• Tuesday, May 28, 2024
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Drugmakers handed profit boost as healthcare demand rises amid pandemic


Listed pharmaceutical companies recorded a significant boost in profits and revenues for the period ended 30th June as increase in the demand for prescription drugs and other medical interventions rose on heightened health-consciousness amid the COVID-19 pandemic.

Analysis of recently released results of three drug makers show that revenue jumped 14percent cumulatively for the period ended June 2020 while profits ballooned 96percent within the period.

In the three months between April and June, Fidson, makers of Astymin, printed a 16.17percent jump in revenue at N4.45billion from N3.83billion recorded in the same period in 2019. Net Profit for the period under review surged 166percent at N348.68million from N131.04million in the same period in 2019.

Fidson’s revenue for the first six months of the year increased 11.31percent, to record the highest half-year revenue in the last five years tracked by BusinessDay, at N8.2billion from N7.37billion in half year 2019, with net profit skyrocketing by 81.43percent to hit N500.64million from N275.94million in same period in 2019.

Neimeth Pharmaceuticals nine months results for the period ended 30th June show revenue increased 42.12percent from N1.41billion in third quarter 2019 to N2 billion in 2020, with net profit standing at N237.63million from 31.07million. Also, within April-June, which is Neimeth’s third quarter revenue increased 93.94percent to N840.87million from N434.59million in the same period in 2019. Net Profit within the three months ballooned by 606.32percent at N181.03million from N25.63million in 2019.

May & Baker revenue in April-June increased slightly 2.57% to N2.24billion from N2.18million, net profit increased 151.91percent to N396.09million from N157.24million. Six months revenue increased 11.31% to N8.2billion from N7.37billion, net profit also increased N50.9percent to N438.89million from N290.83million.

In the heat of the pandemic, the National Agency for Food Drug Administration and Control (NAFDAC) ordered the local manufacturing of Chloroquine for emergency stock for possible clinical trial treatment of coronavirus in the country.

Interestingly while the pandemic slowed down activities in major sectors of the economy, drug makers have the pandemic to thank for putting them back on the path of profitability.

The huge deficit of local medical supplies and pharmaceutical products meant investment opportunities for the sector players, also substantial amount of intervention by the Central Bank of Nigeria to healthcare companies as part of stimulus package to manage the health crisis, which included access to a N100bn fund, as well as lower borrowing rates, came as a boost to most companies in that sector thereby raising investor’s appetite in their stocks.

In an industry laden with several landmines, the last few years have been a challenging period for drug-makers in Nigeria. Some have shut down their operations, others lucky to be alive are still struggling to stay afloat in a challenging macro-economic environment, scarcity of foreign exchange to import raw materials as most players still depend largely on imports to access raw materials and cash strapped consumers.

Drug-makers have also battled the effect of drug smuggling through the nation’s porous border posts, while drug faking and adulterated medicines continue to thrive in quack medicine kiosks and roadside medicine shops.

Shares of Fidson and May & Baker have gained double-digit year to date while Niemeth gained over 180percent year-to-date.