4 days ago
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The three pharmaceutical companies listed on the Jamaica Stock Exchange are enduring pain.
Two posted losses in their latest quarter, and the third missed targets within the soft economy. This economic contraction is showing up both in the top-line and bottom-line performance at all the companies. For the 12 months ending October 2024, Indies Pharma Jamaica Limited earned sales of $1.2 billion, or 9.8 per cent more than the previous year. Its net profit, at $221 million, increased 3.7 per cent over the period.
CEO Guna Muppuri is committed to the idea that Indies Pharma wants to deliver 10 per cent year-on-year growth in both the top line and in profits. He said the company was a little short on its targets, but at least the firm inked a profit. At the same time, Muppuri is rueing lost revenue and opportunities from his company’s interaction with the drug registration department of the Ministry of Health and Wellness, properly called the Standards and Regulations Branch.
“You have to blame the drug registration process at the Ministry of Health. This has completely come to a grinding halt,” Muppuri charged, signalling longer delays for drug approvals than in the past.
The sector cites that approvals of new generics can take six months. That’s months longer than in the past.
“What is happening now is the young cohort or the new layer of people at the Ministry of Health, they don’t want to take on accountability,” Muppuri claimed.
The ministry told the Financial Gleaner that it recently implemented an online portal called JSWIFT to speed up drug inspections. It, however, remained silent on the timelines for approvals.
For recently listed company R A Williams, the delays are showing up on the company’s bottom line, with the junior market-listed company reporting a second-quarter loss. R A Williams is reporting a loss of $16.5 million for the three months ended October 2024 on the back of a flat performance on the top line of $367 million. CEO Audley Reid said an economic downturn in Jamaica has generally cut spending power for consumers.
“While generally in the industry you may be observing a downturn, I’m not sure about all of our competitors, as I know they are responding; but I know, for us, it presents an opportunity,” Reid said, adding that cheaper generic drugs are part of the solution.
One such example is the recent roll-out of the anti-epileptic drug Iracet in November.
“It was one of those cost-effective options not available on the market to tackle that, you know, lower purchasing power that we are experiencing,” Reid explained.
Reid believes that adding new products to its base will assist the company during a downturn.
The Jamaican economy contracted by 2.8 per cent for the September 2024 quarter, in contrast to the growth of 0.2 per cent recorded for the June 2024 quarter. The authorities largely blamed the passage of Hurricane Beryl and its impact on the decline.
Reid also indicates that business has been impacted by the regulatory challenges that all have been experiencing industry-wide. He said there is a slow outturn of registration of new products from the Ministry of Health and Wellness.
“What I can confirm is that the pace at the ministry, through the Standards and Regulations Unit ... has been slow, and that has impacted our ability to grow even faster,” Reid told the Financial Gleaner.
He said R A Williams wants to add new partners already in the distribution space to grow the company’s reach islandwide.
Meanwhile, the latest available report from Medical Disposables & Supplies (MDS) showed a net loss of $50 million for the September quarter, or one-third worse year-on-year. This came after the company posted a small profit of $2.2 million for the quarter ended June 2024.
“The Standards and Regulatory staff are very dedicated but seems undermanned to handle the years of increased filings and demands,” noted Kurt Boothe, CEO at MDS.
He added that many of MDS’s expansion plans are hinged on the registration of “new molecules”, which are “delayed due to a seeming lack of resources” at the ministry.
“As a result, we are challenged to overcome missed opportunities and we endure lost sales prospects. The compounded issue is that new drugs are unable to be offered to our patients for periods of years at a time,” Boothe said.
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