OTCPharm reports 9m2016 sales results

Moscow, 28 October, 2016 – OTCPharm PJSC (“OTCPharm” or the “Company”) announces its 9m2016 sales results.

OTCPharm reports RUB 18.6 bn revenue in 9m2016, growth of 48% comparing to the same period of the last year. According to IMS Health in 8m2016 the Company demonstrated the highest absolute revenue growth rate¹ both by value and by volume (+RUB 3.2 bn and +11.2 mln packs), as well as the highest increase in market share both by value and by volume resulted in Company’s leadership on OTC retail market².

9m2016 Key Events and Sales Highlights

• 9m2016 sales equaled to RUB 18.6 bn vs RUB 12.6 bn in 9m2015;
• Sales growth of over RUB 6 bn (+48% vs 9m2015), where RUB 5 bn relates to organic growth (84% of total growth) and almost RUB 1 bn (16% of total growth) relates to the drugs included to the Company’s portfolio in 2016 (including TPP – third-party products);
• Sales growth of over RUB 4.1 bn across the top 15 own brands in 9m2016;
• The top 15 brands structure changed: Mycoderil^®  and Univit^® entered the top 15 group (#6 and 13 respectively);
• All top 15 products demonstrated an increase in sales, out of which 3 products showed triple-digit or higher growth, others showed double-digit growth;
• In 2Q2016 we have successfully launched two new own brands -  Escape^® (2 SKUs) and Uronorm^®:
  • 9m2016 sales of Escape^® amounted to RUB 9.1 mln;
  • 9m2016 sales of Uronorm^® amounted to RUB 2.8 mln.
• During 9m2016 we also launched 12 new SKUs to the existing brands: Codelac^® Neo syrup 200 ml; various Complivit^® pastilles for kids; Complivit^® tablets Calcium D3 for women 45+;  Complivit^® superenergy with ginseng; Maxicold^® suspension for kids; Next^® tablets #20;  a line of Rinostop^® Aqua sprays;
• Roche’s brand Tamiflu^® was added to the TPP (third-party products) portfolio in the reporting period. The Company acquired exclusive rights to distribute Tamiflu^® in the Russian Federation;
• In the beginning of 2016 an increase in cold and flu diseases occurred. This fact resulted in increased demand for anti-cold medicines and associated products:
  • The anti-cold category (Amixin^®,Codelac^®, Rinostop^®, Maxicold^® and Azitrox^®) showed 44% growth,
  • Sales growth during the season in the related category of vitamins and mineral complexes (+ 68%);
• 3Q2016 was mainly marked with an increase of sales of new brands:  Mycoderil^® (+821% QoQ) and Univit^® (+214% QoQ). Anti-cold and cold-prevention medicines also demonstrated significant growth in the 3Q2016 on the eve of cold season: Amixin^®(+27% QoQ), Maxicold^® (+57% QoQ), Rinostop^® (+43% QoQ).

8m2016 Market Highlights

• In 8m2016 the Russian pharmaceutical retail market grew by 5%, reaching RUB 549 bn (3.1 bn packs), while its OTC segment expanded by 4% to RUB 252 bn (2.2 bn packs);
• The average retail pack price for OTC drugs increased by 5% to RUB 137 per pack;
• OTCPharm is the leader on the Russian OTC market by 8m2016 revenue with a market share of 5.5%³;
• The Company maintained its leadership in the key segments of the Russian pharmaceutical market based on 8m16;
• Five OTCPharm’s brands (Arbidol^®, Amixin^®, Aphobasolum^®, Pentalgin^® and Complivit^®) are in TOP 50 products of the Russian retail OTC market.

Own Brands Sales

Arbidol^® sales revenue increased 12% in 9m2016, reaching RUB 2,250 mln due to the increase in cold and flu diseases in the 1Q2016. Besides this, the Company took successful steps to strengthen the positioning of the brand, including the development and launch of Arbidol^® for kids in the form of powder for preparation of oral suspension, and Arbidol^® Maximum - a form of Arbidol^® which contains 200 gr of Umifenovirum. These sub-brands represented 15% of the total Arbidol^® revenue in 9m2016 and contributed 78% to the overall growth of Arbidol^® sales, or RUB 182 mln. In 8m2016 Arbidol^® was the largest in our portfolio (12% of sales) and was  the second best-selling product in the anti-viral category, with 33% market share by value.

