Metronic Aims RM180 Million Profit From Covid-19 Vaccine

Metronic Global Bhd (MGB) through its subsidiary Metronic Medicare Sdn Bhd (MMSB), has inked a memorandum of agreement (MoA) with Medigen Vaccine Biologics Corporation (MVC), to distribute Covid-19 vaccine in Malaysia and potentially other countries.

MVC, an international pharmaceutical company listed on the Taiwan stock exchange, has developed the vaccine which has entered clinical development and is requesting MMSB to distribute the vaccine.

MVC is a biopharmaceutical manufacturer dedicated to preventing emerging infectious diseases with expertise in developing cell-based vaccines and biosimilar products.

The company develops flu vaccine, enterovirus vaccine, and other related products. MVC markets its products throughout worldwide.

MGB chief executive officer cum executive director Hoo Wai Keong said this MoA establishes the basis for negotiation between the parties with the view of entering into a distribution agreement pursuant to which MMSB will distribute the vaccine in Malaysia and to other countries.

MMSB will, at its own cost and expense obtain all product registrations in Malaysia in its name or MVC’s name which will be separately agreed in the distribution agreement.

MVC will support required clinical development by supplying the vaccine at a discounted price.

“In the forthcoming distribution agreement, MVC will supply MMSB with the vaccine in pre-filled syringes or multi-dose vials formulated for immediate vaccination into humans for distribution by MMSB in Malaysia and potentially other countries,” said Hoo in a statement.

MVC chief executive officer Charles Chen Chien Jen said MVC will be supplying an estimated three million doses of vaccine throughout 2021, contingent upon MMSB notifying MVC on or before December 31, 2020 of its commitment to purchase such number of doses.

“It is understood that there will be a minimum three month lead time between MVC’s receipt of each binding purchase order and delivery,” he said.

MVC agrees to sell the vaccine to MMSB during 2021 at US$50 per dose with the specific price to be negotiated.

At US$50 per dose, the estimated total order book is RM600 million for MGB with an estimated industry wide gross margin of 20 per cent to 30 per cent or estimated gross profit of RM120 million to RM180 million.

“To implement this MoA, the parties agree that within one month after the signing the agreement, MMSB shall deposit US$1.5 million with MVC and apply the refundable deposit to the purchase price of orders for the vaccine,” Hoo said.

“And within one month after the signing of the MoA, MVC will produce and provide MMSB with a draft distribution agreement whereupon the parties shall pursue negotiation to agree to the final terms and sign the agreement.

“The final distribution agreement will be signed within 3 months from the effective date,” Hoo said.

Source: New Straits Times