OTCPharm reports 1H2016 sales results

Moscow, 09 August, 2016 – OTCPharm PJSC (“OTCPharm” or the “Company”) announces its 1H2016 sales results.

OTCPharm reports revenue growth of 68% in 1H2016 comparing to the same period of the last year and demonstrates one of the highest growth rate among top 10 players in the Russian pharmaceutical market both by value and by volume¹ 1H2016 revenue reached RUB 11.3 bn.

1H2016 Key Events and Sales Highlights

• 68% increase in sales to RUB11.3bn in 1H2016 (vs RUB6.7 bn in 1H2015);
• Sales growth of over RUB1.4bn across the top 15 own brands in 1H2016;
• The top 15 brands structure has not changed significantly: Top-5 ranking was the same as in 1H2015, however 2 new products entered the top 15 group – Univit^® and Mycoderil^® (#8 and 13 respectively);
• All top 15 products showed an increase in sales with an average growth of 66%, out of which 9 products showed double-digit growth and 4 products showed triple-digit growth or more;
• In 1H2016 we have successfully launched two new own brands -  Escape^® (2 SKUs) and Uronorm^®:
  • 1H2016 sales of Escape^® (INN: Bismuth tripotassium dicitrate) amounted to RUB 3.9 mln (sold in two forms - tablets № 112 and №40);
  • 1H2016 sales of Uronorm^® (a food supplement based on an extract of cranberry and vitamin C) amounted to RUB 1.2 mln.
• In 1H2016 we also launched 9 new SKUs to the existing brands: Codelac^® Neo syrup 200 ml; pastilles Complivit^® Active bears, Healthy eyes and FrutoVit; Maxicold^® suspension for kids; Next^® tablets #20;  Rinostop^® Aqua Soft spray 50 ml and Aqua Forte spray 50 ml.
• Roche’s brand Tamiflu^® was added to the TPP (third-party products) portfolio in 1H2016. The Company acquired exclusive rights to distribute Tamiflu in the Russian Federation;
• 1H2016 saw two flu pandemic waves, one in January and the other in March, resulting in increased demand for anti-cold medicines and associated products:
  • Sales of Arbidol^® grew by 58%;
  • The anti-cold category (Amixin^®,  Codelac^®, Rinostop^®, Maxicold^® and Azitrox^®) showed 54% growth;
  • Sales growth during the season in the related category of vitamins and mineral complexes (+ 86%).

1H2016 Market Highlights

• In 1H2016 the Russian pharmaceutical retail market grew by 4%, reaching RUB419 bn (2.3 bn packs), while its OTC segment also expanded by 3% to RUB229 bn (1.7 bn packs);
• The average retail pack price for OTC drugs increased by 4% to RUB 138 per pack;
• OTCPharm is the #1 player in the Russian OTC market by 1H2016 revenue with a market share of 5.7%²;
• The Company maintained its leadership in the key segments of the Russian pharmaceutical market in 1H16;
• Four of OTCPharm’s brands (Arbidol^®, Amixin^®, Pentalgin^® and Complivit^®) are TOP 50 products in the Russian retail OTC market.

Own Brands Sales

Sales of Pentalgin^® increased 42% in 1H2016, reaching RUB1,502 mln. The increase was mainly due to enhanced demand for new non-codeine forms - an increase of 488 million rubles. The product remained to be the leader among analgesic drugs with 20% market share by value and 6% by volume. Pentalgin^® is the best-selling product in our portfolio (13% of 1H2016 revenue).

Sales of Complivit^® rose 60% in 1H2016, to RUB1,087 mln, making it the second-largest product in our portfolio by sales (10% of total revenue). This positive dynamics relates to cold and flu seasons, which are marked by increased demand for vitamins and pain relief drugs, which are adjacent to anti-cold medicines. However, it also relates to the launch of new forms of Complivit^® in 2014 and 2015: Complivit^® Shine sub-brand introduced in 2014, new dosage forms and sub-brands such as Complivit Chondro ^®, Complivit^® tablets No.30 and Complivit^® Calcium D3 for women 45+ introduced in 2015. Sales of the new forms and sub-brands grew by 80% in 1H2016 (contributing 30% to the overall growth of Complivit^® sales). Complivit^® ranks #1 in its category by sales volume (39% share) and #3 by value (19% share).

