Beximco Pharma Regulatory News (BXP)

18 Jun 2009 12:01



BEXIMCO PHARMACEUTICALS LTD.

18th June, 2009

Annual General Meeting Statement

Beximco Pharmaceuticals Limited ("BPL" or "Company"; AIM Symbol: BXP) today announces that all resolutions put before shareholders at the Annual General Meeting held on Tuesday 16th June were duly passed. 

The Company also announces that the Annual Report for 2008 is now available from the Company's website, which includes the audited accounts that were previously sent to shareholders and a review of operations for the year to 31 December 2008. 

During the course of the meeting Chairman of the Company, Ahmed Sohail Fasiur Rahman, made the following statement to shareholders:

"I welcome you all to the 33rd Annual General Meeting of Beximco Pharmaceuticals Limited (BPL or the Company). You are aware that during 2007 we faced unwarranted impediments due to unavoidable economic and political factors of the country and actually this adversity continued till early 2008. However, successfully facing all these challenges, during 2008 we could bring some remarkable successes for our Company. BPL has now very successfully re-established its strategic positioning in all areas of its operation. I am pleased to inform you that during this year we progressed towards successful accomplishment of our strategic goals to grow the company and strengthen the shareholders' value. Enhanced domestic market sales, impressive growth in sales in the international market, improved profitability, higher EPS all marked 2008 as another year of significant success. Here, I would like to place before you, some of the key operational issues of the company for your informed

Judgment:

Sales Performance

During the year under review, overall sales of the company registered an appreciable 11.50% growth to reach at Tk. 4,010.16 million as compared to 3,597.02 million of 2007. In the domestic market our sales increased by 10.50%. Thanks to our reorganized and mirrored sales team strategy improving doctors' coverage and winning brand building strategies that have better positioned the company in the minds of the doctors and other healthcare professionals. Owing to our focused strategy to widen our international penetration, we have, in 2008 achieved export sales of Tk. 170.60 million- a significant 39% growth over Tk. 122.75 million of 2007. During the year we entered into seven new markets namely, Chile, Nicaragua, Guatemala, Kiribati, Solomon Island, Afghanistan and Macau. Besides, 45 new products have been registered in 10 different countries. BPL entered into a Long Term Arrangement (LTA) with Global Supply Division (Copenhagen, Denmark) of United Nations Children's Fund (UNICEF), for product supply. In early 2009 we have also entered into another Long Term Agreement (LTA) with Asthma Drug Facility (ADF), a project of the International Union against Tuberculosis and Lung Diseases to supply our Inhaler products. We believe, with completion of currently ongoing registration process of our products in different international markets and certification of our facilities by different international regulatory bodies, BPL shall be able to increase its export considerably and establish itself as a truly global company that it so long cherishing for.

Profit Performance

In 2008 the company achieved a pre-tax profit of Tk. 714.12 million registering 78.67% growth over Tk. 399.68 million of 2007. The earning per share (EPS) of the company also improved to Tk. 4.33 from Tk.2.80 in comparable terms. Both the gross and net profit rates have improved in 2008. Impressive sales performance and its consequent leverage effect significantly contributed to achieve our profit target. We also very successfully combated the rising prices of materials caused mainly due to volatility in the international prices of petroleum products throughout 2008. Credit goes to our effective supply chain management, successful pricing negotiation both at the back and front end and profit focused sales strategies that made it happen.

Working Capital and Letter of Credit Limit

I mentioned in my last year's report that the working capital facilities extended by our banks were lagging far behind the pace of growth the company has achieved over the years. Particularly our Letter of Credit (LC) limit was too inadequate to accommodate the real business needs. Due to macro-economic and political environment prevailing at that time, the solution we negotiated with the bank could not come to its logical conclusion. I am pleased to inform that we very successfully trounced this problem in early 2008. Both our working capital and LC limit facilities have been increased which although not enough but have significantly eased the problems we were earlier facing. However, we are negotiating with our banks for further enhancement of the working capital facilities in line with the business growth.

International Certification

One of the milestone achievements of 2008 was certification of our facilities by International Regulatory Authorities. During the review period, among others, BPL received approval (GMP Clearance) from Therapeutic Goods Administration (TGA), Australia for its new Oral Solid Dosage (Tablet, Capsule), and the Metered Dose Inhaler and Spray manufacturing facilities. BPL is the first Bangladeshi company to receive this regulatory approval from TGA, Australia through a stringent facility audit process. During the year we also received GMP Certification from Gulf Central Committee for Drug Registration, Executive Board of the Health Ministers' Council for GCC states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates).

