ANAYLYST BRIEFING – JAN-JUNE2018 PERFORMANCE
Why Invest in AGP Limited First Top Brands (Ceclor, Exclusive Partnership Part of OBS Group, the Pharmaceutical Rigix, Osnate) to with Mylan – 10 th largest sector OFS in Pakistan contribute USD 10mn World’s 2 nd largest pharmaceutical group after a gap of 22 years each to Revenue in the generic drug in Pakistan enhancing Sector free- manufacturer next 3 years float by 19% The Sponsors have a 5 New product vision to make OBS Highest Gross/Net Targeting a healthy Targeting launch of Group Pakistan’s launches in CY16 and 8 Margins of 55%/24% Sales growth of 19% / 6 new products largest pharmaceutical new launches in CY17 compared to the annum for the next 5 every year going group through organic 7 new products industry average of years forward growth and strategic 43%/14% launched till Jul-18 acquisition Entered There is also a Distribution agreement Launch of Breast-Cancer Drug registration nutraceuticals possibility of with drug - Hetraz of Mylan in for export to Sri segment in 2016 and partnering with other Largest distributor in Jul-18. Intention to Lanka, Kenya and launch more products in foreign companies to now setting-up a of Pakistan – Tajikistan is underway oncology segment new plant introduce their Muller & Phipps branded products Pakistan’s per capita Shariah-Compliant Renowned Partnerships with pharma spending at shareholders, including Company with strong Fortune 500 only USD 15/annum USAID, Muller & governance - E&Y as Pharmaceutical compared to regional Phipps and Banks Company Auditors companies average of USD 35/annum 2
OBS Group Acquisitions & Partnerships 2006 • Dedicated for Organon legacy products OBS Healthcare • Formerly a subsidiary of NV Organon, the Netherlands 2007 • Incorporation of OBS Pharma (Pvt.) Ltd, a sister concern focusing on branded generic and OBS Pharma consumer health products 2008 • Dedicated for MSD legacy products OBS Pakistan • Formerly a subsidiary of Merck & Co. Inc. USA 2009 • A strategic alliance with Merck & Co. Inc. USA to acquire part of their portfolio for Sri Lanka Sri Lanka Operations 2010 • Dedicated for Schering Plough legacy products Schering Plough Pakistan • Formerly a subsidiary of Schering Plough USA 2014 • Acquisition of AGP (Pvt.) Limited and AGP Healthcare (Pvt.) Limited through an SPV (Appollo Limited) AGP • The three companies were subsequently merged in 2015 and renamed AGP Limited 2015 • Acquisition of Janssen Brands and Johnson & Johnson Pakistan Facility in June 2015 Aspin Pharma 2015 • A strategic alliance with Mylan USA to promote their complete portfolio in Pakistan • Launched in April 2016 Mylan 2016 • A strategic alliance with Santen (a global ophthalmic company) to represent them in Pakistan Santen Pharma, Japan 2017 • A strategic alliance with Vifor Pharma for launch of their drugs in Pakistan Vifor 2018 • AGP was listed on PSX in Mar-18 Listing on PSX 3
AGP Limited Revenue Growth (PKR mn) AGP limited (“ AGPL ”) comprises of two plants, which previously operated as two separate companies namely AGP (Private) Limited 5,000.00 (“AGPPL”) and AGP HealthCare (Private) Limited (“AGPHC”) . 4,000.00 These companies were acquired by a consortium led by OBS Pakistan (Private) Limited through an SPV namely Appollo Pharma 3,000.00 Limited (“APL”) in July 2014. 2,000.00 AGPPL and AGPHC were merged with and into APL in December 2015 and APL was subsequently renamed to AGP Limited. 1,000.00 AGPPL was originally Pakistan Vitamin Products (Private) Limited - (“PVPPL”) which was incorporated on December 12, 1957. The 2014 2015 2016 2017 1H 2018 company was initially engaged in the manufacturing of multi vitamins and started its pharmaceutical manufacturing business in Jan-Jun Sales Jul-Dec Sales 1989. The name of the company was subsequently changed to Ali Gohar Pharmaceutical (Private) Limited on September 2, 1991 and Business Units was later changed to AGP (Private) Limited on January 2, 2003. AGPHC was originally incorporated as Sima Laboratories Limited on GYNAE A Gynae / Orthopedic / Antibiotic Products January 15, 1951 and was subsequently renamed to Eli Lilly Gohar (Private) Limited on February 10, 1986. The company was later Gynae / Pain management / Complimenting GYNAE B renamed to AGP Healthcare (Private) Limited on February 23, 2012. Drugs PAEDS Antibiotics for children/Anti-asthmatic INTERNAL MEDICINE A General GP/ Gastro – Enterology Products 22.3% 23.6% 23.2% INTERNAL MEDICINE B Broad-Spectrum Antibiotics & Antiallergens Hepatitis treatment (Mylan USA licensed ANTI VIRAL products) Net Profit Return on Revenue Growth Margin Equity 4
