Pharmstandard OJSC reports its 1H2013 sales results

25.07.2013

Moscow, July 25, 2013 – Pharmstandard OJSC (LSE: PHST IL, RTS: PHST RU) (further “Pharmstandard” or the “Company” announces its unaudited 1H2013 sales results. 

1H2013 sales data includes numbers for Pharmapark LLC, Biomed named after I.I. Mechnikov OJSC and LEKKO CJSC acquired in 2012 (further “New Companies”).

As of January 1, 2013 100% of TZMOI OJSC sales are included into the Company’s revenue.

Sales highlights.

· In 1H2013 Pharmstandard sales reached RUR16 436m demonstrating RUR270m or +2% y/y growth, compared to RUR16 166m in 1H2012

· In 1H2013 Pharmstandard sales excluding third party products (further “TPP”) reached RUR 10 544m demonstrating RUR2 141m or +25% y/y growth, compared to RUR8 403m in 1H2012

· Pharmaceutical products and medical equipment accounted for 97.2% and 2.8%. of the Company’s total sales in 1H2013, respectively

· In 2Q2013 Pharmstandard sales reached RUR7 292m falling RUR718m or -9% y/y, compared to RUR8,010m in 2Q2012

· In 2Q2013 Pharmstandard sales excluding TPP reached RUR4 467m demonstrating RUR443m or +11% growth y/y, compared to RUR4 024m in 2Q2012

1H2013 key highlights and developments

· Over-the-counter spin-off. On July 5, 2013 Company’s Board of Directors agreed to announce the extraordinary shareholder meeting (further “ESM”) to discuss Company reorganization, i.e. a spin-off of Company’s branded over-the-counter business (further “OTC”) into a separate legal entity whose shares will be proportionally distributed among the shareholders of the Company (further «NewCo»). In the course of the last several years the Company has significantly diversified its business within the Russian pharmaceutical market and stopped being just an OTC focused company: in 2012 71% of the total revenue came from TPP, Rx, Medical Equipment and Other. The main strategic rationale for the spin-off in management’s view is disclosure of the most adequate and proper value of OTC business to all of its shareholders. OTC business will have a separate experienced management team led by Olga Mednikova, presently Head of Marketing at Pharmstandard. Company’s management believes that going on forward the reorganization will allow achieving better results in growing both parts of our businesses – OTC and Rx. OTC business revenue reached RUR12 662m in 2012 which is 25% of the Company total revenue.

· The ESM on the spin-off of OTC will take place on September 27, 2013.

· Potential acquisition of 100% shares of Bever Pharmaceutical PTE LTD (further «Bever Pharma”). On July 5, 2013 Company’s Board of Directors agreed to announce an extraordinary shareholder meeting (further “ESM”) to discuss a potential acquisition of 100% share capital of Bever Pharma for US$630m. Bever Pharma holds exclusive rights for supply of active pharmaceutical ingredients (further “API”) for production of Arbidol® and Aphobazolum® at a fixed price. Following this acquisition, the Company will decrease its API procurement costs. The Company is currently in the process of due diligence of Bever Pharma and negotiations of key terms of the transaction and envisages to obtain customary for the transaction of this nature fairness and legal opinions from major international professional firms. Agreed price for Bever Pharma will be, among other things, subject to final due diligence findings.The Company envisages to sign definitive transaction documentation ahead of ESM and will provide full disclosure on key terms of the transaction. If approved by ESM, Bever Pharma will be acquired by the Company and will ultimately become part of NewCo. ESM on acquisition of Bever Pharma will take place on August 17, 2013.

· Buyback Program. On February 15, 2013 Company’s Board of Directors approved a buyback program in respect of ordinary shares of Pharmstandard OJSC and/or Global Depositary Receipts representing Shares (each GDR representing 4 Shares) (further the “Program”) in the aggregate amount of up to RUR8bn. Duration of the Program was until December 31, 2013. On July 17, 2013 the Company announced the completion of the Program in the course of which 15 009 162 GDRs and 140 000 ordinary shares were purchased on the open market as of July 16, 2013. Any Shares and GDRs acquired pursuant to the Program may be used for purposes of financing the Company's operations or for M&A transactions.