Revaluation of Assets

As notified to you earlier, a revaluation of the Land, Building and Plant and Machinery as at 31st December 2008, was carried out by S F Ahmed and Company, Chartered Accountants and Valuers. A surplus aggregating Tk. 1,711.17 million resulting from such revaluation has been reported in the financial statements as "Revaluation Surplus".

Credit Rating

Credit Rating Information and Services Limited (CRISL) a Bangladeshi Company having Joint Venture with Rating Agency Malaysia Berhard, Malaysia and JCR-VIS Credit Company Limited, Pakistan has assigned A- (Pronounced as Single A minus) rating in the long term and ST-3 rating in the short term to Beximco Pharmaceuticals Limited. The rating was awarded in July 2008.

Dividend

I am pleased to inform that the board of Directors has recommended 10% cash and 20% stock dividend. The mix of cash and stock dividend is expected to give enhanced real benefit to the shareholders.

Projects and Expansion Programs

We have completed our project to build facilities to manufacture Small Volume Parenterals (SVP), Opthalmic and Nebulizer Soultions as per plan. This has added further diversification to our existing portfolio. We are now in the final stage of launching of these products in the market. You are aware that we have so far installed two out of five lines of our newly built USFDA standard Oral Solid Dosage (OSD) facility. This facility is strategically important to realize our export potential and requires immediate completion of the remaining three lines. This is particularly important as numbers of internationally reputed pharmaceutical companies are showing keen interest to use this facility to manufacture their products. Present capacity of the plant is too inadequate to accommodate their requirements. We have therefore planned to complete the project on priority basis. Our HFA-based world class Metered Dose Inhaler (MDI) facility has already drawn international attention. Owing to increased demand for the MDI products, we initiated a project to set up 10 million unit capacity plant. The work of the project is in progress. To strengthen the backward linkage of the industry and to add further value, we have planned to expedite setting up of the Ranitidine API plant. This project has got captive market demand from local manufacturers of pharmaceutical products as well as good export potential.

Issuance of Shares and Warrants to GEM Global Yield Fund Limited (GEM)

We express our sincere gratitude to you for approving our proposal in the extra-ordinary general meeting held on 18th February 2009, to raise additional capital of Taka 4,600 million through private placement of ordinary shares and issuance of warrants to GEM. As we communicated to you earlier, the funds raised by issue of placing shares and warrants shall be used to finance our diversified investment plans and working capital.

Appointment of Managing Director

I am pleased to inform that Mr. Nazmul Hassan MP, the Chief Executive Officer has been inducted in the Board of Directors and has been appointed as Managing Director of the company. The appointment came into effect from 7th of May 2009. I am confident that his new role as a member of the board will bring about further dynamism in the operation and functioning of the board. His proven leadership will steer the company to a newer height. Before I conclude, let me re-emphasize that your company is destined to flourish both in domestic as well as in the international arena. The success achieved so far has given us the strong foothold needed to march forward. The secret behind the success is the collective effort of the sincere and dedicated employees of the company and the invaluable support of the bankers, suppliers, government agencies, healthcare professionals, customers and everyone the company interacted with in conducting its business. Most importantly, we are grateful to our valued shareholders who have placed so much trust and confidence on this company to bring it to its current position. I want to end on a note of thanks to all concerned and look forward for the continued support and cooperation in the future as well."

For further enquiries please visit www.beximco-pharma.com or contact:

Beximco Pharma

Nazmul Hassan, CEO

MD. ASAD ULLAH, FCS, Company Secretary

Tel: +880 2 861 9151, ext.2080

Libertas Capital

Jakob Kinde / Anthony Rowland

Tel: +44 (0)20 7569 9650

Financial Dynamics

Jonathan Birt / Susan Quigley

Tel: +44 (0)20 7269 7169

Notes to Editors

About Beximco Pharmaceuticals Limited

Founded in 1976 and based in Dhaka, Bangladesh, BPL manufactures and sells generic pharmaceutical formulation products, active pharmaceutical ingredients and intravenous fluids. The Company also manufactures and markets its own branded generics for almost all diseases. The Company also undertakes contract manufacturing for multinational pharmaceutical companies. The Company operates from a 20 acre site in Dhaka and currently employs over 2,400 staff.

The Company's products are sold to retail outlets, medical institutions and other pharmaceutical manufacturers in Bangladesh, in regional markets such as Sri Lanka, Nepal, Bhutan, Vietnam, Cambodia and Myanmar and in other markets overseas, principally in East Africa, Pacific Island and Central American countries and South East Asia, including Singapore and Hong Kong.