Sales of Pentalgin^® increased 22% in 9m2016, reaching RUB 2,128 mln - #2 in our portfolio, 11% of total sales. The increase was mainly due to enhanced demand for non-codeine forms - an increase of RUB 366 mln. The product remained to be the leader among analgesic drugs with 20% market share by value and 6% by volume.

Sales of Amixin^® rose by 45% in 9m2016 , reaching RUB 1,704 mln due to strong demand at the time of the flu epidemic, as well as to strong demand in September 2016 on the eve of cold season. Besides this, the registration status of pediatric form of issue of Amixin^® (tablets 60 mg) changed since 30 June 2016 and this form became available for OTC market, which also influenced on Amixin^® sales grows. Amixin^® became No.3 in its market category with an 18% market share by value.

Sales of Complivit^® rose 35% in 9m2016, to RUB1,577 mln, making it the fourth-largest product in our portfolio by sales (8.5% of total 9m2016 revenue). This positive dynamics relates to enhanced demand for vitamins during seasonal cold and flu periods. It also relates to the launch of new forms of Complivit^® introduced in 2015: Complivit^® pastilles for kids (Active bears, Healthy eyes and FrutoVit); Complivit^® Calcium D3 for women 45+; Complivit^® superenergy with ginseng. Sales of the new forms equaled to RUB 50 mln and contributed 12% to the overall growth of Complivit^® sales. Based on 8m2016, Complivit^® ranked #1 in its category by sales volume (38% share) and #3 by value (18% share).

The Company’s No. 5 product by sales is Aphobasolum^®, which demonstrated 31% sales growth in 9m2016. It is the leading product in its category with 18% market share by value and 3% by volume.

Mycoderil^®, an antifungal agent, became six-largest in our portfolio in 9m2016 with sales of RUB 834 mln. The brand was launched in 2Q15 with two forms of issue of the solution: 10 and 20 mg. In the 3Q2015, we also launched cream form of Mycoderil^®.  Based on 8m2016, Mycoderil ^® entered top-3 brands  in its category by sales with 9% share by value and 5% share by volume.

Magnelis^® В6 showed 139% sales growth in 9m2016, or RUB 480 mln.  This relates to the beginning of sales of new forms of production in Q4 2015 (Magnelis^® B6 Forte tablets # 30 and # 60). Based on 9m.2016 results Magnelis^® rose from 10 to 7 place in the portfolio of own brands, and according to the 8m.2016 was 2nd largest in its market category with a market share of 12% in value terms.

Due to extensive promotion by the Company, the brand Acipol^® showed strong sales growth in 9m2016 (+19% or RUB 116 mln). Acipol^® moved to the eights position in our portfolio and became #3 in its category with a market share of 10% by volume and by value.

Sales of Rinostop^® expanded by 46% in 9m2016, which is on the one hand due to the seasonal demand and on the other due to the start of sales (in 4Q2015 -1Q2016) new sub-brand Rinostop^® Aqua (6 SKUs), as well as successful advertising campaign of this sub-brand in 3Q2016 in the season of pollinosis.

Revenue from Flucostat^® sales increased by 10% in 9m2016 and equaled to RUB 638 mln. Flucostat^® remained the leader in the anti-fungal products category in 9m2016 by sales (36% share by value and 15% by volume in its market category).

Codelac^® was the number 11 product in the organic portfolio in 9m2016, with sales of RUB 567 mln (12% growth to 9m2015). The increase was mainly due to Codelac^® Neo tablets with modified release, which were introduced in 4Q2014 and Codelac^® Neo syrup. Codelac^® is #4 in its market category with 7% market share both in values and volume terms.

Sales of Next^® rose by 75% in 9m2016 mainly due to the start of sales of new Next^® tablets №20 in 1Q2016. Next^® became #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.275% (or RUB197mln) in 9m2016. Most of this growth (76%) 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 #3 in its market category (multivitamins w/o minerals) with a market share of 17.5% by value.