New shareholder structure is as follows: Augment Investments Limited – 54.3185% (ordinary shares and GDRs); LSE – 17.64% (GDRs); RTS/MICEX – 9.31% (ordinary shares); Pharmstandard-Leksredstva OJSC – 18.7392% % (ordinary shares and GDRs).

Pharmaceutical products. Sales results.

Pharmaceutical sales in 1H2013 increased by RUR186 million (+1%) up to RUR15 972m vs RUR15 786m in 1H2012, with organic sales accounting for 60%, TPP for 37% and API for 3% in the pharmaceutical sales mix.

Organic pharmaceutical sales in 1H2013 amounted to RUR9 567m (+23%) vs RUR7 771m in 1H2012 with 69% accounted for by OTC products and 31% by Rx products.

Organic prescription product (Rx) sales in 1H2013 grew by RUR672m (+30%) to reach RUR2 932m. Key growth drivers were Biosulin®, Combilipen® and Formetine®.

Organic over-the-counter (ОТС) product sales in 1H2013 went up to RUR6 635m (+20%). In 1H2013 Arbidol® demonstrated 75% growth vs 1H 2012 reaching RUR1 136m in sales.

TPP sales in 1H2013 went down to RUR5 892m (-24%) (vs RUR7 764 million in 1H2012).

Production localization. 7 Nosologies Federal Program.

TPP sales decrease in 1H2013 is directly attributed to production localization segment decline due to lack of government purchases via public auctions under 7 Nosologies Federal Program. This particularly relates to zero sales for Presista® that accounted for 54% of the total TPP sales a year before, as well as decrease in 1H2013 sales of both Presista® and Intellence® with their auctions being moved to regional levels.

Aggregate sales of production localization segment EXCLUDING Velcade® remained almost flat y/y.

For 2H2013 the auctions are announced for Infibeta®, Coagil®, Mabthera®, Velcade® , Pulmozyme® and Rastan® for the total amount of RUR1 430m. This sum may be subject to change.

Brand 

Category 

1H 2013 

1H 2012

Change

Sales, 
RURm 

% of TPP 
sales
 

Sales, 
RURm 

% of TPP 
sales
 

RURm 

% 

Mabthera® 

Rx

536

9%

388

5%

147

38%

Coagil-VIII

Rx

414

7%

69

1%

345

500%

Revlimid

Rx

415

7%

187

2%

228

123%

Infibeta®

Rx

202

3%

0

-

202

-

Presista® 

Rx

233

4%

935

12%

-702

-75%

Intellence® 

Rx

89

2%

295

4%

-206

-70%

Velcade® 

Rx

0 

-

2 346

30%

-2 346

-100%

Other TPPs 

Rx

146

2%

161

3%

-15

-9

Total for the group 

Rx

2 035

35%

4 381

56%

-2 347

-54%

Total TPPs 

Rx

5,892

100%

7,764

100%

-1,872

-24%

 

 

Commercial segment

Commercial TPP sales reached RUR3 857m (+14%) primarily driven by Reduksin®, Tamiflu and Atimos.

Brand 

Category

1H 2013 

1H 2012

Change

Sales, 
RURm 

% of TPP 
sales
 

Sales, 
RURm 

% of TPP 
sales
 

RURm 

% 

Reduxin® 

OTC, Rx

1 445

25%

1,275

16%

170

13%

IRS-19®, Imudon® 

Rx

516

19%

158

2%

358

227%

Mildronate®

OTC

420

7%

474

6%

-54

-11%

Tamiflu

Rx

210

9%

41

1%

169

409%

Atimos®

Rx

56

1%

6

0,1%

50

856%

Other TPPs 

OTC, Rx

1 211

55%

1,429

75%

-218

-15%

Total for the group 

OTC, Rx 

3 857

65%

3,382

44%

475

14%

Total TPPs 

OTC, Rx 

5 892

100%

7,764

100%

-1,872

-24%

 

Medical equipment sales as of 1H2013 amounted to RUR464m (+22%).

