The Financial Express

Pharma cos remain unfazed despite the onslaught of COVID-19

Huge sales of disinfectant items now a boon to the companies

Mohammad Mufazzal | Published: May 07, 2020 10:02:29 | Updated: May 11, 2020 10:29:51

Pharma cos remain unfazed despite the onslaught of COVID-19

Listed pharmaceuticals companies are expecting a growth in their earnings for January-March (Q3) as their productions, distributions and sales have almost remained 'unaffected' amid COVID-19 pandemic.

Pharmaceuticals companies are busy to meetthe demand of life saving products while other sectors have been facing serious disruption in productions following the lockdown enforced to flatten the infection of COVID-19.

Under such situation, one of the local manufactures has also expressed optimism on year-on-year sales growth through a disclosure served to London Stock Exchange-based newswires.

"The productions in many sectors, except the pharmaceuticals, have almost come to a halt following the ongoing lockdown. The earnings of pharmaceuticals companies will rise or remain flat for January-March, 2020," said Md. Moniruzzaman, managing director of IDLC Investments.

He said it will be a stellar performance even if the earnings of the pharmaceuticals companies remain flat for Q3 as many companies in other sectors are likely to incurloss or decline in earnings for the period due to disruptions in productions.

Talking to the FE,the manufactures said their sales remained unaffected or increased in some cases following huge consumption of disinfectant items during the period of deadly caronavirus infection.

Besides, the government's support provided to keep the distribution and sales of life saving drugs has played a pivotal role to keep the companies' productions and distributions unfazed.

Dr. Sarwar Ali, chairman of Renata, said the level of their company's manufacturing still remains good despite manufacturing remains closed in other sectors amid the ongoing lockdown.

"People are now very much health-conscious amid the panic-driven situation created following the outbreak of COVID-19. So, the sales of products especially the Azithromycin, which is used to treat a wide variety of bacterial infections,rose significantly compared to other products," Mr Ali said.

He, however, said the overall sales of the products of the pharmaceutical companies may not rise significantly as the amount of surgeries has declined in many places.

"Nevertheless, we hope the earnings of pharmaceutical companies will remain unaffected for January-March, 2020," said the chairman of Renata.

Investors' expectation regarding the rise in earnings of the pharmaceuticals companies was also reflected through their increased participations in the share transaction of those companies.

Before closure of the trading, the country's capital market was mainly driven by pharmaceuticals and chemical companies following investors' increased participation.

On the trading sessions executed between March 8 and March 25, the pharmaceuticals and chemical companies had the highest contribution up to 77.6 per cent in daily market turnover featured by Dhaka Stock Exchange (DSE).

Rafiqul Islam, company secretary at ACME Laboratories, said their sales rose in March and April beyond expectations following the people's cautious attitude adopted after the outbreak of COVID-19.

"In some cases, the anxious people collected extra amount of drugs anticipating about the longevity of lockdown," Islam said. He said general treatment is affected in different hospitals.

"That's why, the sales of all products will not rise similarly. But the earnings of pharmaceuticals will remain unaffected for January-March, 2020," Mr. Islam added.

Preferring anonymity, a top official of the Square Pharmaceuticals said the company's manufacturing and distributions remain unfazed amid the lockdown.

"Pharmaceutical companies manufacture life saving products. And due to unaffected distribution channel, the earnings of the pharmaceutical companies will remain unfazed compared to other sectors," said the official of Square Pharmaceuticals, country's top pharmaceutical company.

According to information provided by RNS, the news service of the London Stock Exchange,Beximco Pharmaceuticals said its manufacturing operations are currently'unaffected'.

The company said they witnessed strong sales performance in the first three quarters of the financial year to March 31, 2020.

"The company anticipates some impact in the fourth quarter, however, Beximco Pharma still expects to report year-on-year sales growth for the full year to June 30, 2020," said the disclosure.

Despite having some disruptions in its international distribution network and supply chain, Beximco Pharma does not foresee any major shortage of raw materials in the immediate term,the company said.

"The company continues to work closely with its supplier networks and is reviewing alternative sources as part of contingency planning to ensure supply and distribution of finished products."


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