Aoxing Pharmaceutical Company – AXN

First, the disclaimer. I’m not a professional and don’t expect the investor jargon and lingo after every other word. Keeping this as simple as possible.

The Chinese Pharmaceutical landscape is chock full of companies. Many with cutting edge developments and growing revenues. In particular, the demand for pain management medication is growing as the culture is slowly transitioning from one rooted in traditional beliefs and herbal therapies to one of pills and operations. I’m attributing this trend to advancements in therapies and western influence. This brings me to Aoxing Pharmaceutical.

The U.S. incorporated Chinese company is tracking to become a leader in the pain management and addiction treatment market in China. According to their last filing, the leading product Zhongtong’an has accounted for 92.5% of sales. However they have also recently, as in pharma years, received approval and started production of their Tilidine tablets. The company notes that sales of Tilidine “have not yet contributed to sales” but I sense this is because collecting monies from hospitals can take some time. This due revenue should be recorded as accounts receivable which currently has witnessed a 13% increase from December 31, 2016 and a 39% increase since June 30, 2016.

The next catalyst for this company is the pain management drug Oxycodone. Currently, AXN is awaiting approval from the China State Food and Drug Administration (SFDA) to determine if production can start. It is anticipated that that communication from the SFDA is expected at some point this year according to the investor presentation on the companies website. Regardless of where the share price is on this day of approval, I expect a pretty significant pop opportunity. Another point of significance to note is that the company will be the only domestic producer of Oxycodone for five key markets in China. What I continue to expect to see from Aoxing Pharmaceutical is management efforts to expanding into more regions in China and progression with new products. More details to come.