Indies Pharma hits billion-dollar milestone
Pharmaceutical company Indies Pharma Jamaica Limited says it has learnt the lessons from heavy revenue losses when it was forced to dump expired drugs. The post-pandemic write-down forced the company to rethink its inventory management, said CEO Guna Muppuri.
Last year, Indies Pharma wrote off some of the over-the-counter pharmaceutical stock that the company had on hand to deal with the COVID-19 pandemic.
“We took a careful look at the way we managed our inventory. We found that the timing of our purchases and its relationship to the flow of sales and expiry dates, and so on, were crucial areas that we had to get right,” Muppuri said.
The issue did not slow down the Montego Bay-based company, however, as this year its preliminary results show that Indies Pharma reached a new record and broke through the billion-dollar mark on annual sales revenue for the first time.
Still, its bottom line suffered a near five per cent decline.
In a robust fourth quarter ending October 2023, the pharma distributor improved its sales performance by 28 per cent, from $209 million to $268 million. That gain pushed yearly sales to $1.05 billion, which was a 12.6 per cent improvement from $937 million in FY2022.
In a report accompanying its fourth-quarter financial results, the company attributed the spike in sales to strong demand amid new strategies to drive sales.
Muppuri says that while reporting rules limit the extent and the type of comments that can be made about the coming year, the evidence so far, plus the likely greenlight from the United States’ Food and Drug Administration, FDA, were pointing to a positive outlook for the business.
Indies Pharma has been seeking approval of two new drugs for the US market. Regarding the ANDA, or Abbreviated New Drug Application, Muppuri said the FDA has so far accepted and fast-tracked the application.
“We don’t want to go too far ahead of ourselves with this, but there is every likelihood that we will continue seeing improved revenues, in addition to the consistent delivery of an average of over 20 per cent net profit margin,” he said.
The company’s profit margin for this year was 22 per cent. However, the nominal outturn was worse than the year before – earnings fell from nearly $221 million to $210 million for the financial year.
Indies Pharma is mainly in the business of supplying drugs, but it also operates a pharmacy called Trident, which is based in Montego Bay.
The company is actively exploring options for expansion, but Muppuri says those plans don’t extend to the retail operation. Of the $805 million of bond debt previously raised by the company, half of the funds was used to acquire three acres of land at Ironshore, a prime location in Montego Bay. Muppuri says the land is now valued at about $800 million, which will give the company options when the time comes to repay the bond in 2025.
“We can sell the land. With the present value, we could liquidate the asset and pay out the debt, or we can pursue other options,” he said.
The ‘other options’ could possibly hinge on a commercial park and BPO facility, that the company has had under consideration for development for some time, according to Muppuri.
The development plans are now going through the approval process, with further announcements likely to come in January, he said.