Press Releases | ��ֳ� Pharmacare

��ֳ� delivers strong results and advances its strategic ambitions

Shauneen Beukes — Mon, 03 Mar 2025 10:32:42 +0000

Johannesburg – JSE-listed ��ֳ� Pharmacare Holdings Limited (APN), a global multinational specialty pharmaceutical company, has reported positive unaudited interim Group financial results for the six months ended 31 December 2024.

Stephen Saad, ��ֳ� Group Chief Executive said, “We’re pleased to have delivered positive results operationally while also executing on and advancing our strategic ambitions. The Group has delivered double digit constant exchange rate (“CER) growth in revenue and normalised EBITDA in Commercial Pharmaceuticals coupled with strong growth in FDF Manufacturing supported by the growing contribution from sterile manufacturing contracts. Significant progress has been made in the Group’s GPL-1 initiatives which will materially benefit both Commercial Pharmaceuticals and Manufacturing into the future.”

GROUP FINANCIAL HIGHLIGHTS AND ACHIEVEMENTS

Robust CER growth in normalised EBITDA of 21% and normalised headline earnings per share of 17% underpinned by strong performances in both Commercial Pharmaceuticals and Manufacturing;
However, the strength of the ZAR against all of ��ֳ�’s trading currencies over the period significantly diluted reported performance compared to the underlying CER performance;
Commercial Pharmaceuticals delivered CER growth of 13% in revenue and normalised EBITDA;
Normalised EBITDA in the Manufacturing segment more than doubled, driven by an increased contribution from sterile contract manufacturing;
Lilly’s Tirzepatide based product, branded as Mounjaro, was successfully launched in South Africa and will be a key contributor supporting growth in the Africa Middle East region;
Successful integration of the products acquired in Latin America boosted revenue growth;
Significant progress has been made in respect of the GLP-1 initiatives, representing a material opportunity for both Commercial Pharmaceuticals and Manufacturing; and
Earnings growth has been reduced by a rise in the effective tax rate, primarily due to South Africa’s implementation of the Organisation for Economic Co-Operation and Development rules on a global minimum tax rate of 15% (“BEPS Pillar 2”).

^{1��}The Group assesses its operational performance using constant exchange rates (“CER”). The table above compares performance to the prior comparable period at reported exchange rates and at CER.
² �� The CER percentage change is based upon the performance for the six months ended 31 December 2023 recalculated using the average exchange rates for the six months ended 31 December 2024.
³ �� Operating profit before depreciation and amortisation adjusted for specific non-trading items as defined in the Group’s accounting policy.
⁴ �� Normalised headline earnings per share (“NHEPS”) is headline earnings per share (“HEPS”) adjusted for specific non-trading items as defined in the Group’s accounting policy. ��

GROUP PERFORMANCE
The Group has delivered positive half year results thanks to strong performances across all segments of the business. Group revenue for the six months ended 31 December 2024 grew 4% (9% CER) with gross profit rising well ahead of revenue at 12% (20% CER), influenced by a higher proportion of sales in Commercial Pharmaceuticals and improved profitability in Manufacturing. Normalised EBITDA was up 12% (21% CER) to R5��823 million mirrored closely by operating profit which rose 11% (23% CER).

Normalised net financing costs of R681 million increased by 20%, impacted by the carry-over effect of higher relative interest rates and increased net debt levels. Higher tax expenses, impacted by regional profit mix and the recent introduction of BEPS Pillar 2 in South Africa, diluted NHEPS growth to 5% (17% CER) with NHEPS of 724 cents. HEPS grew by 4% (16% CER) and earnings per share ended 3% higher (17% CER), affected by higher restructuring costs and intangible asset impairments respectively.

Higher working capital investment in Manufacturing inventory, largely seasonal, weighed on H1 2025 operating cash flows. The higher inventory investment has reduced the operating cash conversion rate to 63% (H1 2024: 89%). Net debt has increased from R26,9 billion to R30,0 billion in the six months to December 2024 with the leverage ratio of 2,5x remaining comfortably within the Group’s targeted range.

SEGMENTAL PERFORMANCE
Commercial Pharmaceuticals
Solid revenue growth of 7% (13% CER) to R16��102 million was augmented by the product portfolio acquisition in Latin America and supported by underlying organic CER growth in all three segments. Gross profit margins remained robust at 59,1% (H1 2024: 59,8%). Normalised EBITDA was up 13% in CER and well aligned to the revenue growth, despite absorbing proportionately higher operating expenses in the business acquired from Sandoz in China.

Prescription
Prescription Brands, the largest segment within Commercial Pharmaceuticals, enjoyed double digit growth of 19% (25% CER), recording revenue of R6��340 million. Americas, which benefitted from the added contribution from the acquired products, led the growth, followed by Africa Middle East boosted by the Lilly portfolio. Gross profit percentage of 61,0% (H1 2024: 61,6%) was supported by a favourable sales mix from Americas.

OTC
OTC revenue declined by 3% (+2% CER) to R4��743 million, impacted by order delays in Africa Middle East, but is expected to rebalance in H2 2025. Excluding Africa Middle East, the other regions enjoyed solid CER growth of 6% for the period. The Australasia OTC portfolio has, for the first time, delivered revenue equal to the region’s Prescription segment and is well positioned for future growth. Gross profit percentage of 58,4% was closely aligned to the prior period (H1 2024: 58,8%).

