Indies Pharma records strong first half
Due to Indies Pharma Jamaica Limited’s second-quarter (February to April) revenue rising by 25 per cent to a record $250.58 million, its first six months performance moved up nine per cent to $462.88 million.
The company, which distributes products under the Bioprist pharmaceuticals brand, with lifetime access to over 200 trademarks, and operates the Trident Pharmacy, attributed the second-quarter sales growth to strong demand and strategies implemented to drive growth. With the stabilisation in shipping costs, the company’s gross margin improved from 60 to 71 per cent at $178.53 million.
The company attributed the 16 per cent rise in expenses to $99.04 million to the service cost for its vehicles and the Bioprist royalty. Bioprist Holdings Inc is Indies’ parent company and charges a base fee of US$58,600 per year with an additional 12 per cent fee on all sales above $650 million payable in quarterly intervals. The company earned $846.83 million in it 2021 financial year (FY).
Despite the rise in expenses, the company’s operating profit topped $79.78 million. Due to the appreciation of the Jamaican dollar during the period and the decline in finance costs, the company’s net profit rose by 213 per cent to $64.12 million with an earnings per share (EPS) of $0.05. Operating profit for the six months closed the period at $144.79 million with net profit up 68 per cent to $114.65 million with an EPS of $0.09.
Total assets were up 35 per cent year over year to $2.25 billion as the company recognised a larger right of use asset from a new lease and cash and cash equivalents of $260.25 million. Property, plant and equipment hit $944.40 million due to the improved valuation on its subsidiary Indies Pharma Business Park Limited which holds three acres of land at Lot 1, Montego Park Estate, Ironshore, Montego Bay.
The development plan for the property was submitted to the St James Municipal Corporation last year with the company aiming to complete the development by 2023. The property will be the permanent home of the company when completed. It is also set to house business processing outsourcing (BPO) operations and be a knowledge processing and financial centre. It will also host 200 parking spaces.
Chairman and Chief Executive Officer Dr Guna Muppuri described the vision of the property at its company’s annual general meeting last month as becoming the “Gateway of Montego Bay”.
“We will be welcoming everyone into the city. It is going to be a phenomenal statement building that is going to change the entire outlook for Montego Bay,” Mupurri added.
Its affiliate, Bioprist Knowledge Parks, currently hosts a BPO centre at its head office on Pimento Way, Freeport in St James. The location is a special economic zone with the other locations in Sandy Bay and Lucea in Hanover.
The company’s intangible assets also increased by 138 per cent to $346.02 million as its continues the development of the two ANDA (abbreviated new drug application) drugs with agreement with KP Pharmaceutical Technology Inc. The rise in the intangibles was matched with the decline in its Proven Investments Limited USD Indexed note to $121.02 million. $28.40 million was spent during the first six months on the drug developments. The drugs are currently going through the development process with the United States Food and Drug Administration with an expectation for it to be launched in the last quarter of 2023 which would be the start of the company’s 2024 FY.
One ANDA is a cardiovascular drug with a current market size of US$680 million with the second ANDA being an anti-cancer drug with a current market size of US$60 million. The company is aiming to carve out a niche in the combined US$740 million ($11.40 billion) market.
Total liabilities rose by 23 per cent to $1.18 billion due to the $150.58 million dividend payable provision ($0.113) and $70.53 million lease liability. Shareholders equity increased by 53 per cent to $1.07 billion.
Dr Muppuri is looking forward to the various opportunities for the company which includes organic growth, the completion of the two ANDA’s and the business park to successfully repay its $805 million bond due in September 2025. This is in spite of the rising costs of pharmaceuticals and other products due to the rise in input costs globally.
Investors rewarded the company’s second-quarter performance with a 15 per cent rise at market open to halt it for an hour at $3.52 and an intraday high $3.70. The price increase to $3.52 erased the year to date loss and turned it into a six per cent increase with a market capitalisation of $4.69 billion.