OTCPharm OJSC reports FY2015 sales results

Moscow, February 09, 2016 – OTCPharm PJSC (the Company) announces its FY2015 sales results.

In 2015 OTCPharm demonstrated 7% revenue growth to RUB 17.8 bln and was the only one company among top-10 in Russian pharmaceutical OTC market, which increased its market share both in value and volume terms. This underlines adherence of the Company’s strategy - future development through sustainable revenue growth.

FY2015 Key Events and Sales Highlights

• 7% increase in sales to RUB 17.8 bn in 2015 (RUB16.6 bn in 2014);
• 12% increase in sales to RUB 5.3 bn in 4Q2015 (RUB4.7 bn in 4Q2014);
• Sales revenue of Top-10 products³ of the Company³ increased by RUB 270 mln. Meanwhile, the structure of Top-10 products slightly changed: Amixin^® increased its position from 4^th to 5^th place and Codelac^®3 from 8^th to 7^th place, while Aphobazolum^® and Flucostat^® conceded positions, from 4^th to 5^th place and from 6^th to 8^th place respectively;
• 11 out of top-15 products showed positive sales dynamics with an average growth rate of 58% to 2014. 8 out of these 15 products demonstrated double-digit positive dynamics, while Univit^® showed even three-digit dynamics. Sales revenue of Top-15 products of the Company increased by RUB 612 mln;
• An increase in sales of 311% shifted Univit^® to the group of top-15 products of the Company. The increase was a result of proactive TV and internet ad campaign. Vitamins Univit^® for kids (Univit^® Kids and Univit^® Kids with Omega-3 and choline) contributed RUB 116 mln (7 times growth) to the Univit^® family products revenue growth.
• In 2015 we have successfully launched a new brand Mycoderil^® (3 SKUs) and 13 new SKUs to the existing brands:
  • Mycoderil^® - an antifungal agent with an active ingredient of naftifin- was launched In June 2015. Mycoderil^® sales for the FY2015 reached RUB 104 mln., and Mycoderil^® joined Top-15 products in its market category with the market share of 1.5%⁴;
  • In June 2015 the Company started sales of the new sub-brand in the Сomplivit^® product family – Complivit Chondro^® and in December 2015 of the new sub-brand Сomplivit^® Calcium D3 for women 45+;
  • In the 3Q2015 we launched a new form of Arbidol^® - Arbidol^® powder for preparation of intake suspension;
  • In the 4Q2015 we launched 4 new SKUs of Rinostop^®.
• In 2015 vitamins showed a significant sales increase (Сomplivit^® +20%, Univit^® + 311%, Magnelis^® B6 + 55%), while the products of Anti-cold and Flu segment demonstrated decrease in sales.

FY2015 Market Highlights

• In 2015 Russian pharmaceutical retail market demonstrated 8% growth and reached RUB728 bn (4.2 bn packs), while its OTC segment increased 8% and equaled to RUB 400 bn (3.0 bn packs);
• The average retail pack price for OTC drugs increased by 17% to RUB 132 per pack;
• Based on the results of 2015 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 4.8%;
• In 2015 OTCPharm was the only one company among top-10 in Russian pharmaceutical retail market, which increased its share both in volume and value terms;
• OTCPharm has 2 brands in TOP15 products of the total retail market in Russia – Arbidol^® and Pentalgin^®, as well as 4 brands in TOP50 local products (Arbidol^®, Pentalgin^®, Aphobazolum^® and Complivit^®).

SALES RESULTS

 Porfolio Leaders are those products which are actively supported by the marketing team, and which share equaled to 47% of total sales in 2015 (55% in 2014). The following brands fall under this group: Arbidol^®, Aphobazolum^®, Complivit^®, Pentalgin^®, Flucostat^®. All brands of this Group are included in top-10 brands of the Company. This category decreased 7% in sales in 2015, which is mainly a result of market dynamics in 2015 across respective categories of drugs, except category of vitamins. Despite this, the Company holds leading positions in the respective categories (No 1 in analgesic and antifungal categories, No. 2 in the cough category, No 3 in the category of polyvitamins).

Sales of Arbidol^® decreased by 22% in 2015 due to the low cold and fly morbidity level in the 2 half of 2015 and the increasing competitive clutter. Recently the Company undertook several successful steps of further promotion of the brand, i.e. development of new sub-brands: Arbidol^® powder for preparation of intake suspension (for kids), and Arbidol^® Maximum. The released sub-brands contributed 10% to the total revenue of Arbidol^® family. Numerous clinical studies confirmed therapeutic and prophylactic efficiency of Arbidol^® against different human strains of flu and cold. In 2015 the Company presented interim results of the ARBITRATOR clinical study which confirmed Arbidol’s efficiency in treatment of flu. As of 31 December 2015 Arbidol^® has continued to be No 1 product in our portfolio (13% of total 2015 revenue) and No 2 product in cough category with 40% market share.