Injectables
The Injectables portfolio has returned to growth in H1 2025, rising 4% (10% CER) to R5��019 million. Africa Middle East growth was fuelled by the Lilly products including the successful launch of Mounjaro in South Africa during December 2024. The recent product swop transaction with Sandoz impacted Asia positively and Europe negatively, while providing a strong net benefit to Injectables growth. Gross profit percentage declined to 57,5% (H1 2024: 58,9%) influenced by the impact of national volume-based procurement (“VBP”) in China.

Manufacturing
Manufacturing revenue of R5��858 million ended 4% lower (0% CER) with growth in FDF revenue offsetting declines in the Heparin and API businesses. FDF revenue was up 59% supported by the growing contribution from sterile manufacturing contracts. The Heparin revenue reduction was anticipated as the business benefitted from the transition to a working capital light toll model in the prior year. API revenue declined by 21% to R1 888 million impacted by order phasing with a strong recovery expected in H2 2025. Gross profit percentage of 15,9% (H1 2024: 5,3%) benefitted from the higher FDF contribution with a more than twofold increase in normalised EBITDA over the prior period.

PROSPECTS
The Group has made positive progress during the reporting period and is well positioned to deliver on its strategic ambitions.

The negative effects of VBP in China and the reduction in Russia CIS sales are out of the Commercial Pharmaceuticals base, clearing the business of material risk. We anticipate double digit CER revenue and normalised EBITDA growth from Commercial Pharmaceuticals for the full year, underpinned by organic growth in all three segments and benefitting from the acquired portfolio in Latam and the exciting rollout of Mounjaro in South Africa. Following ��ֳ�’s acquisition of Sandoz’s business in China, that business will be reshaped in H2 2025 to ensure it has the capacity and flexibility to meet future opportunities and challenges.

Positive progress has been made towards commercialisation of the Novo insulin manufacturing contract with the final technical milestones expected to be completed in Q4 2025. We expect Manufacturing to continue to deliver robust growth in H2 2025 supported by a sustained strong contribution from sterile manufacturing contracts in FDF and a seasonal second half weighted rebound from the API business. The absolute growth in CER normalised EBITDA from Manufacturing in H2 2025 is anticipated to be similar to the growth achieved in H1 2025.

Localisation preferences are anticipated to be legislated in Q2 CY 2025 which will ensure that all South African dossier registrations for locally manufactured products receive priority review from SAHPRA. The regulatory pathway timelines for the Serum paediatric vaccines will benefit as a result with potential commercial sales from calendar year 2026. ��ֳ� remains committed to achieving incremental CER EBITDA growth from sterile capacity fill initiatives in FDF of R2��450 million over the period FY 2025 to FY 2026 (compared to FY 2024).

GLP-1s, sterile injectable products for the treatment of type 2 diabetes and obesity, represents the largest opportunity currently present in the global pharmaceutical industry. During the past period ��ֳ� has made significant progress in positioning itself as an owner of the intellectual property associated with generic semaglutides (a class of GLP-1s), as a manufacturer of the injectable dosage form of the medication and in establishing the appropriate marketing and distribution reach in time for launch of these products in the market. The first revenue generated by ��ֳ� from its GLP-1 initiatives could be as early as the latter part of FY 2026.

Manufacturing inventory levels are expected to reduce in H2 2025 following the seasonal growth in the first half. This reduction coupled with a cyclically stronger operating cash flow in the second half, should assist the Group in achieving an operating cash conversion rate greater than our target of 100% at year end. Finance costs are anticipated to benefit from lower effective interest rates in H2 2025 driven by the recent interest rate cuts across our EUR, ZAR and AUD debt pools. We anticipate that effective tax rates will be higher from FY 2025 onwards, impacted by the increased profit contribution from sterile manufacturing as well the retrospective introduction of the BEPS Pillar 2 legislation in South Africa.

Any forecast information in the above-mentioned paragraphs has not been reviewed or reported on by the Group’s auditors and is the responsibility of the directors.

The contents of the short form announcement are the responsibility of the Board of directors of ��ֳ�. The information in the short form announcement is a summary of the full announcement.

The full announcement is available on ��ֳ�’s website /investor-relations/#financial-results-and-presentations and can also be accessed online at https://senspdf.jse.co.za/documents/2025/jse/isse/APN/HYresults.pdf. Any investment decision must be based on the information contained in the full announcement.

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��ֳ� announces local availability of Lilly’s Mounjaro

Shauneen Beukes — Fri, 20 Dec 2024 08:02:47 +0000

Johannesburg – JSE-listed ��ֳ� Pharmacare Holdings Limited (“��ֳ�”), a global multinational specialty pharmaceutical company, earlier today announced the local availability of Eli Lilly’s (“Lilly”) tirzepatide, marketed globally as Mounjaro^®.

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Mounjaro® is a once-weekly glucose-dependent insulinotropic polypeptide (“GIP”) receptor and glucagon-like peptide-1 (“GLP-1”) receptor agonist, used as an adjunct to diet and exercise to treat adults with insufficiently controlled Type II diabetes, which has been approved by the South African Health Products Regulatory Authority (“SAHPRA”).

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On 30 August 2023, ��ֳ� announced that it had entered into a distribution and promotion agreement with Lilly to extend access to Lilly’s innovative portfolio of medicines to patients in South Africa and the rest of Sub-Saharan Africa.

