OJSC Pharmstandard (PHST) - Replacement - 9M2012 Sales Results
RNS Number : 5129P
25 October 2012
Moscow, 25 October 2012- Pharmstandard OJSC (LSE: PHST IL, MICEX-RTS: PHST RU)
sales results for 9M2012.
· Pharmstandard's sales increased by 15.6 % (RUR 4,133.9 million) for
9M2012 and amounted to RUR 30,560.7 million from RUR 26,426.8 million in the
Key highlights of the Russian pharmaceutical market in 3Q2012:
· For 9M2012 Russian pharmaceutical retail market increased by 24% or RUR
82,6 billion in monetary terms and amounted to RUR 428,8 billion.[ii]
· Market share of domestic pharmaceutical products is to amount to no less
than 50% by 2020
Market share of domestic pharmaceutical products is to amount to no less than
50% by 2020 and market share of medical equipment to no less than 40%. That
was stated by Dmitry Medvedev, the Prime Minister of the RF, at the government
session on the state program for pharmaceutical and medical industry
development for the current period. He recalled that RUR 100 billion were
planned to be provided for that purpose by 2020.[iii]
"We clearly realize that the efficiency of medical treatment provided to our
citizens depends on the availability of modern medical equipment and
pharmaceutical products in our hospitals and policlinics " - said the Prime
Minister mourning that currently all the modern medical centers are equipped
with foreign equipment only.
· The road map for pharmaceutical products pricing perfection proposed by
The Ministry of Economic Development and Trade.
"The road map for pharmaceutical products pricing perfection for the period
of 2012-2014 and subsequent period" proposed by The Ministry of Economic
Development and Trade and agreed upon by other ministries and departments
(Minpromtorg (Ministry of Industry and Trade), Minzdrav (Ministry of Health),
Federal Antimonopoly Service) turned out to be one of the key news topic. The
main objective of the road map is shift to insurance indemnity of
pharmaceutical products value in the course of citizens' pharmaceutical
support. The foundation was laid by change of VEP (Vital essential products)
· 18^th July 2012 - The Federation Council ratified the Russian
Federation joining of Marrakesh Agreement Establishing the World Trade
In 3Q2012 the duties collected by Russian Agency for Patents and Trademarks
from domestic pharmaceutical companies were raised, therefore we became equal
to foreign companies. Before that the duties for foreign applicants and
Russian ones had differentiated. The decrease of duty rate for foreign
pharmaceutical productsfrom 15-5 % to 6,5-5% within the transition period is
next in turn and duty rate for medical equipment and pharmaceutical substances
are going to be decreased simultaneously even faster (down to 2-3%).
Abolishment of import duties on foreign pharmaceutical products is unlikely to
influence pricing, everyone will try to use it for yield increase (by 10-15%).
Decrease in prices of substances and active pharmaceutical ingredients (API)
will have minor positive impact on domestic pharmaceutical companies.
The management of the company doesn't see any prerequisites for 15 per cent
preference abolishment in relation to contract values of domestic players for
orders of products from state and municipal entities through tender and
Under federal act № 271 - FA of 11 October 2010 "Amendments to" pharmaceutical
products circulation" federal act" article 16 "Submission and pendency of
applications for state registration of pharmaceutical preparations and
presentation of necessary documents" was supplemented with part 6 of the
following content: receipt, disclosure, commercial use and usage with a view
to state registration of the information on the results of pre-clinical trial
of pharmaceuticals and clinical trial of pharmaceutical products submitted by
the applicant for pharmaceutical products state registration without its
consent within 6 years of the pharmaceutical products state registration
We believe that competition on the Russian market will be tougher, more
reasonable and the best and strongest player will win. Our mission
"Development and production of pharmaceutical products designed to comply with
healthcare requirements and patients expectations" is going to be the same and
the strategy chosen 7 years ago is even more relevant nowadays.
