Pharma Quarterly Roundup

The pharma industry enjoyed a decent bout for the quarter ended March 2015, with solid top line growth and an even more impressive bottom line growth.
The four biggest names - GSK, Ferozsons, Abbott, and Searle - constitute over 90 percent of the pharmaceutical sectors total market capitalization. GSK as usual led the pack in terms of revenue with around Rs5.8 billion, while Abbott had the largest bottom line figure of Rs563 million. However, both these figures were lower on a year-over-year basis.
In terms of growth, Ferozsons top line showed the most ferocious increase of 89 percent to nearly Rs1.3 billion, while Searles bottom line showed an enormous jump of over 157 percent to Rs462 million.
Save for Abbott, all pharmaceutical firms enjoyed higher profits year-over-year for the three-month period; Ferozsons realized gains from sales of Sovaldi over the quarter, and the first week of March marked the completion of GSKs deal with Novartis AG to acquire its vaccines business. Moreover, lower fuel costs coupled with a stronger rupee would have helped to provide some relief to margins.
But perhaps the most important development was the introduction of a new pricing policy in March which, among other things, sought to keep drug prices frozen at the October 2013 levels until July 2016, after which annual increases in drug prices linked with the CPI will be allowed. However, the Sindh High Court suspended the price freeze.
Pharmaceutical companies in Pakistan continue to emphasize their consumer healthcare segments in order to realize more gains and get some relief from the constrained margins of the pharmaceutical segment. But just one more fiscal year and effective July 1, 2016, things might take a turn for the better.

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Pharma Industry Quarterly Financials*

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                                  Quarter ended

Rs (mn)                        Mar-15   Mar-14    YoY change

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Sales                          13,308   12,532            6%

Cost of Sales                   8,666    8,413            3%

Gross Profit                    4,642    4,119           13%

GP Margin                         35%      33%    up 200 bps

Administrative expenses           419      397            6%

Selling & Distribution          1,922    1,860            3%

Finance cost                       61       70          -13%

Other expenses                    218      186           17%

Other income                      460      523          -12%

Profit after tax                1,785    1,432           25%

NP Margin                         13%      11%    up 200 bps

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