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Stephen Saad, ��ֳ� Group Chief Executive said, “��ֳ� values our relationship with Lilly and its recognition of ��ֳ� as its chosen partner in Southern Africa to assist in contributing towards arresting non-communicable diseases (“NCDs”) which include cardiovascular diseases, cancer and diabetes. Tirzepatide is one of the therapeutic options available to physicians for the treatment of Type II diabetes, which has doubled in recent times ^[1], with one in two diabetic patients in South Africa being undiagnosed ^[2]. A strong link is evident between diabetes, heart disease and obesity which triggers the metabolic-cardio-renal complex ^[3] and which poses a significant financial and public health threat to an already over-burdened healthcare system, impacting lives and livelihoods. Tirzepatide represents an added therapeutic option to address the rising tide of NCDs. It will increase access and can significantly improve related health outcomes.”

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Tirzepatide will be available in South Africa during the latter part of December 2024 in single-dose vials, with a KwikPen® presentation currently under evaluation at SAHPRA.

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[1] Stats SA. Non-Communicable diseases in South Africa: Findings from death notifications 2008 – 2018.

Available at: (Accessed 19 December 2024).

[2] IDF (2019) Diabetes Atlas – Ninth edition 2019, International Diabetes Federation. Available at: https://www.diabetesatlas.org/upload/resources/material/20200302_133351_IDFATLAS9e-final-web.pdf (Accessed: 12 November 2024).

[3] Usman MS, Khan MS, Butler J. The Interplay Between Diabetes, Cardiovascular Disease, and kidney disease. 2021 Jun. In: Chronic Kidney Disease and Type 2 Diabetes. Arlington (VA): American Diabetes Association; 2021 Jun. Available from: https://www.ncbi.nlm.nih.gov/books/NBK571718/ doi: 10.2337/db20211-13

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��ֳ� and SEMDSA highlight the alarming rise of non-communicable diseases on World Diabetes Day

Shauneen Beukes — Wed, 13 Nov 2024 16:27:36 +0000

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Johannesburg – JSE-listed ��ֳ� Pharmacare Holdings Limited (“��ֳ�”), a global multinational specialty pharmaceutical company, earlier today launched an awareness campaign around the alarming rise and associated risks of non-communicable diseases (“NCDs”) at a joint media briefing with the Society for Endocrinology, Metabolism and Diabetes of South Africa (“SEMDSA”).
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There has been a notable global increase in NCDs, which are collectively responsible for 74% of deaths worldwide and include cardiovascular diseases, chronic respiratory disease, cancer and iabetes. This trend is being mirrored in South Africa where major NCDs have increased 58,7% over the past 20[1] years and it is set to continue along this trajectory. Some 71% of global deaths (41 million) are attributed to NCDs with 1.5 million being for diabetes[2], and with 80% of NCDs being classified as premature.

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Stavros Nicolaou, ��ֳ� Group Senior Executive Strategic Trade said, “There is a strong link between obesity, diabetes, and cancer, with the former triggering what has become known as the metabolic-cardio-renal complex of diseases. If left unarrested, the economic impact of NCDs will significantly over-burden an already highly stretched healthcare system and impact lives and livelihoods. On World Diabetes Day, we strongly encourage people to learn about the risks of diabetes and assess their own risk, to understand the differences between Type 1 and Type II diabetes, and to seek appropriate support from their healthcare professional if they are concerned about their health.”

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“��ֳ� remains committed to contributing towards the management of NCDs, as has been demonstrated by the Group’s investment of more than R10 billion in sterile manufacturing capacity. This capability has positioned ��ֳ� as an emerging contributor in rapidly expanding the production of treatment options for diabetes.”

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“Aligned to this commitment we have also noted, with concern, the increasing lack of suitably qualified medical professionals to treat NCDs, and we are pleased to announce a Fellowship to SEMDSA for medical specialisation in the field of Endocrinology.”

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Dr Reyna Daya, SEMDSA President said, “Approximately 50% of South Africans with diabetes remain undiagnosed, and this NCD has reached pandemic proportions. Diabetes treatment requires multiple resources, and we are currently experiencing a shortage of healthcare professionals who can treat diabetes and its complications.�� Our country also needs to increase awareness and heighten discussions around this disease. These patients are at risk of developing both significant and severe cardiac and renal complications, both of which require access to special care units, which are sadly lacking across our provinces. There is already a significant economic impact to productivity with patients who are presenting diabetes and its complications. Irrespective of a patient’s position on the social ladder, once diagnosed, there is hope with treatment options, albeit that they remain costly and inaccessible to many.”

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��ֳ�’s investment in world class pharmaceutical manufacturing in South Africa has improved supply security and infectious disease prevention in Africa, thereby assisting with the of solving regional health issues through local capabilities. Additional investment has also targeted skills development, talent retention, and new technology, which has positioned ��ֳ� to respond swiftly to breakout pandemics and has become a significant differentiator for the Group.

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For Editors:
Click to download ��ֳ�’s World Diabetes Day press pack

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[1] : Non communicable diseases: Findings from death notifications (2008-2018), published 17 October 2023.

[2]

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��ֳ� to participate in the Investec CEO conference in London

Shauneen Beukes — Wed, 13 Nov 2024 12:30:13 +0000

Durban – JSE Limited listed ��ֳ� Pharmacare Holdings Limited (“��ֳ�”) (APN:JSE), a global specialty and branded pharmaceutical company, announced today that Stephen Saad, Group Chief Executive and Sean Capazorio, Group Chief Financial Officer, are scheduled to participate in meetings with investors at the Investec CEO Conference on 14 and 15 November 2024.

Investors, analysts, members of the media and the general public may access the presentation on ��ֳ�’s website which will be made available on 14 November 2024, at 08:00am GMT+2/ 06:00AM GMT +00.

