25th Jan 2019 11:44
LONDON (Alliance News) - Cathay International Holdings Ltd said Friday its 50%-owned subsidiary, Lansen Pharmaceutical Holdings Ltd, expects a "noticeable" decrease in profit in 2018.
The healthcare investor focused on China said Lansen's results will have an adverse impact on its own results.
Cathay International expects "underlying challenging economic conditions", regulatory changes and "tough competition" to continue and to have an adverse impact in the short term.
The China healthcare investor said Lansen's profit decline can be attributed to a number of factors.
Lansen - which produces and sells prescription pharmaceuticals for the treatment of autoimmune rheumatic diseases - said a delay in the disposal plan of shares in Zhejiang Starry Pharmaceutical Co Ltd, which Lansen holds a 13% stake in, led to a significant decrease in the pretax net gain on the disposal.
Cathay said an absence of one-off income from insurance claims in 2017 also hurt 2018 profit.
A "short period of transition" expected as Lansen implemented a new strategy of focusing on its own branded products - resulting in falling revenue from product sales - also contributed to the profit decrease.
Lansen has lowered its inventory from distributors as part of its ongoing strategy.
Shares in Cathay International were untraded Friday but last closed at 7.00 pence each.
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