· The list of VEP for 2013 hasn't been altered
In 2013 the list of VEP is similar to 2012. The list was approved by the order
of the Government of the Russian Federation of 7^th December 2011 №2199-p.
Corresponding order №1378-p of 30^th July 2012 was signed by Dmitry Medvedev,
the prime minister of the Russian Federation.
According to Veronika Skvortsova all the INNs included in the list of VEP are
going to be realized within the standards free of charge. "We mean the level
of hospitals and day hospitals except for ambulatory sector which we are going
to discuss separately "- missaid the minister - "Within INNs the preference is
to be given to generic products and preferably to domestic preparations. Our
task is to economize on the price but not the quality. It is clearly enough,
that is the state policy direction of every country." However it doesn't mean
that foreign pharmaceutical products are going to be totally excluded from the
list. "Everything depends on the availability of bioequivalent domestic
products and pricing policy"- underlined Veronika Skvortsova.
The draft order is posted on the official website of Minzdrav of Russia
(Ministry of Health). The document is supplemented with the provisions stating
that the increase of registered maximum selling price is not to exceed the
anticipated inflation level stated for subsequent year and schedule period in
the budget federal law, as well as the maximum selling price submitted for
registration is not to exceed the minimum selling price of the pharmaceutical
product set by the manufacturer in the manufacturer's country and others.
Key highlights of Pharmstandard OJSC in 3Q2012:
· 26^th June 2012 - The company announced the purchase of a controlling
stake (50.005%) in Bigpearl Trading Limited (Cyprus). This deal enabled
Pharmstandard OJSC to determine general terms of business activity of Biomed
named after I.I. Mechnikov OJSC, Pharmapark LLC and other commercial entities
comprising a group of entities which includes Bigpearl Trading Limited.
Aggregate sales of acquired companies amounted to RUR 350.4 million for
· July 2012 - The data on Arbidol® was submitted toWHO experts.
At WHO conference on effective treatment of flu and other acute respiratory
viral infection the experts were provided with the data on Arbidol®, Russian
original anti-viral medication, as well as the information on the start of
ARBITER, multicenter postregistry clinical trial, which is conducted in
compliance with the Russian laws and regulations (№61 FA" Pharmaceutical
products circulation act" of 12^th April 2010) as well as with the
international guidelines for clinical trials ICH-GCP.
ARBITER, postregistry clinical trial, of Arbidol® is the first Russian
clinical trial included in international database of ClinicalTrials.gov.[iv]
ARBITER is a double-blind, randomized, placebo-controlled, multicenter
clinical trial stipulated for two epidemic seasons of flu and ARVI (2011-2012
and 2012-2013). The trial is carried out in 17 medical centers which have the
accreditation of Ministry of Health Care and Social Development of the Russian
Federation to conduct clinical trials.
· 30^th August 2012 -Pharmstandard OJSC approved possible purchase of
additional ordinary shares by its subsidiaryPharmstandard-Leksredstva OJSC and
approved an increase of the amount from RUR 1.1 billion up to 2.0 billion
within the announcement of 9^th June 2012 about possible purchase of ordinary
shares of Pharmstandard OJSC on market terms.
Pharmstandard OJSC also indicated that it had no intention of OJSC
Pharmstandard-Leksredstva to purchase the shares in the form of Global
Depository Receipts (GDR) which circulate on London Stock Exchange (LSE).
As of 1^st October 2012 the amount of voting shares and charter capital of
Pharmstandard OJSC in possession of OJSC Pharmstandard-Leksredstva is 3 189
750 votes or 8,44 % of Pharmstandard OJSC charter capital.
· 6^th September 2012 - Federal Antimonopoly Service approved the
application of Pharmstandard OJSC to acquire 100% of «Pharmaceutical company
"Lekko" CJSC voting shares. The deal is to be closed by the end of 2012.
· October 2012 - Expert journal published the rating of the biggest
Russian companies and Pharmstandard OJSC was ranked 161, in 2010 the company
was ranked 196.