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��ֳ� partners with PinkDrive to mobilise cancer screening

Shauneen Beukes — Wed, 30 Oct 2024 13:23:34 +0000

Johannesburg – ��ֳ� Pharmacare, (“��ֳ�”), the South African subsidiary of the ��ֳ� Group, a global speciality and branded multinational pharmaceutical company, has partnered with PinkDrive NPC, a recognised leader in cancer screening and awareness, to contribute towards the funding of a new mobile cancer screening clinic.

The fourth mobile clinic in the PinkDrive fleet will bring critical gender-related cancer screening to rural and peri-urban disadvantaged communities that don’t have immediate access to medical facilities.

Stavros Nicolaou, ��ֳ� Group Senior Executive Strategic Trade, said, “Our country and continent is experiencing a curve in non-communicable diseases, (“NCD”) and cancers are one of the most prominent contributors to this surge. If left un-arrested, NCD’s will eventually overwhelm our healthcare system with broader dire economic, social and societal consequences. Many concerns can be managed and/or treated through early detection and intervention. Early screening in particular remains highly effective. As an organisation highly committed to and invested in positively contributing to solving among the most intractable of public health challenges, ��ֳ� is privileged to partner Pink Drive in delivering a fully equipped mobile clinic that will assist resource-constrained and underfunded communities in confronting the scourge of cancer. These patients usually only receive access to treatment when they are diagnosed at a highly advanced stage of disease, mostly with limited prospect of survival, with the oblivious devastating consequences on families.”

The PinkDrive fleet of cancer screening mobile clinics provides mammograms and clinical breast examinations, pap smears, PSA testing for prostate cancer and education on breast, cervical, prostate and testicular cancer.

Breast cancer is the most commonly occurring cancer in women worldwide and is estimated to affect one in eight women. If caught early and treated appropriately, the prognosis is excellent. In South Africa, HPV infections and cervical cancer also pose significant public health challenges. Despite existing interventions, the delay in testing often results in missed treatment opportunities, exacerbating the burden of gender-related cancer in the country.

“PinkDrive aims to address this crisis with our unique mobile cancer screening units which contain state-of-the-art screening equipment managed by specialised medical personnel who are empathetic to the difficulties experienced in the community and how to address issues in local languages at various education levels allows us to have a measurable impact on our beneficiaries. With support from our funders, we can extend our fleet of trucks to reach more people in more areas,” explains Noelene Kotschan, CEO and Founder of PinkDrive NPC.

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��ֳ�’s revenue increases 10% underpinned by a strong second half performance

Shauneen Beukes — Tue, 03 Sep 2024 10:45:33 +0000

JSE-listed ��ֳ� Pharmacare Holdings Limited (APN), a global multinational specialty pharmaceutical company, has reported solid Group financial results for the year ended 30 June 2024.

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Stephen Saad, ��ֳ� Group Chief Executive said, “We delivered our highest ever six-month normalised EBITDA in H2 2024 growing 17% over H1 2024 and building momentum for sustainable growth. Manufacturing revenue grew by 25% led by finished dose form revenue up by 33% with Commercial Pharmaceuticals growing 4% after absorbing the impact of volume-based procurement (“VBP”) in China. Regionally concluded acquisitions in China and Latin America contributed to derisking the base Commercial Pharmaceuticals business which is well poised for future growth. Robust cash generation from earnings was underpinned by sustainably lower working capital investment, assisted by the recently announced change in the operating model of our Heparin business which released R2,9 billion in inventory.”

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“Our pursuit of manufacturing and commercial opportunities to enter the rapidly growing GLP-1 market for breakthrough products in the treatment of diabetes and obesity has advanced positively. This exciting opportunity could benefit ��ֳ� from calendar year 2026 onwards.”

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GROUP HIGHLIGHTS

Revenue increased by 10% (+5% in constant exchange rate (“CER”)) to R44,7 billion (FY 2023: R40,7 billion);
Normalised EBITDA increased by 1% (-3% in CER) to R11,3 billion (FY 2023: R11,1 billion);
Normalised headline earnings per share remained flat (-4% in CER) to 1 492,1 cents (FY 2023: 1 498,5 cents);
Headline earnings per share decreased by 3% (-7% in CER) to 1 356,6 cents (FY 2023: 1 405,4 cents)
Earnings per share decreased by 16% (-18% in CER) to 991,4 cents (FY 2023: 1 176,9 cents);
Operating cash flow per share increased 13% to 1 401,4 cents (FY 2023: 1 242,6 cents);
Dividend declared to shareholders increased by 5% to 359 cents per ordinary share (FY 2023: 342 cents).

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¹ The Group assesses its operational performance using constant exchange rates (“CER”). The table above compares performance to the prior comparable period at reported exchange rates and at CER.

² �� The CER % change is based upon the performance for the year ended 30 June 2023 recalculated using the average exchange rates for the year ended 30 June 2024.

³ �� Operating profit before depreciation and amortisation adjusted for specific non-trading items as defined in the Group’s accounting policy.

⁴ �� Normalised headline earnings per share (“NHEPS”) is headline earnings per share (“HEPS”) adjusted for specific non-trading items as defined in the Group’s accounting policy.

⁵ �� Dividend declared on 2 September 2024, to be paid on 23 September 2024 (2023: Declared on 29 August 2023 and paid 26 September 2023).

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GROUP PERFORMANCE

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H2 2024 was the start of ��ֳ�’s journey to both realising the tangible benefits from sterile manufacturing investments and the delivery of a predictable, resilient, growing Commercial Pharmaceuticals business that has managed and absorbed the volume-based procurement (“VBP”) risks in China. In FY 2024 the Group has achieved a record H2 normalised EBITDA of R6��061 million up 17% on H1 2024. The higher than anticipated negative impact of VBP resulted in ��ֳ� falling short of its targeted mid-single digit growth in EBITDA.

