Export boost for Duopharma

MALAYSIA’S pharmaceutical industry relies heavily on the public sector, which buys around 70% of generic drugs in the market.

Duopharma Biotech Bhd reflects this trend, with half of its products supplied to the public sector, 42% to the private sector, and the remaining 8% exported.

To reduce its dependence on government contracts, Duopharma’s group managing director Leonard Ariff Abdul Shatar is steering the company towards greater participation in the private healthcare segment and expanding its export footprint – particularly within Asean.

While exports present a growth opportunity, they also come with significant hurdles. Malaysian pharmaceutical companies often struggle to meet the stringent standards of regulatory bodies such as the US Food and Drug Administration (FDA) and the European Union’s Good Manufacturing Practice (EU GMP) guidelines.

Meeting these standards requires substantial investments to improve facilities and processes, which can strain financial resources and reduce profit margins.

Nonetheless, Duopharma is making steady progress without heavy capital outlays.

In fact, it recently achieved a significant milestone.

Leonard Ariff tells StarBiz 7 that its Highly Potent Active Pharmaceutical Ingredients (HAPI) facility in Glenmarie, Shah Alam, is now certified to meet EU GMP standards.

This was following an audit by the Health Products Regulatory Authority in Ireland.

“This certification is a testament to our dedication to quality and opens doors to more global markets.

“We are continuously looking to enhance our facilities and processes to ensure we comply with regulatory bodies like the US FDA and EU GMP,” he says.

New markets

While the EU GMP certification enables expansion into highly regulated Western markets, Duopharma is concurrently doubling down on regional growth, particularly within Asean.

Currently exporting to around 30 countries, the company sees increasing demand for its generics, biosimilars and consumer healthcare products.

Thailand is on the radar, but Duopharma’s immediate focus is Indonesia, a market poised for pharmaceutical growth due to new regulatory developments.

Leonard Ariff says Indonesia is preparing to enforce mandatory halal certification for over-the-counter (OTC) pharmaceuticals by 2026 or 2027, creating an opening that Duopharma is well-positioned to fill.

“We are also penetrating the Timor Leste market through direct government tenders, and Qatar remains a work in progress,” he adds.

Despite its regional ambitions, Duopharma continues to grow domestically.

The company, in which Yayasan Pelaburan Bumiputra holds a 44.11% stake, has secured RM684.15mil worth of contracts from the government.

These contracts cover the supply of 100 pharmaceutical and non-pharmaceutical products to public healthcare facilities until Dec 31, 2026, under the Health Ministry’s (MoH) Approved Products Purchase List (APPL).

Additionally, Duopharma is eyeing a major contract from MoH for insulin supply – an area that contributed significantly to its robust first-quarter (1Q25) performance in financial year 2025. The company posted a 68% year-on-year increase in net profit to RM25.6mil, driven by a 36% jump in revenue, thanks to higher sales under APPL and increased insulin deliveries.

Kenanga Research believes Duopharma’s better performance was driven by aggressive tender participation, supported by expanded production capacity, and underpinned by the government’s contract renewal cycle of the APPL.

“Duopharma is poised to benefit from a full year of contribution in 2025 from the APPL contracts vis-à-vis nine-month contribution in 2024, further boosting revenue and tilting the sales mix higher toward public sector sales,” the research house says.

It supplies pharmaceutical products and OTC supplements to the public sector via government tenders or via MoH’s APPL, direct tenders and local purchase orders.

TA Securities Research expects Duopharma’s performance in 2Q25 to remain strong, supported by resilient demand and lower Active Pharmaceutical Ingredient (API) prices. In 1Q25, its pre-tax profit margin expanded by 2.4 points to 12.8%, supported by lower API prices.

Reducing dependence on imported APIs

Malaysia’s heavy reliance on imported APIs – especially for branded and high-end drugs – has long made the country susceptible to global supply chain shocks and currency volatility.

Duopharma is actively working to mitigate this vulnerability.

A key part of this strategy is the continued investment in its HAPI facility, which will allow local production of certain complex molecules, particularly for oncology drugs.

Additionally, the company is diversifying its supplier base to reduce concentration risks.

While API prices have fallen to pre-Covid levels, offering some margin relief, Duopharma anticipates a time lag before fully realising the benefits due to its inventory holding practices, which range from three to six months.

The ringgit’s recent appreciation against the US dollar is also a favourable factor. With roughly 70% of Duopharma’s raw material costs denominated in US dollar, the currency movement has had a meaningful impact on margins.

“Our robust performance in 1Q25, with increased revenue and profit after tax, was also supported by the lagging effect of the strengthening ringgit and declining API prices.

“We are optimistic that these favourable cost dynamics, coupled with strong demand from both the public and private sectors and our expanding product portfolio, will contribute to a potentially record-breaking financial year,” Leonard Ariff says.

Duopharma serves as a leading example of how Malaysian pharmaceutical companies can align with global standards while seizing regional opportunities.

By investing in quality, diversifying its offerings, and addressing market-specific needs such as halal certification, Duopharma is paving the way for a more resilient and globally competitive pharmaceutical sector in Malaysia.