Square Pharma discloses another outsourcing deal, dragging stock up

Square Pharmaceuticals finalised another outsourcing contract with local drug maker Euro Pharma to meet the growing demand for its products.

This is the second such deal to be made by the flagship company of Square Group in less than a month.

On July 12, the country's leading drug maker signed an agreement with Aristopharma.

Following the latest news, the stock took off from the floor once again on Tuesday after a single-day break, rising 0.48 per cent to Tk 211.

Some 0.23 million shares of Square Pharma worth Tk 49.66 million changed hands, making it the 17th most-traded stock on the Dhaka Stock Exchange for the day.

Square Pharmaceuticals took off from the floor on July 13 after eight months following the news on the business deal with Aristopharma.

It then returned to the floor on Monday. The new deal with Euro Pharma again encouraged investors to bet on the stock.

Square Pharma is considered one of the best performing blue-chip stocks, with an excellent reputation. But the stock had been stuck at the floor price since November 30 last year. The board has decided to build a partnership with another local drug maker to manufacture products according to the demand, said company secretary Khandaker Habibuzzaman.

Non-listed Euro Pharma, which began its journey in 2003, has a state-of-the-art manufacturing plant at Shyampur Industrial Area in Dhaka division.

Square Pharma began contract manufacturing before the pandemic. It already partnered with five factories to allow their facilities to produce Square products.

Earlier in 2020, it signed agreements with Renata Oncology and Apex Pharma for manufacturing some of its products.

Right now, Square Pharma is getting support of contract manufacturers for around 30 products. Some 40 other items will be added to the list.

Meanwhile, Square Pharma's annual profit surged 14 per cent to Tk 18.18 billion in FY22, thanks to the launching of new drugs as well as strong marketing strategies.

On the financial strength, Square Pharma disbursed 100 per cent cash dividend for FY22, the highest in 15 years.

In the nine months through March this year, it showed 5.50 per cent year-on-year growth in profit to Tk 13.45 billion.

The profit growth boosted the pharma company's earnings per share to Tk 16.82, from Tk 16.03 in the same period a year ago.

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