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Group Revenue for the reporting period was up 10% led by Manufacturing growing by 25% and Commercial Pharmaceuticals increasing by 4%. Gross Profit grew 3% diluted by an increased Manufacturing sales mix with the primary driver being the liquidation of Heparin inventory of R2,9 billion. Normalised EBITDA of R11��255 million was up 1%.

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Net financing costs of R1 232 million (R1 284 million adjusted for capital raising fees on transactions of R52 million) remained flat compared to the prior financial year. Increased net interest costs, fueled by higher rates and increased net debt levels, were offset by lower foreign exchange losses resulting from reduced volatility in emerging market currencies relative to the Euro. Financing costs in FY 2025 will continue to be influenced by the interest rate cycle and currency volatility. NHEPS of 1 492 cents ended marginally below FY 2023. HEPS declined by 3% and earnings per share ended 16% lower affected by higher acquisition related transaction costs and the impairment of VBP impacted intangible assets respectively.

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Operating cash flow per share of 1 401 cents grew 13%, supported by an improved operating cash conversion rate of 103% (FY 2023: 88%). This exceeded our internal benchmark of 100%. Solid operating cash flows, even after partial funding of the Latin American product portfolio acquisition of R2,1 billion, coupled with the benefit of reducing the Group’s investment in Heparin inventory by R2,9 billion were the key catalysts in this positive shift. Net debt increased from R22,2 billion in June 2023 to R26,9 billion in June 2024 with net acquisitions totalling R7,7��billion being key to the rise. The leverage ratio ended at 2,3x comfortably within the Group’s targeted range.

SEGMENTAL PERFORMANCE

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Commercial Pharmaceuticals

Commercial Pharmaceuticals revenue grew by 4% to R30 570 million with the growth in Prescription and OTC more than offsetting the decline in Injectables revenue. Gross profit margins were marginally lower at 59,4% (FY 2023: 60,0%) after absorbing the impact of VBP in China.

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Prescription

Prescription Brands enjoyed double digit growth of 15%, recording revenue of R11��380 million. The revenue growth was underpinned by solid organic growth in its largest region, Africa Middle East, and organic and acquisitive growth in the Americas which is now the second largest region.

Gross profit percentage was up at 60,9% (FY 2023: 60,7%) with favourable sales mix more than offsetting the impact of the regulated price cuts in Australia.

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OTC

OTC, the second largest segment in Commercial Pharmaceuticals, grew revenue by 7% to R9 706 million with all regions reporting solid growth. Gross profit percentage of 58,7% remained in line with the prior year of 58,6%.

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Injectables

Injectables was impacted by the more severe than expected outcome of VBP in China on Fraxiparine and Diprivan. Growth in Africa Middle East and the Americas (most notably Brazil) partly mitigated the overall segment sales reduction which recorded a revenue decline of 9% to R9 484 million.

Gross profit percentage declined to 58,2% (FY 2023: 60,6%) influenced by the impact of VBP, partly offset by cost of goods savings from the continuing insourcing of sterile production.

Manufacturing

Manufacturing revenue grew significantly, increasing 25% partly aided by exchange rate tailwinds. FDF revenue growth accelerated from 10% in H1 2024 to 33% at year-end, supported by an increased contribution in H2 2024 from third-party contracts for sterile manufacturing. Heparin revenue growth of R1��469 million over the comparable period was largely due to the transition to toll manufacture. API sales were up 2%, following a rebound in H1 2024.

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Gross profit of R1��307 million was 2% ahead of FY 2023. The gross profit percentage ended lower at 9,2% (FY 2023: 11,4%) influenced by the increased sales mix of Heparin and the non-recurrence of the grant funding enjoyed in the prior year.

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PROSPECTS

The Group has achieved a solid set of results for the year ended 30 June 2024 even after absorbing the more severe impact of VBP in China. The 17% growth in normalised EBITDA in H2 2024 compared to H1 2024 sets a firm foundation in building momentum for anticipated strong growth in FY 2025.

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The Commercial Pharmaceuticals business has been derisked and is well poised for future growth. We anticipate Commercial Pharmaceuticals will achieve double digit CER revenue growth in FY 2025 supported by underlying growth in all three business segments and underpinned by organic growth accompanied by annualised growth from recent portfolio acquisitions.

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For Manufacturing, we expect FDF, supported by an increased sterile capacity fill contribution, to be the main contributor to CER EBITDA growth in FY 2025. Over the period FY 2025 to FY 2026 (compared to FY 2024) we estimate CER EBITDA to increase incrementally by R2 450 million from these initiatives. This value growth is consistent with previous guidance, but the realisation may vary between the two financial years, dependant on the timing of the South African regulatory approvals.

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Supporting our capacity fill and commercial initiatives, ��ֳ� has also secured a commercial license for the intellectual property necessary to commercialise GLP-1s post the expiry of the originator product patents. In addition, ��ֳ� will be the exclusive global supplier of these products to the licensor. This exciting opportunity could benefit ��ֳ� from calendar year 2026 onwards and consequently also be additive to the capacity fill contributions for FY 2026.

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Finance costs will continue to be influenced by the interest rate cycle. We are expecting an increase in net interest costs driven by the residual impact of current higher interest rates being carried forward to FY 2025. We expect the effective tax rate to increase in FY 2025 as the profit contribution from sterile manufacturing increases.�� Lower working capital investment and strong operating cash flows should assist us in achieving an operating cash conversion rate greater than our target of 100%.