Arbidol^® sales revenue increased 58% in 1H2016 due to two flu pandemic waves in January and March 2016, reaching RUB950 mln. Besides this, the Company took successful steps to strengthen the positioning of the brand, including the development of Arbidol^® for kids in the form of powder for preparation of oral suspension, and a new form of Arbidol^® in capsules, Arbidol^® Maximum. These sub-brands represented 22% of the total Arbidol^® revenue in 1H2016 and contributed 36% to the overall growth of Arbidol^® sales, or RUB 126 mln. In 1H2016 Arbidol^® was third-largest in the portfolio of won brands  (8% of sales) and was  the second best-selling product in the anti-viral category, with 33% market share by value.

Sales of Amixin^® rose by 64% in 1H2016 , reaching RUB949 mln due to strong demand at the time of the flu epidemic. Amixin^® also became No.2 in its market category with a 16% market share by value.

The Company’s No. 5 product by sales is Aphobasolum^®, which demonstrated 13% sales growth in 1H2016. It is the leading product in its category with 18% market share by value and 3% by volume.

Magnelis^® В6 showed 197% sales growth in 1H2016, or RUB 427 mln.  This relates to the increasing demand for drugs of this category, as well as the beginning of sales of new forms of production in Q4 2015 (Magnelis^® B6 Forte tablets # 30 and # 60), the contribution of which to the total revenue growth was 19%.

Due to extensive promotion by the Company, the brand Acipol^® showed strong sales growth in 1H2016 (+65% or RUB199 mln). Acipol^® moved to the seventh position in our portfolio and became #3 in its category with a market share of 11% by volume and 10% by value.
Mycoderil^®, an antifungal agent with an active ingredient of naftifin, which was launched in 2Q15, became an eighth-largest in our portfolio in 1H2016 with sales of RUB492 mln.

Sales of Rinostop^® expanded by 48% in 1H2016, which is on the one hand due to the cold and flu season and on the other due to the start of sales (in 4Q2015 -1Q2016) new sub-brand Rinostop^® Aqua, as well as successful advertising campaign of this sub-brand in 2Q2016 in the season of pollinosis.

Codelac^® was the number 10 product in the organic portfolio in 1H2016, with sales of RUB359 mln (7% growth to 1H2015). The increase was mainly due to the new form of Codelac^® Neo tablets with modified release, which was introduced in 4Q2014. Codelac^® is #3 in its market category.

Flucostat^® remained the leader in the anti-fungal products category in 1H2016 by sales value (37% share by value in its market category). Revenue from Flucostat^® sales increased by 9% in 1H2016 compared to the same period of previous year.

Sales of Next^® rose by 121% in 1H2016. Next^® became #12 in the organic portfolio by sales and #9 in its market category with 4% market share by value.

Launched in late 2014, Univit^® has been showing steady sales growth ever since. Sales increased by c.332% (or RUB122mln) in 1H2016. Most of this growth was generated by Univit^® for kids (Univit^® Kids and Univit^® Kids with Omega 3 and choline). Univit^® became the #13 brand by sales in the Company’s organic portfolio and #2 in its market category (multivitamins w/o minerals) with a market share of 19% by value.

Maxicold^® sales grew 91% in 1H2016, reaching RUB131 mln, due to increased incidence of flu and acute respiratory disorders during the period.  Maxicold^® is #9 in its market category with a market share of 4% by volume.

Sales of Noopept^® in the reporting period increased by 60% and amounted to RUB 121 mln. The product was ranked 15th in the portfolio of own brands and obtained 3rd place in the category of nootropic drugs with a market share of 14% in value and 16% in volume.

TPP sales

Sales of Taufon^® increased by 16% compared to 1H2015. Taufon^® is the leader in TPP portfolio by sales and is 5th largest brand in the total portfolio. Taufon^® is the absolute leader in its category with the market share of 17% by value and 27% by volume in 1H2016.

Tamiflu^® was added to the portfolio in January 2016. It became # 10 in the Company’s pharmaceutical portfolio in 1H2016 by revenue (RUB418 mln) and #3 in the TPP portfolio.

OTCPharm Sales Breakdown, 1H2016

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 the largest 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 32 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^®,Escape^®, Uronorm^®, Aerovit^®, Spasmol^®.

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