OTCPharm OJSC reports its 9m 2015 sales results

02.11.2015

Moscow, November 02, 2015 – OTCPharm OJSC (the Company) announces its 9m 2015 sales results.

Company profile

OTCPharm OJSC (since 10 December 2014 – OTCPharm PJSC) was incorporated on 23 December 2013 following Pharmstandard OJSC reorganization by spinning-off the branded OTC business into the Company. Since 1 April 2014, OTCPharm has started its operations independently of Pharmstandard Group. Since 30 December 2014, the Company’s shares are traded on the Moscow Exchange.

OTCPharm PJSC is a #2 company in the Russian OTC pharmaceutical market by the market share in value terms, the Company’s product portfolio is represented in most of the largest therapeutic categories.

To date OTCPharm PJSC owns the exclusive rights for 27 brand names. The Company’s product portfolio comprises such well-recognized brands like: Arbidol®, Pentalgin®, Complivit®, Flucostat ®, Aphobazolum®, Codelac®, Amixin®, Acipol®, Maxycold®, Rinostop®, Magnelis® В6, Noopept®, Asvitol®, Askophenum-P®, Next®, Lactazar®, Selmevit ®, Termicon®, Lactonorm®, Ciklovita®, Cinocap®, Univit®, Nitrocor®, Neosmectin®, Klarisens®, Spasmol®, Aerovit®.

In addition to the promotion of its own brands, OTCPharm is engaged in marketing and promotion of third party branded pharmaceutical products: Lactofiltrum®, Filtrum®, Mikrazym®, Dinolak® and Taufon®. These products are complementary to the current product portfolio and allow the Company to gain expertise in the relevant therapeutic categories.

9m 2015 Key Events and Sales Highlights

  • OTCPharm demonstrated 5% increase in sales in 9m2015, or RUB12.5 bn vs RUB11,95 bn in the same period of last year;
  • Sales revenue of Top-10 products of the Company increased by RUB 83 mln. Meanwhile, the structure of Top-10 products slightly changed: Complivit® increased its position from 4th to 5th place, while Aphobazolum® and Flucostat® conceded positions;
  • Sales revenue of Top-15 products of the Company increased by RUB 265 mln., and 10 out of 15 products demonstrated double-digit positive dynamics;
  • The products of Anti-cold and Flu segment demonstrated significant increase in sales 2Q2015 to 3Q2015: Arbidol® (+1,000), Amixin® (+256%), Codelac®(1) (+25%), Maxicold® (+204%).
  • Vitamins (which are interfacing to Anti-cold and Flu segment medicine) also showed a significant positive trend;
  • Sales of vitamins for kids increased significantly 3Q-o-2Q 2015 as a school year began and due to start of national ad campaign on TV. Sales of Univit® for kids (Univit® Kids and Univit® Kids with Omega-3 and choline) increased by 212%, and Complivit® for kids (Complivit® Active, chewing Complivit® Active, Complivit® Calcium D3 and Complivit® Calcium D3 forte) by 54%;
  • Sales of a new product Mycoderil® (INN: "naftifin") started In June 2015, and in July 2015 we issued a cream form of this product.

9m 2015 Market Highlights

  • In 9m2015 Russian pharmaceutical retail market demonstrated 10% growth comparing to the same period of last year and reached RUB530 bn (3.1 bn packs), while OTC segment increased 11% and equaled to RUB 290 bn (2.2 bn packs)
  • The average retail pack price for OTC drug increased by 19% to RUB 130 per pack;
  • Based on the results of 9m2015 OTCPharm maintained leadership in key segments of Russian pharmaceutical market and is #2 company on a Russian OTC market by revenue with a market share of 4.7%;
  • OTCPharm has 2 brands in TOP15 products of the total retail market in Russia – Arbidol® and Pentalgin®, as well as 5 brands in TOP30 local products (Arbidol®, Pentalgin®, Aphobazolum®, Complivit® and Amixin®).

SALES RESULTS

Porfolio Leaders are those products which are actively supported by the marketing team, and which share equaled to 58% of total sales in 9m 2015 (64% in 9m 2014). The following brands fall under this category of sales: Arbidol®, Aphobazolum®, Complivit®, Pentalgin®, Flucostat®. This category decreased 8% in sales in 9m 2015, which is mainly a result of market dynamics in 2015 across all categories of drugs. Despite this, the Company holds leading positions in the respective segments (#1 analgesic and antifungal category, No. 3 in the cough category).

Sales of Arbidol® decreased 12% in 9m 2015 due to low morbidity level in the 2Q2015, which was partly offset by cold and flu period in the 3Q2015. Besides this, Arbidol® revenue growth 3Q-o-2Q 2015 relates to start of sales of new form of Arbidol® - Arbidol® powder for preparation of intake suspension in the 1Q2015 (in addition to Arbidol® Maximum – a new form launched in the 1Q2015). The released form is developed specially for the etiotropic therapy of kids cold and flu. In the reporting period the Company presented interim results of the ARBITRATOR clinical study which confirmed Arbidol’s efficiency in treatment of cold and flu. As of 30 September 2015 Arbidol® continues to be #1 product in our portfolio (16% of total 9m2015 revenue) and #4 product in Anti-cold and Flu segment with 8.2% market share;

Pentalgin®(1) confirmed its absolute leadership in the analgesic category - its market share equaled to 20%. Pentalgin®(1) holds the #2 position in our portfolio by revenue (13% of total 9m2015 revenue or RUB 1,567 mln). However, due to the overall market conditions, Pentalgin®(1) demonstrated 12.7% reduction of sales over the same period last year.