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Any forecast information in the above-mentioned paragraphs has not been reviewed or reported on by the Group’s auditors and is the responsibility of the directors. The full announcement has been released on SENS and is available on ��ֳ�’s website. Any investment decision must be based on the information contained in the full announcement.

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��ֳ�’s Mandela Day programme changes more than 910 000 lives over 14 years

Shauneen Beukes — Wed, 17 Jul 2024 14:28:11 +0000

Durban – JSE Limited listed ��ֳ� Pharmacare Holdings Limited (“��ֳ�”), a global specialty and branded pharmaceutical company, is celebrating its 14^th consecutive year of Group-wide participation in

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Stephen Saad, ��ֳ� Group Chief Executive said, “ ��ֳ� has a track record of improving access to healthcare to all patients but more particularly the most vulnerable among us. This spirit of care extends beyond healthcare to many socio-economic development (“SED”) initiatives. We have so many challenges to address, that it can seem overwhelming. However, with one step at a time, we can move forward. Today, ��we celebrate serving more than 910 000 individuals through projects across more than 40 countries, and I honour our employees who are at the very heart of making a difference and who are the heroes of our Mandela Day programme. With every 10^th person in the world impacted by poverty^[1], we recognise that every effort, no matter how big or small, offers a promise of hope to those in need.”

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“We remain committed to an unwavering humanitarian spirit and actions that demonstrate generosity, humility and care and encourage others to join us and help make a difference to the most vulnerable among us,” added Saad.

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, recognised as the Group’s flagship SED campaign, was initiated in 2011 and has focused on partnering with worthy beneficiaries across the six continents where ��ֳ� has a business presence. The programme has assisted in providing relief to abandoned, neglected, orphaned or abused babies, children and women; the elderly, hungry and homeless; individuals inflicted with mental wellness challenges; students who strive to achieve academically; those who are disabled; victims of political conflict; residents at social rehabilitation institutions; healthcare facility patients who need support and equipment; environmental and climate challenges; and inequality, among others.

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^[1] https://ourworldindata.org/poverty

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��ֳ� backs Donald Ramphadi to bring home the gold in upcoming mobility impaired tennis championships

Shauneen Beukes — Mon, 06 May 2024 11:54:51 +0000

Johannesburg, South Africa – ��ֳ� Pharmacare Holdings Limited (“��ֳ�”), a global multinational specialty pharmaceutical company, has presented a state-of-the-art high performance wheelchair to South African wheelchair tennis star Donald Ramphadi.

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Ramphadi, a French-open double quads champion and a prominent figure in wheelchair tennis, reached his at the Australian Open Wheelchair Championships in January 2024. He is undeterred by his impaired mobility and his by the International Tennis Federation is testament to his talent.

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On the occasion of the presentation, Stavros Nicolaou, ��ֳ� Senior Executive Strategic Trade said, “��ֳ� is honoured to support Donald Ramphadi ahead of his 2024 season when he takes to international courts to defend his title at the Paris Paralympics in France, among many others. We also laud Donald for his nomination in the 2024 Sportsman of the Year with a Disability category. In recent years we recognized Donald’s exceptional athletic talent, his unwavering dedication to wheelchair tennis and his dreams of bringing back gold for South Africa. ��ֳ� subsequently facilitated the customisation and provision of a state-of-the-art high performance wheelchair tailored to his unique requirements to assist him in reaching his athletic goals. This action endorses ��ֳ�’s commitment to inclusivity, accessibility, and the empowerment of athletes with disabilities. It is also aligned to our philosophy of embracing sports, arts and culture as powerful unifiers to promote healthy lifestyles and reduce the disease burden on our healthcare system.”

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An overjoyed Donald Ramphadi said, “I am so grateful for this generous donation from ��ֳ� which is a major boost ahead of the 2024 Paris Paralympics in France. I’ve previously played in matches where I’ve had to retire my lead because of my wheelchair which naturally shattered many dreams. I’m excited about this wheelchair and I’m more determined than ever to up my game and take everything that I can in the upcoming tournaments that I compete in.”��

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��ֳ� announces additional pharmaceutical donations for Ukranian patients

Shauneen Beukes — Mon, 25 Mar 2024 10:10:04 +0000

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Johannesburg, South Africa – ��ֳ� Pharmacare, Africa’s largest pharmaceutical company, has announced continued humanitarian support to Ukraine, confirming further donations of critical care products to treat hospitalized patients who have been impacted by the ongoing conflict in that country.

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Stavros Nicolaou, ��ֳ� Group Senior Executive Strategic Trade, said, “��ֳ� is highly sensitised to the human suffering that war and conflict brings and which has had a devastating impact on innocent civilians. We are pleased to announce that we are further extending our support to Ukrainian victims of the present-day conflict with much needed pharmaceutical products and we are in the process of despatching additional supplies of Fraxiparine (for emergency surgeries) and Alkeran (for cancer) to treat patients in Ukrainian hospitals. We remain committed to providing ongoing humanitarian relief to victims of both natural and manmade disasters as may be necessary.”

