% share in the new patient segment.
- Due to the completion of Plymouth area decommissioning, consolidated revenues for 1Q25 was NT$4.48 billion, a NT$350 million reversal from the unaudited monthly disclosures, all of which was attributed to the pharma sales segment.
- Despite margin pressure from partial maintenance shutdowns at the Maryland sterile injectable site in early January and softening demand for generic product dexlansoprazole (DLS), product mix improvement from growing specialty portfolio lifted gross margin from the low of 4Q24 to 42.2% in 1Q25. Tech transfer for 6 Upsher-Smith generic products to cost-competitive sites within Bora network remains on track, with full transfer expected by year-end to support further margin recovery.
- EPS from continuing operations reached NT$26.54, reflecting NT$2.44 billion of net non-operating income from the divestment of Bora Biologics and recognition of losses of Tanvex Biopharm. However, the decommissioning of the Plymouth area negatively impacted EPS by NT$12.99, resulting in a reported EPS of NT$13.55. Share capital increased 0.4% during the quarter from employee stock option exercises and convertible bond conversions.
- DLS competitors began exiting the market in early 2Q25 due to supply chain hiccups, creating new opportunities for Bora to increase share and drive recovery momentum.
- The Group remains optimistic that its first quarter restructuring efforts will increase the long-term value of its recent acquisitions, including unlocking NT$600 million in capital in 2025. CDMO business growth will be further accelerated with strategic U.S.-based capability and capacity.
Mr. Bobby Sheng, Chairman of Bora Group, stated, "The first quarter is the continuation of critical integration and restructuring phase following multiple business and capacity acquisitions in 2024, laying a solid foundation for operational efficiency expansion. Following substantial investments in the U.S last year, we did observe significant pressure in the U.S. generics space during Q4. This prompted us to swiftly accelerate our integration efforts. At the same time, evolving client dynamics and market demand have only strengthened our conviction in the long-term value and strategic role of these assets. While the organizational streamlining, business separation, and product portfolio optimization undertaken to reflect operational realities have created near-term hurdles, we remain confident that these actions are essential to achieving optimal resource allocation and hence satisfactory return on assets. These efforts are necessary steps in the Company's path toward sustainable mid to long-term growth. The closure of Plymouth area was completed ahead of schedule during the quarter and the area has thus been reclassified as discontinued operation in our quarterly financial statements altogether. From an operational standpoint, Bora has discontinued 15 products in the U.S. generics market along with the restructure, with an additional 6 products transferred to more cost-efficient manufacturing sites within the Group. On the financial side, discontinued operation resulted in a negative impact of approximately NT$1.34 billion, including overhead, inventory and equipment write-downs as well as severance-related expenses. Looking ahead, Bora will advance its focus on high-value and complex dosage forms supported by over NT$5.0 billion cash on hand. At Maple Grove, 4 global pharmaceutical clients are currently in advanced discussions regarding CAPEX investments which we view as a strong validation of the site's value and strategic fit. While the timeline for full deployment spans several years, we are approaching this expansion with operational discipline and commercial alignment to ensure its success over time. On pharma sales side, Bora weathered softness in DLS demand in the first quarter...