Sales results of OJSC Pharmstandard[v]
For 9M2012 pharmaceutical products sales increased by 15.1% or RUR 3,933.2
million and amounted to RUR 29,942.8 million from RUR 26,009.6 million for the
same period last year. In the structure of sales of pharmaceuticals 45.7% (RUR
13,698.4 million) represents the company's own-produced pharmaceutical
products sales, 52.9% (RUR 15,841.7 million) represents sales of third party
products (TPP) and 1.4% (RUR 402.7 million) represents substances sales.
For 9M2012 the company's own-produced pharmaceutical products sales decreased
by 2.3% (RUR 323.0 million) and amounted to RUR 13,698.4 million. In the
structure of sales of company's own pharmaceuticals 74% (RUR 10,141.9 million)
accounts for OTC products sales and 26% (RUR 3,556.5 million) accounts for Rx
For 9M2012 the company's own-produced OTC products sales decreased by 10.0%
(RUR 1,121.8 million) and amounted to RUR 10,141.9 million from RUR 11,263.8
million for the same period last year. The main cause of the decrease were
the sales of Arbidol® in 1Q2012 (RUR -1,094 million) due to absence of a flu
pandemic in Russia, according to Rospotrebnadzor (Federal Service on
Consumers' Rights Protection and Human Well-Being Surveilance) and due to
sufficient stockpiles of the product at the distributors' warehouse to meet
the current level of consumer demand and as a result the decrease in orders
for pharmaceutical products from distributors. Under RF Government Decree
N599 of 20^th July 2011 from 1^st June 2012 retail of pharmaceuticals products
with small amounts of codeine shall require a doctor's prescription. Whereby
from 1^st June 2012 revenue from the sales of products with small amounts of
codeine such as Pentalgin®, Terpincod ®, Codelac® is shown in company's
analytics section - Rx products sales, and revenue from sales of codeine-free
products in section - OTC products sales.
In 9M2012 the company's own-produced Rx products sales increased by 29% (RUR
798.9million) and amounted to RUR 3,556.5 million from RUR 2,757.6 million
for the same period last year.
The sales results for Pentalgin®, Codelac® and Terpincod® for 9M2012
For 9M2012 revenue from sales of codeine-free Pentalgin®, Codelac®amounted to
RUR 1,399.6 million with increase of 244.4% (RUR 993.2 million) compared with
the same codeine-free products sales revenue of RUR 406.4 million for the
For 9M2012 revenue from sales of Pentalgin®, Codelac®, Terpincod®with codeine
decreased by 64.2% (RUR 1,955.6 million) compared with the same codeine
products sales revenue of RUR 3,047.8 million for the previous year.
For 9M2012 aggregate sales of Pentalgin®, Codelac®, Terpincod® included both
in Rx and OTC product groups amounted to RUR 2,491.9 million with decrease of
27.9% (RUR 962.3 million) compared with RUR 3,454.3 million for the same
period last year.The deviation of aggregate sales of three brands was mainly
caused by decrease in sales of Terpincode®. For 9M2012 the sales of this
pharmaceutical decreased by 27.9% (RUR 962.3 million) and amounted to RUR
276.6 million compared with RUR 930.5 million for the same period last year.
Earlier the company reported it was not going to develop any substitutes of
this pharmaceutical and was going to reimburse losses by rolling out new
product range and increasing sales of the current one consisting of more than
For 9M2012 TPP sales increased by 35.0% (RUR 4,104.2million) amounting to RUR
15,841.7 million compared with RUR 11,737.5 million for the same period last
For 9M2012 medical equipment sales increased by 48.1% (RUR 200.7 million)
amounting to RUR 617.9 million compared with RUR 417.2 million for the same
period last year. The increase in medical equipment segment was driven by
goods range widening by means ofsales of new goods through
Pharmstandard-Medtechnika LLC due to the implementation of medical equipment
sales joint project. The joint venture was established by DGM group and OJSC
Pharmstandard in June 2011 in order to increase the sales of medical equipment
designed fordisinfection and sterilization.