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��ֳ� recently hosted His Excellency, former President of the Ukraine, Viktor Yushchenko during an official visit to South Africa. On this occasion he said, “I am deeply grateful to ��ֳ� for the invaluable humanitarian support provided to the people of Ukraine at this very tragic time. ��ֳ� has helped countless Ukrainians with generous donations of life-saving critical care medicines. ��ֳ�’s ongoing support reaffirms their understanding of the horrors of war, and demonstrates their unwavering care for innocent patients who are in desperate need of pharmaceutical products. I thank ��ֳ� for their contributions to date as well as their commitment to�� providing more products to treat our patients.”��

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One of the more important initiatives in this humanitarian collaboration with Her Excellency Ambassador and Plenipotentiary of Ukraine to South Africa, Liubov Abravoitova, concerns donations of Alkeran primarily used for the treatment of paediatric cancer patients at the Odessa Filatov Institute of Ophthalmology. She said, “We thank ��ֳ� for its solidarity with Ukrainian people and support to Ukraine with donations of life-saving medicines, as well as for its cooperation with the Embassy of Ukraine in South African in humanitarian projects.” ��ֳ�’s latest Alkeran donation has been expedited specifically to assist in the treatment of a six year old patient who is at risk of losing her only eye.

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In March 2022 ��ֳ� dontated life-saving medicines for 62��000 surgeries in Ukraine and also helped to evacuate South African medical students who were stranded in war-torn Ukraine.

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��ֳ� building momentum with revenue up 10% to R21,1��billion

Shauneen Beukes — Mon, 04 Mar 2024 10:51:00 +0000

Johannesburg – JSE-listed ��ֳ� Pharmacare Holdings Limited (APN), a global multinational specialty pharmaceutical company, has reported solid unaudited interim Group financial results for the six months ended 31 December 2023.

SALIENT HIGHLIGHTS

Revenue increased by 10% (2% in constant exchange rate (“CER”)) to R21,1 billion (December 2022: R19,2 billion)
Normalised EBITDA increased by 2% (-5% in CER) to R5,2 billion (December 2022: R5,1 billion)
Normalised headline earnings per share increased by 1% (-5% in CER) to 688,3 cents (December 2022: 679,6 cents)
Headline earnings per share decreased by 6% (-12% in CER) to 620,7 cents (December 2022: 660,6 cents)
Earnings per share decreased by 13% (-18% in CER) to 520,8 cents (December 2022: 602,0 cents)
Operating cash flow per share increased by 44% to 553,2 cents (December 2022: 384,3 cents)

Stephen Saad, ��ֳ� Group Chief Executive said, “Great progress has been made in delivering on our ambitious strategy to lay the foundation for strong growth. We have successfully completed the necessary steps to reach the commercialisation stage for the manufacture of mRNA platform products which will augment revenue in H2 2024. Notable financial highlights include a 10% increase in revenue and a 44% increase in operating cash flow per share. The transition to new toll manufacturing agreements for the Heparin business is expected to reduce inventory investment by R3 billion by the end of the financial year. Organic growth complemented by acquisitions is set to drive Commercial Pharmaceuticals’ revenue in H2 2024 up by some R1 billion over H2 2023. We are also pleased to report that our recently announced acquisition of products in China, which remain subject to Competition Authority approval, will mitigate the negative volume-based procurement impact from FY2025.”

Noteworthy achievements in this half include, inter alia, the following:

Sterile manufacturing contract for mRNA filling reaches commercialisation stage
Successful completion of the required trial and validation batches has resulted in the fulfillment of the suspensive conditions to the previously disclosed agreement for the manufacture of mRNA platform products. The commercialisation of this opportunity will benefit revenue and contribution in the last quarter of H2 2024. The impact of the volume ramp up and its annualisation will be materially higher from FY2025 onwards.

Heparin business transitions to a toll manufacturing model
Manufacturing agreements for the supply of heparin-based syringes are transitioning to a toll contract manufacturing arrangement. The heparin active pharmaceutical ingredient (“API”) will now be owned by the customers. This will reduce ��ֳ�’s investment in heparin inventory and increase operating cash flows in both FY2024 and FY2025. In H1 2024, ��ֳ�’s investment in heparin inventory reduced by R1 billion with a further R2 billion reduction anticipated by the end of June 2024.

China volume-based procurement (“VBP”) mitigation strategy well on track
��ֳ� announced that it had concluded agreements with Sandoz AG (“Sandoz”), including acquiring the Sandoz business in China. The net upfront consideration is EUR27.9 million followed by potential net milestone payments of EUR9.2 million. Approval for the transaction from the Competition Authority in China is anticipated in May 2024. The transaction will materially mitigate the negative impact of VBP on ��ֳ�’s existing business in China on an annualised basis from FY2025.

Commercial Pharmaceuticals portfolio enhancement strategy set to drive strong growth in H2 2024 revenue
H2 2024 will be boosted by the distribution and promotion agreement with Lilly for sub–Saharan Africa and the product purchase agreement with Viatris for Latin America. The agreement with Lilly is effective from January 2024. Subsequent years will benefit from the launch of key pipeline products including Lilly’s Tirzepatide, marketed globally as Mounjaro®. Viagra, Lipitor, Norvasc, Lyrica and Celebrex are key brands included in the product portfolio acquired for Latin America.

GROUP HIGHLIGHTS

¹The Group assesses its operational performance using constant exchange rate (“CER”). The table above compares performance to the prior comparable period at reported exchange rates and at CER.
² The CER % change is based upon the performance for the six months ended 31 December 2022 recalculated using the average exchange rates for six months ended 31 December 2023.
³Operating profit before depreciation and amortisation adjusted for specific non-trading items as defined in the Group’s accounting policy.
^4��Normalised headline earnings per share (“NHEPS”) represents headlines earnings per share (“HEPS”) adjusted for specific non-trading items as defined in the Group’s accounting policy.

GROUP PERFORMANCE
The Group has exceeded its guided performance growing normalised EBITDA ahead of H1 2023 and overcoming the negative impact of VBP in China as well as the loss of grant funding which benefitted the prior period.

