AGP Pharma to launch 12 new products

Karachi, April 07, 2022: AGP Pharma Limited (AGP) plans to launch 12 new products in the next 1-2 years targeting a growth of more than 22.5 percent.

The AGP management has launched 26 new products over the past 5 years. The company held its corporate briefing session on Thursday to discuss the outlook of the company and sector.

AGP posted a consolidated PAT of Rs 1,846 million (EPS Rs6.24) during CY21, showing a growth of 16.3 percent compared to the SPLY. The company also declared a cash dividend of Rs2.5/share for the year.

Net sales of the company increased to Rs9,317 million during CY21 as against Rs6,946 million during SPLY (up by 34 percent) largely driven by the acquisition of the Sandoz portfolio and encouraging growth in the sales of Rigix, Osnate, Spasler P, Urso, and Navidoxine.

Sales contribution from Rigix/Osnate clocked in at Rs 1.6 billion/1.1 billion while the contribution from the top 5 products together accounted for 61 percent of total sales.

Contribution from the Sandoz portfolio clocked in at Rs1.9 billion for the year with a gross profit of Rs0.9 billion in its 5 months of operations where Azomax remained the top seller from the Sandoz portfolio accounting for 69 percent of total sales.

The non-essential/essential mix for the company’s products is 80 percent/20 percent while for the Sandoz portfolio is 60 percent/40 percent.

Gross margins of the company took a hit on a YoY basis owing to higher raw material costs, dropping from 55.58 percent during CY20 to 54.25 percent during CY21. The management, however, pointed out that the impact of last year’s CPI had only started to be passed on since Nov 2021 onwards.

Growth in the Pharmaceutical industry clocked in at 22.5 percent (5-year CAGR 15.6 percent) for CY21 which was mainly driven by molecules used for COVID-19 management, chronic ailments treatment, and infant milk.

Discussing the business outlook, management pointed out that PKR devaluation and rising freight costs have been a challenge for the company as the import of APIs accounts for 50-60 percent of total costs.

Furthermore, since the management carries 3-5 months of total inventory, the impact of the rising cost will pressurize company margins moving forward which is expected to be offset by the CPI-linked price increase and a shift from dependence on US$ to the Chinese Yuan.

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