Maxicold^® sales grew 74% in 9m2016, reaching RUB147 mln, due to increased incidence of flu and acute respiratory disorders during the period as well as increased demand for the prevention of colds in September 2016, especially in the form of spray Maxicold^® Lor. Spray Maxicold^® Lor has provided more than 30% growth in the line of Maxicold^®.  Based on 8m2016 Maxicold^® was #9 in its market category with a market share of 3% by value and 3.5% by volume.

Sales of the drug Ascophenum-P^®in the reporting period increased by 24% and amounted to RUB 189 mln. The drug was ranked 15th in the portfolio of own brands as well as 12th place in its market category with a market share of 2% in value and 3% in volume terms.

TPP sales

Sales of Taufon^® increased by 36% compared to 9m2015. Taufon^® is the leader in TPP portfolio by sales and is 6th largest brand in the total portfolio. Taufon^® is the absolute leader in its category with the market share of 21% by value and 27% by volume in 8m2016.

Tamiflu^® was added to the portfolio in January 2016. It became # 9 in the Company’s pharmaceutical portfolio in 9m2016 by revenue (RUB 799 mln) and #3 in the TPP portfolio.  These sales results were achieved due to the demand for antiviral medications during the seasonal epidemic rise.

Based on 9m2016 Lactofiltrum^® sales amounted to RUB 617 million, which is 49% more than in the same period last year. Based on 8m2016 Lactofiltrum^® became 4th largest in its market category in terms of sales with a market share of 14% in value terms.

 

OTCPharm Sales Breakdown, 9m2016

	9m2015 (‘000 RUB)	% of total sales	9m2016 (‘000 RUB)	% of total sales	Change (‘000 RUB)	Change (%)
OWN BRANDS
Arbidol®	2 017 889	16,0%	2 250 458	12,1%	232 569	11,5%
Pentalgin®	1 748 241	13,9%	2 127 854	11,5%	379 613	21,7%
Amixin®	1 174 538	9,3%	1 704 441	9,2%	529 903	45,1%
Complivit®	1 164 452	9,3%	1 576 672	8,5%	412 219	35,4%
Aphobasolum®	908 847	7,2%	1 186 729	6,4%	277 881	30,6%
Mycoderil®	44 385	0,4%	878 585	4,7%	834 200	1879,5%
Magnelis®	344 414	2,7%	824 098	4,4%	479 684	139,3%
Acipol®	612 588	4,9%	730 573	3,9%	117 985	19,3%
Rinostop®	473 103	3,8%	690 576	3,7%	217 472	46,0%
Flucostat®	579 760	4,6%	638 241	3,4%	58 481	10,1%
Codelac®	506 597	4,0%	566 732	3,1%	60 135	11,9%
Next®	189 784	1,5%	332 218	1,8%	142 434	75,1%
Univit®	71 725	0,6%	268 644	1,4%	196 919	274,5%
Maxicold®	142 204	1,1%	246 970	1,3%	104 765	73,7%
Ascophenum-P®	152 161	1,2%	189 157	1,0%	36 996	24,3%
Others(1)	710 531	5,6%	1 089 845	5,9%	379 314	53,4%
Total organic	10 841 220	86,2%	15 301 792	82,4%	4 460 571	41,1%
THIRD PARTY PRODUCTS
Taufon®	790 618	6,3%	1 075 956	5,8%	285 337	36,1%
Tamiflu®	0	0,0%	799 059	4,3%	799 059	-
Lactofiltrum®	414 354	3,3%	616 655	3,3%	202 300	48,8%
Micrazym®	317 055	2,5%	493 566	2,7%	176 511	55,7%
Filtrum®-STI	193 504	1,5%	254 833	1,4%	61 329	31,7%
Dinolak®	23 364	0,2%	25 282	0,1%	1 918	8,2%
Total TPP:	1 738 895	13,8%	3 265 351	17,6%	1 526 455	87,8%
Total:	12 580 116	100,0%	18 567 142	100,0%	5 987 026	47,6%

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.