Group revenue for the six months ended 31 December 2023 grew 10% (2% CER) to R21 141 million, with Commercial Pharmaceuticals revenue up 3% (-3% CER) and Manufacturing revenue increasing by 33% (17% CER). Group gross profit grew 4% (-3% CER) muted by an increased Manufacturing sales mix. Normalised EBITDA rose 2% (-5% CER) to R5 194 million. Elevated transaction costs primarily relating to acquisitions, together with increased intangible asset impairments due to the VBP impact in China, resulted in operating profit declining.

Normalised net financing costs of R566 million were 3% (-10% CER) lower than the prior year. Increased net interest costs, fueled by higher rates, were more than offset by lower foreign exchange losses resulting from reduced volatility in emerging market currencies relative to the Euro. NHEPS advanced 1% (-5% CER) aided by the lower net financing costs. Financing costs in H2 2024 will continue to be influenced by the interest rate cycle and emerging market foreign currency volatility. HEPS declined by 6% (-12% CER) and earnings per share ended 13% lower (-18% CER) affected by the higher transaction costs and intangible asset impairments respectively.

SEGMENTAL PERFORMANCE
Commercial Pharmaceuticals
��ֳ� has revised and refined its reportable segments to align to the Group’s Commercial Pharmaceuticals growth strategy. The new segments comprise Prescription, Over-the-counter (“OTC”) and Injectables which have been defined in the basis of accounting section of the financial results.

Commercial Pharmaceuticals revenue grew by 3% (CER -3%) to R 15��029 million underpinned by organic growth in OTC and Prescription offset by a decline in Injectables revenue. Gross profit margins remained consistent at 59.8% (H1 2023: 60.0%).

Prescription
Prescription Brands recorded revenue of R5��306 million enjoying steady momentum of 7% (CER 1%) aided by growth in its largest region, Africa Middle East, and the Americas. Australasia, the second largest region in this segment, was adversely impacted by further regulated price reductions.

Gross profit percentage was up at 61.6% (H1 2023: 60.7%) augmented by a favourable sales mix, which more than offset the regulated price cuts in Australia.

OTC
OTC, the second largest segment in Commercial Pharmaceuticals, grew revenue by 10% (CER 4%) to R4 893 million with all regions reporting solid growth. Gross profit percentage of 58.8% remained in line with the prior year of 58.6%.

Injectables
This segment was heavily impacted by further VBP in China and the reduction in demand in Russia CIS. Strong hormonal injectable brand growth in the Americas (most notably Brazil) partly mitigated the overall segment sales reduction which recorded a revenue decline of 6% (CER -12%) to R4��830 million.

Gross profit percentage declined to 58.9% (H1: 2023 60.5%) influenced by the impact of VBP, partly offset by further cost of goods savings from insourcing sterile production.

Manufacturing
Manufacturing revenue grew significantly, increasing 33% (CER 17%) partly aided by exchange rate tailwinds. API, the largest and most profitable segment in Manufacturing, rebounded strongly in H1 2024 with revenue growing by 18% (CER 4%). Finished Dose Form (“FDF”) revenue increased by 10% (CER -2%) impacted by the loss of final COVID vaccine sales included in the previous year. Heparin incremental revenue growth of R957 million over the comparable period was augmented by the transition to toll manufacture. Following this transition the Heparin segment which previously included the full value chain contribution from all heparin containing products being APIs and FDF sales, will now include heparin API sales only.

Gross profit percentage was in line with the prior year at 5.3% (H1 2023: 5.2%) with the loss of grant funding being offset by a strong performance from API, the benefit of additional Heparin sales and the delay to the second half of FY2024 of a technical shutdown at the Group’s French facility.

PROSPECTS
The Group has achieved results in the first half which were well aligned to guidance provided.

H2 2024 is the start of the journey to both realising the tangible benefits from sterile manufacturing investments and delivering a predictable growing base Commercial Pharmaceuticals business that has managed and successfully absorbed the VBP risks faced in China.

Based upon current exchange rates, and notwithstanding the impact of VBP in China and the loss of grant funding of USD30 million which benefitted the prior year, we anticipate mid-single digit reported growth in normalised EBITDA for FY2024. The targeted growth is underpinned by expected reported revenue growth in both Commercial Pharmaceuticals and Manufacturing.

For Commercial Pharmaceuticals, we expect the H1 2024 revenue increase to be boosted by an additional R1 billion in revenue growth targeted for H2 2024 over H2 2023. This growth will be driven organically and complemented by the inclusion of portfolio acquisitions in South Africa and Latin America partly offset by the impact of VBP in China, including the addition of Diprivan in the latest round. Manufacturing is poised to enjoy a strong second half supported by the expected contribution of R500 million flowing from the initiation of sterile contracts and a seasonally stronger performance from the API business.

We expect manufacturing inventory levels to reduce in H2 2024 as the Heparin business fully transitions to a working capital light toll manufacturing model. The lower anticipated working capital cash flow investment compared to FY2023 should assist us in achieving an operating cash conversion rate greater than our target of 100%.

During H2 2024, we will be looking to close out further opportunities, currently under discussion or diligence, to more fully utilise our available sterile capacities. We remain confident in achieving the guided contributions of at least R3 billion in FY2025 increasing to no less than R4 billion in FY2026. These contributions, together with a de-risked Commercial Pharmaceuticals’ base business will form the cornerstone for strong organic revenue and earnings growth into the future.

Any forecast information in the above-mentioned paragraphs has not been reviewed or reported on by the Group’s auditors and is the responsibility of the directors.

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