AGP Limited Key Highlights of AGPL’s Performance Post Acquisition AGPL has grown steadily through manufacturing and marketing of • products under licensing arrangements with many companies of Revenue has increased from PKR 3.1bn, the year before international repute and simultaneously through manufacturing acquisition, to PKR 4.7bn in 2017, showing a solid growth of over and marketing its own brands. 51%. AGP revenue has grown by 22% in 1H2018 to 2.87bn • Today, it is amongst the largest pharmaceutical companies in Launched 8 new products in 2017, and 7 new products YTD Jan- Pakistan, providing a broad range of pharmaceutical services. Jul 2018. • The product portfolio of AGPL is a blend of its own range of Formed a strategic partnership with Mylan (USA), one of the branded generics and products licensed from principals of world’s largest generic drug manufacturers international repute. It has exclusive licensing agreements/ supply • Commenced sales of Hepatitis-C drugs A breast cancer drug, arrangements with multiple foreign partners. Hertraz, launched in July 2018 with a new dedicated oncology The operations of AGPL include manufacturing, marketing and sales team of pharmaceuticals and healthcare products in the domestic and export market. Entity Rating The delivery of AGPL’s products, across the country, is managed by Muller & Phipps, one of the largest and state of art pharmaceutical Entity Rating: distribution setups in Pakistan. Long-Term A Short-Term A1 Sharia Compliance Outlook Stable Meezan Bank Limited have reviewed the “The ratings reflect AGPL's strong business fundamentals. The accounts of AGPL and found them to be in pharmaceutical industry has witnessed a higher rate of sustained compliance with Karachi Meezan Islamic growth over the years. While product pricing has been a challenge, the Index – 30 Criteria set out by Pakistan new CPI-linked pricing criteria has allowed an increase in prices with Stock Exchange respect to inflation, indicating a positive sign. At the same time, AGP's core profitability is strong; any downward revision in margins must remain range-bound. ” Extract from PACRA’s Rating Report dated May 2018 5
Product Portfolio Anti-inflammatory Antiallergics Calcium preparation Antispasmodics Antiviral Antibiotics Antispasmodics Bile therapy & Iron Antibiotics Antiobesity enzyme cholagogue Preparation Expectorant Antimalarial Nutritional Antibiotics Antibiotics Antibiotics Venotropic agent Antidiabetic Antidiabetic Antidepressant Urinary antispasmodics supplement for urinary tract Antifibrinolytic Antibiotics Antiasthmatics Narcotic Anti-Gout Vitamin D Tonic NSAIDS NSAIDS Antihaemorrhoidals Vitamin B12 analgesic Plain Antidiabetic Medical food Calcium preparation Antihaemorrhoidals Antiasthmatics Antidiabetic Muscle relaxant NSAIDS Non-narcotic analgesics supplement Antidiarrheal Iron Antidiabetic Muscle Anti-infective Proton pump Iron preparations Antibiotics Antispasmodics Antiviral Supplement Preparation relaxants Antidiarrheal inhibitor 6
Overview of Core Products AGPL’s Portfolio consists of over Top Products by Revenue (2017) 8 new products launched in 55 different products including 2017 Spasler P Navidoxine Rubifer 8 star products 5% 3% 3% Keflex Top 10 products account for 5% Rigix Chymoral 7 new launches in CY18 with 77% sales and 78% of GPM 22% Forte addition of 2 specialized teams and 82% of operating profit 6% MyHep Ceclor Product Jan-June2018 Sales (in '000s) Anafortan 7% 21% 11% Osnate / Ceclor 431,586 Osnate-D Rigix 397,350 17% Osnate / Osnate-D 352,605 MyHep 229,267 Anafortan 198,401 Top Products by Revenue (1 st Half 2018) MyDekla 191,401 Rubi Keflex Chymoral Spasler 138,082 3% 4% 5% Spasler Chymoral 102,606 6% Ceclor 20% MyDekla Keflex 95,681 9% Rubi Range 67,808 Rigix 2,204,787 18% Osnate / Anafortan MyHep AGPL has an aggressive product launch planned in Osnate-D 9% 10% Oncology and Anti-viral products from Mylan. Branded 16% generics in Gynae, Anti-infectives, Gastroenterology and Nutraceutical products are also in the pipeline. 7
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