• Resolution to credit 371,945,333 new ordinary shares as fully paid-up on the basis of four bonus shares for every three existing CCM Duopharma shares.
• Approval of a dividend reinvestment plan (DRP) which provide the shareholders with an option to reinvest their cash dividend in the Group’s shares.
• Acquisition of approximately 8.39 per cent equity interest or 806,450 common shares in PanGen Biotech Inc. (PanGen) from CCM Berhad for a total purchase consideration of RM59.16 million
SHAH ALAM MAY 31, 2018 – Shareholders of CCM Duopharma Biotech Berhad (CCM Duopharma) at its Extraordinary General Meeting (EGM) today approved the resolution to credit 371,945,333 new ordinary shares as fully paid-up on the basis of four bonus shares for every three existing CCM Duopharma shares and also a dividend reinvestment plan (DRP) which provide the shareholders with an option to reinvest their cash dividend in the Group’s shares.
CCM Duopharma detailed the proposal through an earlier announcement made to Bursa on February 27, 2018, as part of the finalisation of its recent demerger exercise which was completed on December 28, 2017. The Bonus issue shall be wholly capitalised from the share premium account of the Group at an amount of RM0.50 per Bonus Share.
Speaking at the media briefing held after the EGM, CCM Duopharma’s Group Managing Director, Leonard Ariff Abdul Shatar, said that the bonus issue will reward the shareholders of CCM Duopharma for their continuous support by enabling them to have greater equity participation and at the same time, maintaining their equity interest percentage.
“This exercise will also enhance CCM Duopharma’s capital base as the proposed bonus issue will increase the issued share capital of the Group to a level which is more reflective of its current scale of operations and assets employed.
“The proposed DRP, meanwhile, will potentially improve the liquidity of CCM Duopharma’s shares currently listed on the main Market of Bursa Securities through the issuance of DRP Shares pursuant to the proposed DRB resulting in an enlarged share capital base in CCM Duopharma,” said Leonard.
The proposed bonus issue and first DRP, expected to be implemented by the second quarter of 2018 and completed by the third quarter of 2018 respectively, are not expected to have any material effect on the earnings of the Group’s financial year ended December 31, 2018.
The right to participate in the Dividend Reinvestment Plan (DRP) is granted to all shareholders including directors, substantial shareholders and other interested persons of the Group who hold CCM Duopharma’s shares, providing there are no restrictions for such participation as prescribed in CCM Duopharma’s Constitution.
The percentage shareholding of shareholders will be diluted if they decide not to exercise their reinvestment option. The shareholders will receive Bonus Shares in cash if they wish not to reinvest the whole or part of the dividend into the new shares of CCM Duopharma.
The other important resolution approved during the EGM was the acquisition of approximately 8.39 per cent equity interest or 806,450 common shares in PanGen Biotech Inc. (PanGen) from CCM Berhad for a total purchase consideration of RM59.16 million which will be satisfied entirely in cash.
The acquisition is part of the Group’s recent demerger exercise to streamline the business of the CCMB Group and the CCM Duopharma Group with the former focussing on the polymer and chemical businesses while the CCM Duopharma Group would focus on the pharmaceutical business.
The Proposed Acquisition together with the Deeds of Novation would transfer approximately 8.39% equity interest in PanGen, the remaining pharmaceutical business within the CCMB Group to CCM Duopharma. PanGen, incorporated on January 29, 2010 in Korea was listed on March 11, 2016 on the KOSDAQ, a trading board of the KRX in Korea under the category of New Growth Engine Companies.
The company is involved in the development of biosimilar products, development of producer cell line (which is used to produce the proteins necessary for the manufacturing of biosimilar products) using PanGen’s patented technology, design and develop small scale manufacturing process, manufacturing of materials used for pre-clinical and clinical trials, development of research cell lines (which is used to produce the proteins necessary on a small scale basis for research purpose), and manufacturing of protein reagents and assay kits/system.
With a factory located at Suwon, Geonggi-do, Korea with a built-up area of 4,406.85 square metres, PanGen provides services to customers in Korea, Malaysia, Japan, Middle East, Turkey, People’s Republic of China, Mexico, India and Venezuela.
“The acquisition to be undertaken together with the Deeds of Novation will give CCM Duopharma the legal rights to market biosimilar products, a biologic medical product approved by authorities which is an identical copy of an original product that is manufactured by a different corporation, developed by PanGen in Malaysia, Brunei and Singapore with the first right of refusal to extend it to other ASEAN countries.
“This will give CCM Duopharma, a perpetual royalty-free license and right to package, fill and finish, store, promote, market, commercialise, sell, import, export and distribute PanGen’s products in other ASEAN countries,” added Leonard.
The Purchase Consideration of RM73.35 (equivalent to KRW20,269) per PanGen Share was arrived at on a willing-buyer, willing-seller basis which will be settled entirely in cash upon the completion of the share subscription agreement.
“With the investment in PanGen, CCM Duopharma can potentially work together with the company to enter into the biotherapeutics medicines (medicines made from living organisms or modification of proteins to create therapies) market with a lower cost of entry by utilising the current products and technology of PanGen as compared to developing the products and technology internally.
“CCM Duopharma would also be able to benefit from the transfer of technology and know how by PanGen relating to bio-business undertaken or to be undertaken by CCM Duopharma.
“In fact, we had sent a working team to PanGen’s facilities to be trained on conduct and management of clinical trials for the EPO biosimilar, and on good manufacturing practice requirements for clinical trial. Additionally, our employees also received extensive training from PanGen on the transfer its technology on the manufacturing process of EPO
biosimilars to CCM Duopharma,” he added.
Earlier, CCM Duopharma reported a double-digit growth in its financial results with revenue rising 10.14 per cent for first Quarter ended March 31, 2018 to RM133.26 million from RM120.99 million in the corresponding period last year.
Profit after tax (PAT) jumped 23.54 per cent during the same period to RM10.65 million from RM8.62 million in the corresponding period last year.
The Group’s current Quarter results (31 March, 2018) has also improved as compared to the Revenue and PAT of RM107.59 million and RM10.05 million respectively achieved during the preceding financial quarter (Dec 31, 2017), representing an increase of 23.86 per cent and 5.95 per cent respectively.
CCM Duopharma is expected to achieve satisfactory results for FY 2018 in line with the forecasted 5% growth of the nation’s GDP, as well as new products launches into the market. The Group held its Annual General Meeting on the same day prior to the Extraordinary General Meeting at Shah Alam.