A lab technician examines swab samples from suspected Covid-19 patients at Pelindo Husada Citra Hospital in East Java. (Antara Photo/Mochamad Asim)

Kalbe Farma and South Korea's Genexine to Start Human Trial for Covid-19 Vaccine


MAY 29, 2020

Jakarta. Kalbe Farma, Indonesia's largest listed pharmaceutical company by revenue, is set to conduct human trial for a Covid-19 vaccine next month with help from the company's South Korean biotechnology partner, Genexine.

Kalbe and Genexine have already signed a memorandum of understanding to hold the human trial for GX-19, a coronavirus vaccine developed by the latter and South Korean drugmaker Binex, the International Vaccine Institute (IVI), Daegu-based biotech firm GenNBio, the Korea Advanced Institute of Science & Technology (Kaist) and Pohang University of Science & Technology (Postech). 

"Kalbe hopes research and development for the Covid-19 vaccine [in Indonesia] could quickly obtain results so we can ensure its local availability," Kalbe Farma Director Sie Djohan said in a statement on Thursday. 

The consortium has already tested the vaccine on primates where it was reportedly able to produce antibodies capable of neutralizing SARS-CoV-2, the scientific name of the coronavirus.


Sie said Kalbe Farma will consider forming partnerships with government agencies to develop the Covid-19 vaccine. 

Kalbe Farma and Genexine have a long history together. The companies established a joint venture company called Kalbe Genexine Biologics in 2015 to build factories, including one to manufacture raw materials for pharmaceutical drugs in Cikarang, West Java.

According to Kalbe Farma President Director Vidjongtius, the company has decided to retain more of its 2019 earnings to prepare for uncertain times ahead as the Covid-19 pandemic continues to wreak havoc on the economy.

The company distributed only 37 percent of its Rp 937.5 billion ($63.7 million) net income from 2019 to shareholders, the equivalent of Rp 20 per share.

Last year, the company distributed 50 percent of its income as dividends. 

Stock Prospects

Analysts say Kalbe Farma's financial performance has been strengthening amid the pandemic. The outbreak has actually driven up sales of the company's pharmaceutical drugs and medical devices.

Danareksa Sekuritas projected Kalbe Farma's sales value would increase to Rp 24.2 trillion this year, up 6.9 percent from Rp 22.63 trillion last year. Its net income would increase by 0.4 percent to Rp 2.52 trillion from Rp 2.51 trillion. 

Danareksa Sekuritas analyst Natalia Sutanto said demand for the company's products is expected to increase the longer the Covid-19 pandemic lasts.

"The increase in demand is expected to continue until the end of this year. This will have a positive impact on the company's financial performance," Natalia said.

The government's plan to cut corporate income tax from 25 percent to 22 percent would also provide an extra boost for Kalbe Farma's finances, with the company set to enjoy a 4.7 percent bump up in net income if it goes ahead.

Danareksa Sekuritas has maintained its "buy" recommendation for Kalbe Farma shares and lifted the share price target from Rp 1,500 per share to Rp 1,700.

Kalbe Farma shares were traded at Rp 1,435 per share at 10 a.m. on Friday.