Pharmstandard OJSC reports its H1/Q2 2014 sales results

14.08.2014

Moscow, August 14, 2014 – Pharmstandard OJSC (LSE: PHST IL, RTS: PHST RU) (further “Pharmstandard” or the “Company”) announces its unaudited Q2/H1 2014 sales results. 

On April 1, 2014 OTCPharm PJSC (further “OTCPharm”), OTC business that was spun-off from Pharmstandard OJSC, started independent operating activities.

As of Q2 2014 OTCPharm sales are no longer included into Pharmstandard sales and will be recognized in OTCPharm statements.

Sales highlights.

  • H1 2014 Pharmstandard sales reached RUR17 224m demonstrating RUR321m or +2% y/y growth, compared to RUR16 903m in H1 2013
  • Pharmaceutical products and medical equipment accounted for 71.7% and 1.6%. of the Company’s total sales in H1 2014, respectively. 5.8% of total sales is attributed to Services to third parties including agency fees and contract manufacturing (further “CMO”). 20.9% of total sales is attributed to sale of finished goods and raw materials to OTCPharm in April 2014 as a result of the spin-off
  • In Q2 2014 Pharmstandard sales reached RUR9 264m growing by RUR1 750m or +23% y/y, compared to RUR7,514m in Q2 2013

H1 2013 key highlights and developments

  • Acquisition of a 20% stake in Biocad Holding Ltd.  On May 21, 2014 OJSC Pharmstandard and Millhouse LLC announced plans to acquire stakes (individually) in Biocad Holding Ltd., the main shareholder in Russian biotechnological company CJSC Biocad (“Biocad”). Biocad specializes in the development, production and promotion of original and generic drugs in the following therapeutic categories: urology, gynecology, dermatovenerology, oncology, hematology, autoimmune and infectious diseases.

The deal was finalized on July, 24. Under the terms of the deal, Pharmstandard acquired 20% of Biocad Holding, while a Millhouse-affiliated entity will purchased a further 50% stake.

Pharmaceutical products. Sales results.

Pharmaceutical sales  in H1 2014 decreased by RUR3 628 million (-23%) up to RUR12 342m vs RUR15 970m in H1 2013, with organic sales accounting for 54%, TPP for 42% and API for 4% in the pharmaceutical sales mix. The decrease is mainly attributed OTC products (-45.2%) with majority of them being moved to OTCPharm and TPP products (-11.9%)

Organic pharmaceutical sales in H1 2014 amounted to RUR6 674m (-30%) vs RUR9 558m in H1 2013. The structure of sales changed as a result of the spin-off with 54% accounted for by OTC products and 46% by Rx products.

Organic prescription product (Rx) sales in H1 2014 grew by RUR115m (+4%) to reach RUR3 037m. Key growth drivers were Phosphoglive®, Combilipen® and Octolipen®.

Organic over-the-counter (ОТС) product sales in H1 2014 went down to RUR3 637m (-45.2%) with the majority of OTC products being moved to OTCPharm – a company spun-off from Pharmstandard which started its’ independent operating activities on of April 1, 2014.

Spin-off effect. In April 2014, to launch operating activities of OTCPharm, all finished goods of OTC products and raw materials for manufacturing of these products were sold to OTCPharm by the Group at the amount of RUR3 596m.

Services to third parties. The Company provides services to third parties which were reclassified to regular revenue in 2014. These services include contract manufacturing and agency contracts with OTCPharm.

Contact Manufacturing. The Company’s subsidiaries provide services for the manufacturing of certain products from the raw materials owned by customers. Since 2014, the management of the Group is classified contractual manufacturing as a regular revenue. Thereof, Pharmstandard reclassified income from contractual manufacturing accounted previously on net basis from other income to revenue.

Agency Fees. The Company holds agency contracts with related parties for distribution and sales of certain products. Since 2014, the management of the Group classified agency fee income as a regular revenue. Thereof, Pharmstandard reclassified agency fee income from other income to revenue and for the purpose of comparative analysis, the prior year figures were restated accordingly.

TPP sales in H1 2014 went down to RUR5 202m (-12%) (vs RUR5 902 million in H1 2013). 

Government procurement. 7 Nosologies Federal Program.

Government procurement segment demonstrated 18% growth in H1 2014 bringing back Velcade to the list.

H1 2014 sales reached RUR2 399m vs RUR2 035m in H1 2013.

Coagil® and Infibeta declined for the total sum of RUR367m due to relocation of auction timing.

For H2 2014 the auctions are announced for Velcade®, Mabthera®, Pulmozyme® and Rastan®.

Brand 

Category 

H1 2014

H1 2013

Change

Sales, 
RURm 

% of TPP 
sales
 

Sales, 
RURm 

% of TPP 
sales
 

RURm 

% 

Mabthera®

Rx

588

11%

536

9%

52

10%

Revlimid

Rx

428

8%

415

7%

13

3%

Presista®

Rx

419

8%

233

4%

186

80%

Velcade®

Rx

280

5%

0

-

280

-

Coagil

Rx

248

5%

414

7%

-166

-40%

Infibeta

Rx

23

0.0004%

202

3%

-201

-100%

Other TPPs

Rx

436

8%

235

4%

204

46%

Total for the group

Rx

2 399

46%

2 035

34%

364

18%

Total TPPs

Rx

5 202

100%

5 902

100%

-700

-12%

Commercial segment

Commercial TPP sales in H1 2014 declined to RUR2 803m (-28%) primarily driven by Reduksin® sales which fell RUR937m (-65%) causing a significant effect on TPP segment overall.

