ferrets stock to watch: genepharm australasia ltd

Ferrets Stock to Watch: GENEPHARM AUSTRALASIA LTD
09:00, Wednesday, 13 September 2006

ADDING MORE PRODUCTS TO BOOST REVENUE IN THE CURRENT YEAR

Sydney - Wednesday - September 13: (RWE Aust Business News)
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OVERVIEW
********

Generic medicines company Genepharm Australasia Ltd (ASX:GAA) is
putting together a portfolio of marketable products which has already
created a growing revenue flow.

At the present rate the company should be in the black by the
end of the next financial year.

Yesterday Genepharm reported it had entered a heads of agreement
with Clinuvel Ltd (ASX:CUV) to buy the EpiPharm range of dermatology
products.

The five products will be added to Genepharm's range of
prescription and OTC dermatologicals to create sales growth with cost
synergies.

The $1 million acquisition is expected to be finalised by the
end of September.

Clinuvel's decision to divest the EpiPharm business was driven
by the desire of the company to concentrate exclusively on photo
protective drug CUV1647 and followed the recent success of phase II
trials for Polymorphous Light Eruption.

Genepharm's mission is to build a valuable business that will be
a leader in Australasia's expanding generic pharmaceutical markets
through the sale of a premium range of generic pharmaceuticals using
innovative marketing strategies that will create value for customers and
shareholders.

Genepharm's existing dermatology business has annualised gross
sales of more than $12 million.

The acquisition is expected to seamlessly integrate into
Genepharm's dermatology sales team and provide a growth platform for the
new products.

The new products would provide a boost to dermatology sales this
year.

"The acquisition is a strong strategic fit for Genepharm's
growing product range.

"The products will be principally marketed to dermatologists and
general practitioners and will give us a comprehensive range of acne,
psoriasis and eczema treatments," CEO Dennis Bastas said.

SHARE PRICE MOVEMENTS
*********************

Shares of Genepharm yesterday sold steady at 97.5c. Rolling high
for the year has been $1.54 and low 85.5c. The company has 139.1 million
shares on issue with a market cap of $135.7 million.

In the year to June Genepharm Australasia performed better than
budget and market expectations.

Key points include:

* Genepharm's first three products launched in April and
achieved $3.44 million in gross sales for the quarter to June.

* Net revenues of $2.2 million and EBITDA loss of $3.57 million
was better than market forecasts.

* The financial results do not include any sales or the
resultant profit from the newly acquired Douglas Pharmaceuticals
Australia business.

Douglas's accounts have been consolidated with Genepharm's
accounts from the settlement date of July 13.

* The Douglas acquisition adds 110 prescription medicine
products, 95 over-the-counter pharmacy products and 58 dermo-cosmetic
products.

* Strong cash position with $14.99 million at June 30.

"Genepharm has financially benefited from the Douglas Australia
business since April and the combined gross sales of the two businesses
for the quarter to June was in excess of $20 million," Mr Bastas said.

"This substantial sales performance is combined with positive
cash flow for the overall business. We are satisfied with the underlying
earnings strength and growth of the business.

"The April launch and sales of Genepharm's first three products
highlighted a strong demand from Australian pharmacy and the timely
acquisition of Douglas Australia's operations has created an effective
synergy for the business to achieve strong market penetration in this
financial year," said Mr Bastas.

BACKGROUND
**********

Genepharm is a specialist generic pharmaceutical company
committed to the development, marketing and distribution of a premium
range of generic pharmaceuticals.

This includes some of the newest and highest value
pharmaceuticals in the Australian Pharmaceutical Benefits Scheme (PBS),
for which patents are due to expire during the next 1-3 years.

Genepharm was incorporated in 2003 and was listed on the
Australian Stock Exchange in June 2004.

The company was specifically established to enter into an
exclusive distribution arrangement with the Genepharm Group, in order to
bring to the Australian and New Zealand pharmaceutical markets the
extensive range of products currently manufactured and distributed by
Genepharm SA in Europe, and the future product pipeline of major generic
prescription pharmaceuticals under development.

Genepharm has focused on bringing to the Australian and New
Zealand pharmaceutical markets a portfolio of products that takes
advantage of the robust market opportunity that is open to generic
pharmaceutical suppliers in coming years.

The generic pharmaceutical market in Australia is forecast to
increase in value to around $2 billion per annum by 2008, primarily due
to three key factors:

* Expiration of the patents of many of the top 100 originator
PBS products, allowing for the registration of generic substitutes and
accordingly increasing the generic pharmaceuticals share of the
prescription market. Patents on products with pharmacy sales of over
$500 million (according to PBS figures) have expired between 2002 and
2005.

* Increased Government support for generic pharmaceuticals as
substitutes including via proposed legislative changes and community
awareness campaigns.

* An ageing population whose use of prescription medicines will
substantially increase and as a result increase the demand for
competitive generic pharmaceuticals.

The timing of Genepharm's market entry has been targeted around
the above factors and the opportunities provided by the prevailing
pharmaceutical market for an organisation with access to a leading range
of quality generic pharmaceutical products.

ENDS