Insulin contract a shot in the arm for Dupoharma Biotech

KUCHING (Feb 19): Analysts are positive on Duopharma Biotech Bhd (Duopharma Biotech) after winning two non-Approved Product Purchase List (APPL) contracts totalling RM118 million from the Ministry of Health (MOH).

The first contract is to supply recombinant human insulin (RHI) formulations by Duopahrma and Biocon Sdn Bhd to MOH worth RM65.1 million until May 15, 2026; while the second is to supply insulin injection by Duopharma worth RM52.5 million until February 5, 2028.

Researchers with Kenanga Investment Bank Bhd (Kenanga Research) are positive on these wins, as the supply of insulin medicine as a package between government that was last extended to 28 October 2025 had expired.

“The latest contract wins bring unbilled order book to RM338 million, based on our-back-of envelope calculation, unbilled APPL contracts from the government as at end 3QFY26 are estimated at RM220 million,” it said.

“These latest contracts win is within market expectations, as the tender process had been ongoing. We have factored these contract wins into our forecasts.”

Since it is fill-and-finish insulin, Kenanga Research expect the margin to be thin. For illustration purposes, assuming a net margin of three per cent, these latest contract wins accounts for three per cent of the research house’s FY26 net profit forecast.

“In addition, the group plans to undertake fill-and-finish activities for human insulin on behalf of Biocon for the Malaysian market.

“The facility, located on the fourth floor of the K2 plant, is expected to take approximately three years to complete and would enhance supply security for the Malaysian market.

“Its K2 plant has recently been approved by the authority to build a facility in the 4th floor catering to the fill-and-finish insulin products.”

Generally, APPL is awarded on a 3-year basis and typically the last year of the contract will see a spike in demand or volumes usually peak.

It expects the APPL governmentís contract renewal cycle contract bidding will start in th second half of 2026.

Looking forward, the team at TA Securities Bhd believe that the 3-year contract worth over RM400 million remains intact and is likely to be awarded once a second supplier is ready, in line with the MOHís policy that requires a minimum of two suppliers.

“The key surprise was the RM52.5 million contract for the supply of insulin injections through February 5, 2028, as this represents a new award.

“Overall, we view the developments positively, as they provide earnings visibility and support the groupís outlook.”

This sentiment was echoed by RHB Investment Bank Bhd, adding that Duopharma Biotech’s near-term profitability will likely benefit from active pharmaceutical ingredient (API) price normalisation and a weaker US dollar.