Brand

Category

H1 2014

H1 2013

Change

Sales, 
RURm

% of TPP 
sales

Sales, 
RURm

% of TPP 
sales

RURm

%

IRS-19®, Imudon®

Rx

763

15%

516

9%

247

48%

Reduxin®

OTC, Rx

508

24%

1 445

24%

-937

-65%

Mildronate®

OTC

455

9%

420

7%

36

9%

Emoksipine

Rx

171

3%

124

2%

47

38%

Other TPPs

OTC, Rx

906

17%

1 362

23%

-456

-34%

Total for the group

OTC, Rx

803

54%

3 867

66%

-1 064

-28%

Total TPPs

OTC, Rx

5 202

100%

5 902

100%

-700

-12%

Decline in Reduxin® sales is a result of regulatory changes. The Company cannot make plans to receive revenue from Reduxin sales further on. 

Other TPPs declined -34% (-RUR456m) driven by completion of sales under single procurement contracts concluded in year 2011.

H1 2014 medical equipment sales reached RUR284m (-39%).

H1/Q2 2014 Sales structure.

H1 2014 SALES

H1 2014 (RURm)

% of total sales

H1 2013 (RURm)

% of total sales

y/y growth (RURm)

y/y growth (%)

Pharmstandard Group total sales

17 224

100%

16 903

100%

321

2%

Pharmaceutical products

12 342

72%

15 970

95%

-3 628

-23%

Organic pharmaceutical sales

6 674

39%

9 558

56%

-2 884

-30%

Rx

3 037

18%

2 922

17%

115

4%

Branded

2 682

16%

2 524

15%

158

6%

Non-branded

356

2%

399

2%

-43

-11%

OTC

3 637

21%

6 635

40%

-2 998

-45%

TPP

5 202

30%

5 902

35%

-700

-12%

Government procurement

2 399

14%

2 035

12%

364

18%

Commercial

2 803

16%

3 867

23%

-1 064

-28%

Other sales – substances

466

3%

511

3%

-45

-9%

Medical equipment

284

2%

464

3%

-180

-39%

Services to third parties (incl. CMO and agency fees)

1 002

6%

468

3%

534

114%

Sale of finished goods and raw materials to

OTCPharm (spin-off effect)

3 596

21%

-

-

3 596

100%

 

Q2 2014 SALES

Q2 2014 (RURm)

% of total sales

Q2 2013 (RURm)

% of total sales

y/y growth (RURm)

y/y growth (%)

Pharmstandard Group total sales

9 264

100%

7 514

100%

1 750

23%

Pharmaceutical products

4 972

54%

7 107

95%

-2 135

-30%

Organic pharmaceutical sales

2 071

22%

4 019

54%

-1 948

-49%

Rx

1 462

16%

1 433

19%

29

2%

Branded

1 293

14%

1 261

17%

32

3%

Non-branded

169

2%

172

2%

-3

-2%

OTC

609

7%

2 586

34%

-1 976

-76%

TPP

2 062

28%

2 835

38%

-233

-8%

Government procurement

1 595

17%

767

10%

828

108%

Commercial

1 007

11%

2 068

28%

-1 061

-51%

Other sales – substances

299

3%

254

3%

45

18%

Medical equipment

184

2%

184

2%

0.2

0.1%

Services to third parties (incl. CMO and agency fees)

513

6%

223

3%

289

130%

Sale of finished goods and raw materials to

OTCPharm (spin-off effect)

3 596

39%

-

-

3 596

100%

Q2/H1 2014 Sales Results Conference Call

Moscow, August 14, 2014 – OJSC Pharmstandard (LSE: PHST LI, RTS: PHST RU) will be announcing its Q2/H1 2014  sales results on Thursday, August 14, 2014 at 17:00 PM Moscow time.

Pharmstandard takes pleasure to invite you to participate in Q2/H1 2014 sales results Conference Call followed by a Q&A session.

Conference Call will take place on

Thursday, August 14, 2014

09:00 New York

14:00 London

17:00 Moscow 

UK Call-in Number: +44(0)20 7136 6283

US Call-in Number: +1646 254 3364

Russia Call-in Number: +7499 922 3967

Confirmation code: 3880083 

Pharmstandard will be represented by:

Igor Krylov, CEO

Irina Bakhturina, Head of IR 

Conference call presentation

will be available on August 14, 2014

on our web-site:

http://pharmstd.com/ 

The conference call replay will be available through August 21th, 2014

International Replay Number: +44 (0)20 3427 0598

US Replay Number: +1 347 366 9565

Russia Replay Number: +7 (495) 705 9453

National free phone - Russian Federation:           810 800 2870 1012

Replay Access Code: 3880083

 

Contacts:

Irina Bakhturina

Head of Investor Relations

Pharmstandard OJSC

Tel: +7 495 970 0030 ext 2824

E-mail: ir@pharmstd.ru


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Media Contacts



Marina Shurkina


Head of Administrative Division Pharmstandard JSC

+7 (495) 970 0032
pr@pharmstd.ru

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

+7 (495) 970 0030/32

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