Due to the overall market conditions Pentalgin^®3 demonstrated 7% reduction of sales over last year. However,Pentalgin^®3 confirmed its absolute leadership in the analgesic category - its market share in volume terms equaled to 5.8% (8% in 2014), and over 20% in value terms. Pentalgin^®3 holds the #2 position in our portfolio by revenue (13% of total 2015 revenue or RUB 2,484 mln).

In 2015 Complivit^® sales increased 20% and reached RUB 1,834 mln., driving it to the 3^rd place in our portfolio (10% of total revenue). The sub-brand Complivit^® Shine, which was launched in 2014, contributed over 30% to the total growth of Complivit^® family sales. In 2015 we also launched new forms of Complivit^®: inJune the Company started sales of the new sub-brand – Complivit Chondro^®, in July we launched new form of tablets - tablet No.30, and in December 2015 the new sub-brand Сomplivit^® Calcium D3 for women 45+ was launched . The new forms contributed 13% in total revenue growth of Complivit^® family of products. Complivit^® holds 1^st place in its market category in volume terms (37% market share, 7% y-o-y growth in share) and 3^rd place in value terms (18% market share, 8% y-o-y growth in share).

In 2015 Flucostat^® confirmed leadership in the category of antifungal drugs by revenue. According to the results of 2015 Flucostat^® revenue decreased by 10% compared to previous year, in line with the overall sales decrease of the market category.

Aphobasolum^® – showed 5% decrease in revenue in 2015. However, it was the leader in the tranquilizers/sedatives category and holds No1 position in this category with 37% market share in value terms and 3% in volume terms.

High growth brands –actively promoted growing brands which constitute 26% of total 2015 revenue (22% in 2014). This group include Amixin^®, Acipol^®, Codelac^®3, Magnelis^® B6, Rinostop^® and Next^®. All brands of this Group are included in top-15 brands of the Company. This group showed significant y-o-y growth of 27% with key drivers being Rinostop^®, Magnelis^® B6 and Codelac^®3.

In 2015 Amixin^® sales increased by 8% and reached 1,453 mln (over 30% of the “High growth brands” Group revenue) due to the strong demand on this product. Amixin^® is the fourth largest product in our portfolio (8% share in 2015) and 3^rd largest in its market category with 16% market share in value terms (6%  y-o-y increase in share).

Acipol^® - is the second largest product in this group by revenue. Due to the stable growth in sales in 2015 (+13% or RUB 99 mln) Acipol^® moved from 7^th to 6^th place in our portfolio, as well as now holds 4^th place in its market category with the market share of 8% in value terms and 9% in volume terms.

Based on the results of 2015 Codelac^®3 entered 7^th place in our portfolio with the revenue of RUB 790 mln. (an increase of 35% y-o-y), as well as entered top-5 in its market category (was 7th in 2014) with the market share of 6% both in value and volume terms. The positive revenue dynamics was achieved due to the new communication campaign, as well as to the launch of new sub-brand Codelac^® Pulmo in the 1Q2015 and new SKU of Codelac^®Neo in the 4Q2014 (these new forms contributed 27% to the total increase in sales of Codelac^®3 family.

Magnelis^® B6 was one of the growth drivers in the group “High growth brands” (+ RUB 197 mln) in 2015, which is related to the strong demand on vitamins in 2015.

In 2015 revenue from sales of Rinostop^® increased by 84%, and Rinostop^® made the largest contribution to the Group growth (+RUB 333 mln). It also entered top-10 in its market category with the market share of 4% in value terms and 9% in volume terms.

In 2015 revenue from sales of Next^® increased by 26%, it entered to the 6^th place in its market category with the market share of 3% in value terms.

Small brands with growth potential (Cinocap^®, Cyclovita^®, Lactazar^®, Lactonorm^®, Maxycold^®, Mycoderil^®, Neosmectin^®, Noopept^® and Univit^®) constitute 6% of the total 2015 revenue (4% in 2014). Group’s revenue increased by 80% y-o-y. The largest contributor to the growth of this group was Univit^® (+RUB 129 mln), other products also demonstrated double-digit positive dynamics.

Third Party Products showed 19% y-o-y increase in sales in 2015. The growth was achieved primarily due to the increase in sales of Micrazym^® (+RUB227 mln or 77%), which is now No 5 in its category (market share of 5% in value terms and 3% in volume terms, 80% y-o-y growth in shares), as well as due to growth  sales of Taufon^® of 21% y-o-y (Taufon^® is the leader in the category of eye care with the market share of more than 20% in 2015).

OTCPharm business sales structure in 2015

Company profile

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 28⁵ 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^®, Azitrox^®, Gastrozol^®, Mycoderil^®.

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.