Pharmstandard OJSC revenue structure 9M2012[vi]
% of 9m % of Growth
Sales 9m 2012* 9m 2012 total 2011(RUR total Growth 9m 2012/ 9m 2012/
(RUR mln) sales mln) sales 9m 2011(RUR mln) 9m 2011
Pharmaceutical 29,942.8 98.0% 26,009.6 98.4% 3,933.2 15.1%
PHST production 13,698.4 44.8% 14,021.3 53.1% -323.0 -2.3%
OTC products 10,141.9 33.2% 11,263.8 42.6% -1,121.8 -10.0%
Branded 8,506.8 27.8% 9,699.0 36.7% -1,192.2 -12.3%
Non branded 1,635.1 5.4% 1,564.8 5.9% 70.3 4.5%
RX products 3,556.5 11.6% 2,757.6 10.4% 798.9 29.0%
Branded 2,968.0 9.7% 2,219.0 8.4% 749.1 33.8%
Non branded 588.4 1.9% 538.6 2.0% 49.8 9.2%
TPP 15,841.7 51.8% 11,737.5 44.4% 4,104.2 35.0%
Velcade® 7,147.1 23.4% 1,650.7 6.2% 5,496.3 333.0%
Prezista® 1,823.4 6.0% 1,236.0 4.7% 587.4 47.5%
Reduksin® 1,403.6 4.6% 666.0 2.5% 737.6 110.7%
Mabthera® 1,195.9 3.9% 4,256.0 16.1% -3,060.1 -71.9%
Mildronate® 664.9 2.2% 677.8 2.6% -12.9 -1.9%
Other TPP 3,606.9 11.8% 3,250.9 12.3% 356.0 11.0%
Other sales (API) 402.7 1.3% 250.8 0.9% 151.9 60.6%
Sales of medical 617.9 2.0% 417.2 1.6% 200.7 48.1%
Total 30,560.7 100.0% 26,426.8 100.0% 4,133.9 15.6%
Pharmstandard OJSC (LSE: PHST LI, RTS: PHST RU) will be announcing its 9
months 2012sales results on Thursday, 25October 2012.
Pharmstandard is pleased to invite the investment community to a sales results
conference call with the management of the company followed by a Q&A session.
Thursday, 25 October, 2012
09:00 New York
International Call-in Number:+44 (0)20 7162 0025
US Call-in Number: +1 334 323 6201
Access Code: 923774
Conference call participants can register in advance using the link below:
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
Ilya Krylov, IR
Conference call presentation and press release will be available on Thursday,
25 October 2012 on Company's web-site: http://pharmstd.com/
The conference call replay will be available through October 31, 2012
International Replay Number: 020 7031 4064
Replay Access Code: 923774
Investor Relations Officer
+7 495 970 00 30 ext.2416
[i] The data includes sales of Pharmstandard-Biolek PJSC but doesn't include
sales of OJSC Biomed named after I.I. Mechnikov, Pharmapark LLC
[ii]According to the data provided by Pharmexpert, independent marketing
[iv]ClinicalTrials.gov - the biggest global registry and database of clinical
trials conducted both in the USA and other countries. Publication of the
information on clinical trials in the
database is conducted pursuant to independent verification and validation of
this database authorized specialists who examine the provided data compliance
with modern international standards of evidence based medicine. Currently
ARBITER clinical trial is the only Russian trial included in this
authoritative international database.
[v] The data includes sales of Pharmstandard-Biolek PJSC but doesn't include
sales of OJSC Biomed named after I.I. Mechnikov, Pharmapark LLC
[vi] The data includes sales of Pharmstandard-Biolek PJSC but doesn't include
sales of OJSC Biomed named after I.I. Mechnikov, Pharmapark LLC
This information is provided by RNS
The company news service from the London Stock Exchange
QRTBKPDNOBDKAKB -0- Oct/25/2012 07:38 GMT
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