 

 

 

 

 

 

Pharmstandard OJSC sales structure, 1H2013

1H2013 SALES 

1H2013 (RURm) 

% of total sales 

1H2012 (RURm) 

% of total sales 

1H2013/ 1H2012 y/y growth (RURm) 

1H2013/ 1H2012 y/y growth (%) 

Pharmaceutical products 

15 972

97.6%

15 786

97,6%

186

1%

PHS production

9 567

48.1%

7 771

48,1%

1 797

23%

OTC 

6 635

34.1%

5 511

34,1%

1 124

20%

Branded 

5 366

27.8%

4 496

27,8%

869

19%

Non-branded 

1 270

6.3%

1 015

6,3%

255

25%

Rx 

2 932 

14.0%

2 260

14,0%

672

30%

Branded 

2 524

11.5%

1 866

11,5%

657

35%

Non-branded 

408

2.4%

393

2,4%

15

4%

TPP

5 892

48.0%

7 764

48,0%

-1 872

-24%

Other sales – substances

512

1.6%

252

1,6%

261

103%

including New Companies

805

5%

-

-

100%

100%

Medical equipment 

464

2.4%

380

2,4%

84

22%

Pharmstandard Group total sales 

16 436

100.0%

16 166

100,0%

270

2%

Pharmstandard OJSC sales structure (excl.TPP), 1H2013

1H2013 SALES EXCL. TPP 

1H2013 (RURm) 

% of total sales 

1H2012 (RURm) 

% of total sales 

1H2013/ 1H2012 y/y growth (RURm) 

1H2013/ 1H2012 y/y growth (%) 

Pharmaceutical products 

10 080

95,6%

8 023

95,5%

2 057

26%

PHS production

9 567

90,7%

7 771

92,5%

1 797

23%

OTC 

6 635

62,9%

5 511

65,6%

1 124

20%

Branded 

5 366

50,9%

4 496

53,5%

869

19%

Non-branded

1 270

12,0%

1 015

12,1%

255

25%

Rx

2 932

27,8%

2 260

26,9%

672

30%

Branded

2 524

23,9%

1 866

22,2%

657

35%

Non-branded

408

3,9%

393

4,7%

15

4%

Other sales – substances

512

4,9%

252

3,0%

261

103%

including New Companies

805

5%

-

-

100%

100%

Medical equipment

464

4,4%

380

4,5%

84

22%

Pharmstandard Group total sales

10 544

100%

8 403

100,0%

2 141

25%

Pharmstandard OJSC sales structure, 2Q2013

2Q2013 SALES

2Q2013 (RURm)

% of total sales

2Q2012 (RURm)

% of total sales

2Q2013/ 2Q2012 y/y growth (RURm)

2Q2013/ 2Q2012 y/y growth (%)

Pharmaceutical products

7 108

97%

7 805

97,4%

-696

-9%

PHS production

4 028

55%

3 696

46,1%

333

9%

OTC

2 586

35%

2 544

31,8%

42

2%

Branded

2 060

28%

2 030

25,3%

31

2%

Non-branded

525

7%

514

6,4%

11

2%

Rx

1 443

20%

1 151

14,4%

291

25%

Branded

1 261

17%

988

12,3%

273

28%

Non-branded

182

2%

164

2,0%

18

11%

TPP

2 825

39%

3 986

49,8%

-1 161

-29%

Other sales – substances

255

3%

123

1,5%

132

107%

including New Companies

450

6%

-

-

100%

100%

Medical equipment

184

3%

206

2,6%

-22

-11%

Pharmstandard Group total sales

7 292

100%

8 010

100,0%

-718

-9%

Pharmstandard OJSC sales structure (excl.TPP), 2Q2013

2Q2013 SALES (EXCL.TPP)

2Q2013 (RURm)

% of total sales

2Q2012 (RURm)

% of total sales

2Q2013/ 2Q2012 y/y growth (RURm)

2Q2013/ 2Q2012 y/y growth (%)

Pharmaceutical products

4 283

96%

3 819

94,9%

465

12%

PHS production

4 028

90%

3 696

91,8%

333

9%

OTC

2 586

58%

2 544

63,2%

42

2%

Branded

2 060

46%

2 030

50,4%

31

2%

Non-branded

525

12%

514

12,8%

11

2%

Rx

1 443

32%

1 151

28,6%

291

25%

Branded

1 261

28%

988

24,5%

273

28%

Non-branded

182

4%

164

4,1%

18

11%

Other sales – substances

255

6%

123

3,1%

132

107%

including New Companies

450

6%

-

-

100%

100%

Medical equipment

184

4%

206

5,1%

-22

-11%

Pharmstandard Group total sales

4 467

100%

4 024

100,0%

443

11%

OTC business sales structure, 1H2013

In the light of the BoD approval of OTC spin-off we believe that it is useful to disclose potential NewCo 1H2013 sales structure and y/y dynamics of the 27 brands that will constitute NewCo business if approved by ESM.