Based on the results of 9m2015, Complivit® sales increased 17% and reached RUB1,160 mln., driving it to the 4th place in our portfolio (9% of total revenue). The launch of the new form of Complivit® (tablet No.30) in July 2015 also positively resulted in total revenue of Complivit® family of products.

Based on the results of 9m2015, Flucostat® confirmed leadership in the category of antifungal drugs by revenue. According to the results of 9m2015 Flucostat® revenue decreased by 12% compared to the same period of the previous year, in line with the overall sales decrease of the market category.

Aphobasolum® – the leader in the tranquilizers/sedatives category, showed 9% decrease in revenue in 9m 2015, mainly due to the decline in consumption of the category in general.

High growth brands – actively promoted smaller brands that constitute 21% of the 9m 2015 revenue (18% in 9m 2014). These brands include Amixin®, Acipol®, Magnelis® B6 and Next®. This category showed significant h-o-h growth of 23% with key drivers being Amixin® and Magnelis® B6. This category demonstrated a significant 20% increase, with Amixin® and Magnelis® B6 being the main drivers of growth.

In 9m 2015 Amixin® sales increased by 15%, due to the begin of cold and flu season in the 3Q2015. Amixin® is the third largest product in our portfolio (9% share based on the results of 9m2015).

Other products in this group also demonstrated positive dynamics in 9m2015: Magnelis® B6 + 40%, Next® + 19%, and Acipol® +21%.

Small brands with growth potential constitute 7% of the total 9m2015 revenue (4% in 9m 2014). Group’s revenue increased by 68% 9m2015 to 9m2014. The largest contribution to the growth of this group was made by Rinostop® (+RUB 226 mln), it is also the undisputed growth leader within the group (+92%). Other products also demonstrated outstanding sales growth: Maxycold® (+30%), Cinocap® (+36%), Cyclovita® (+47%), Lactonorm® (+76%) and Lactazar® (+75%).

Small brands with a stable market share constitute 14% of the total sales in 9m 2015. The largest product in this category by revenue is Codelac®, which demonstrated a significant increase in sales of 24%. A significant contribution to the Group’s revenue made by new products Azitrox® (+RUB 62 mln) and Mycoderil® (+RUB 4 mln), which sales started in the 2Q2015.

Third Party Products showed 14% increase in sales 9m2015 to 9m2014. The growth was achieved primarily due to the increase in sales of Micrazym® (+RUB137 mln or 76%), which is now #4 in the category of due to well-balanced marketing policy, as well as by increasing sales of Taufon® (the leader in the category of eye care) due to the involvement of a new channel of promotion and launch of the new web-site of this product in August 2015.

OTCPharm business sales structure, 9m 2015

9m 2014
Sales
(RUB th)
% of total sales 9m 2015
Sales
(RUB th)
% of total sales 9m 2015/9m 2014 change
(RUB th)
9m 2015/9m 2014 change
(%)
ORGANIC
Amixin®1 018 5108,5%1 171 0769,3%152 56615,0%
Arbidol®2 271 80919,0%2 004 40816,0%-267 402-11,8%
Ascophenum-P®®132 0271,1%151 4461,2%19 42014,7%
Aphobasolum®993 4858,3%903 8757,2%-89 610-9,0%
Acipol®505 3714,2%609 7634,9%104 39220,7%
Azitrox®00,0%61 5290,5%61 529-
Gasrozol®00,0%5 0690,0%5 069-
Codelac®(1)375 1713,1%464 8693,7%89 69823,9%
Complivit®991 4758,3%1 159 7489,3%168 27317,0%
Mycoderil®00,0%44 3850,4%44 385-
Lactasar®19 4580,2%34 0520,3%14 59475,0%
Lactonorm®10 6040,1%18 7030,1%8 09976,4%
Magnelis® B6244 4972,0%343 2492,7%98 75140,4%
Maxycold®109 0670,9%141 5281,1%32 46129,8%
Next®159 3291,3%188 8331,5%29 50418,5%
Neosmectin®68 8310,6%87 8740,7%19 04427,7%
Noopept®92 5510,8%122 3851,0%29 83432,2%
Pentalgin®(1)1 795 78515,0%1 567 36512,5%-228 420-12,7%
Rinostop®246 4922,1%472 3303,8%225 83891,6%
Selmevit®114 8071,0%89 8170,7%-24 990-21,8%
Termicon®130 8311,1%112 4140,9%-18 416-14,1%
Flukostat®655 4315,5%579 1454,6%-76 286-11,6%
Ciclovita®25 9550,2%38 1530,3%12 19847,0%
Cinocap®35 1190,3%47 8720,4%12 75336,3%
Univit®2 3070,0%71 7250,6%69 4183009,2%
Others(2)426 0223,6%303 8292,4%-122 194-28,7%
Total organic10 424 93587%10 795 44486%370 5094%
THIRD PARTY PRODUCTS
Taufon®736 6116,2%789 7026,3%53 0907,2%
Lactofiltrum®467 1733,9%411 8833,3%-55 290-11,8%
Micrazym®179 3641,5%316 4922,5%137 12876,5%
Filtrum®144 0601,2%193 0501,5%48 99034,0%
Dinolac®00,0%23 3640,2%23 3640,0%
Total TPP1 527 20813%1 734 49114%207 28314%
Total11 952 143100%12 529 935100%577 7925%
  1. OTC forms only
  2. Including Asvitol®, Aerovit®, Clarisens®, Nitrocor®, Spasmol® and RX forms of Codelac® and Pentalgin®