Shares of China Biologic Fluctuate After Skipping Full Year Guidance

The plasma-based biopharmaceutical producer's strong quarterly sales and net income failed to move the stock higher today.

Anthony Russo
    May 21, 2020 11:10 AM  PT
Shares of China Biologic Fluctuate After Skipping Full Year Guidance
author: Anthony Russo   

Shares of China Biologic Products Holdings Inc. (Nasdaq: CBPO) fluctuated after the company omitted to provide full-year 2020 guidance in its first-quarter financial report due to uncertainties over Covid-19.

The Beijing-based biopharmaceutical company said in a statement today it will provide an outlook for the full year when it has better "visibility". In the three months through March, China Biologics said sales hit $162.6 million, up 25% year-over-year. Net income soared 41% to $53.4 million, or $1.36 per share compared with $37.7 million, or 94 cents a share, in the same period of 2019.

Uncertainties resulted in the stock falling nearly 3% to $106.06 per American depositary share by midday. It also carried a trading high of $109.49 per share and a low of $105.61 per share. As of intraday, China Biologics shares are down 9% year-to-date.

"Looking ahead to the rest of 2020, given the limited volume of available plasma inventory and the oversold IVIG in the first quarter, we expect the overall growth rate of IVIG sales will slow down in the remaining quarters of 2020," Joseph Chow, the chairman, and chief executive officer of China Biologic, said.

He added, "We will make proactive adjustments to our operational strategies in the face of lower anticipated demand for most of our products, as well as lower-than-expected plasma collection volume and intensified competition."

A consortium group, which includes the private equity firm Beachhead Holdings Ltd. was in advanced discussions to take China Biologic's private, as reported by Bloomberg in early March. However, there has yet to be an announcement yet. In September 2019,  the same group made an offer of $120 per share for all the remaining stock it didn't already own. 

Operating for nearly 20 years, CBPO develops and commercializes human plasma-based biopharmaceutical products. It sells its products hospitals, distributors, and other healthcare facilities in China.

Investors will be eager to see how China Biologic will perform next quarter and whether or not the company will remain public. 

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