BRAND

1H2013 (RURm)

% of total sales

1H2012 (RURm)

% of total sales

1H2013/ 1H2012 y/y growth (RURm)

1H2013/ 1H2012 y/y growth (%)

Amixin®

474

8.6%

268

6.1%

206

77%

Arbidol®

1,136

20.5%

651

14.8%

485

75%

Asvitol®

47

0.8%

38

0.9%

9

22%

Ascophenum-P®

71

1.3%

58

1.3%

13

21%

Aphobazolum®

469

8.5%

297

6.8%

172

58%

Acipol®

264

4.8%

181

4.1%

83

46%

Aerovit®

2

0,03%

2

0.04%

0

-4%

Klarisens®

6

0.1%

8

0.2%

-2

-29%

Codelac®

259

4.7%

277

6.3%

-17

-6%

Complivit®

728

13.2%

665

15.1%

63

9%

Lactazar®

12

0.2%

9

0.2%

3

33%

Lactonorm®

3

0.1%

0

-

3

-

Magnelis B6®

127

2.3%

81

1.9%

46

56%

Maxycold®

34

0.6%

14

0.3%

19

133%

Medira®

1

0.01%

5

0.1%

-4

-89%

Next®

62

1.1%

7

0.2%

55

824%

Neosmectin®

47

0.9%

37

0.8%

10

27%

Nitrocor®

16

0.3%

18

0.4%

-1

-8%

Noopept®

60

1.1%

0

-

60

-

Pentalgin®

1,036

18.7%

1,197

27.3%

-160

-13%

Rinostop®

81

1.5%

63

1.4%

19

30%

Selmevit®

69

1.2%

60

1.4%

9

15%

Spasmol®

2

0.04%

3

0.1%

-1

-33%

Termicon®

99

1.8%

84

1.9%

14

17%

Flucostat®

399

7.2%

353

8.1%

46

13%

Ciklovita®

6

0.1%

0

-

6

-

Cinocap®

20

0.4%

15

0.3%

5

32%

Total:

5,529

100%

4,391

100.0%

1,138

26%

1H 2013 sales results conference call

OJSC Pharmstandard takes pleasure to invite you to participate in 1H2013 Sales Results Conference Call followed by a Q&A session.

Conference Call will take place on

Thursday, 25 July 2013

09:00 New York

14:00 London

17:00 Moscow

International Call-in Number: +44 (0)20 7162 0025

US Call-in Number: +1 334 323 6201

Conference ID: 935176

The speakers will be presenting in RUSSIAN with a separate line for simultaneous translation into English.

 

The listeners will be prompted by the operator to choose which line to join.

Conference call participants can register in advance using the links below:

RUSSIAN Version:

https://eventreg1.conferencing.com/webportal3/reg.html?Acc=682729&Conf=188138

ENGLISH Version:

https://eventreg1.conferencing.com/webportal3/reg.html?Acc=682729&Conf=188137

We recommend that participants start dialing in 5-10 minutes prior to ensure a timely start to

the conference call.

 

Pharmstandard will be represented by:

Igor Krylov, CEO

Elena Arkhangelskaya, CFO

Viktor Fedlyuk, Head of Legal

Irina Bakhturina, IR

 

Conference call presentation

will be available on Thursday, July 25, 2013 on Company's web-site:

http://pharmstd.com/

 

The conference call replay will be available through August 1, 2013

International Replay Number: +44 (0) 20 7031 4064

US Replay Number: +1 954 334 0342

RUSSIAN Replay Access Code: 671539#

ENGLISH Replay Access Code: 935176#

Contacts:

Irina Bakhturina

Investor Relations

OJSC Pharmstandard

Tel: +7 495 970 0030 ext 2824

E-mail: ir@pharmstd.ru


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Media Contacts



Alexey Chernushkin


Chief Investment Officer, Pharmstandard JSC

+7 (495) 970 0030
+7 (495) 970 0032
ir@pharmstd.ru

5B, Likhachyovsky Proezd, Dolgoprudny, Moscow Region, 141701, Russia

+7 (495) 970 0030/32

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