Summary

  • Beximco Pharmaceuticals Ltd. (DSE:BEXIMCO, CSE:BEXIMCO) was founded in 1976 and started its operations in 1980.
  • The company launched its formulation brand in 1983.
  • With an 8.39% market share (based on profit), the company is now holding the third position in the pharmaceuticals industry in Bangladesh.
  • Approximately 4,700 people work at Beximco Pharma and the company has a presence in more than 80 countries. The export earnings of Beximco Pharmaceuticals Ltd. amounted to 32.46 million dollars in the 2018-19 fiscal year.
  • Beximco pharma is the first-ever pharmaceutical company from Bangladesh to explore the US market in 2016.
  • The company has made its share market debut in 1985 by getting listed in Dhaka Stock Exchange (DSE).
  • The company acquired an 85.22 percent stake of Nuvista Pharma in 2018 and a 54.6 percent stake of Sanofi Bangladesh in 2021.
  • Beximco Pharma has reported BDT 370.60 crore profit in the first nine months of FY21
  • The company has achieved the Global Generics and Biosimilars Awards 2021 in the category of Company of the Year, Asia Pacific.

Company Overview

Beximco Pharmaceuticals Ltd. is one of the leading drug manufacturers and exporters in Bangladesh. Based in Dhaka, the company is a part of Beximco Group and playing an active role in the pharmaceuticals industry of the country. The company was founded in 1976 and started its operation in 1980.1 The company started mbeximco logoanufacturing its own products under proper licensing in 1980 and prior to that it used to import products from Germany and USA. In 1983 the company launched its own formulation brands and put a step ahead in the journey.

Currently, the company is holding the third position in the pharmaceuticals industry of Bangladesh with an 8.39% market share (based on profit).2 Its major competitors are Square Pharmaceuticals (16% market share), Incepta (10.21% market share), and Opsonin (5.54% market share). Right now, Beximco Pharma employs more than 4,700 people. The company is currently producing 300+ generic medicines. The company’s portfolio includes antibiotics, analgesics, anti-diabetic, respiratory, cardiovascular, dermatology, gastrointestinal, and more.

Beximco Pharmaceuticals Ltd. has a presence in more than 80 countries and it has expanded its global consumer base through exporting in some highly regulated markets in the last decade. In 2018-19 fiscal year, the export earnings of Beximco Pharmaceuticals Ltd. amounted to 32.46 million USD - the highest among other companies in the country that year. Moreover, Beximco pharma is the first-ever pharmaceutical company in Bangladesh that has explored the US market in 2016. The company has also introduced the world's first generic remdesivir for Covid-19 treatment in 2020.

Beximco Pharma has made its share market debut in 1985 by getting listed in Dhaka Stock Exchange (DSE). Currently, the company is also listed on Chittagong Stock Exchange (CSE) – second of the two stock exchanges of the country, and Alternative Investment Market (AIM) at London Stock Exchange.

The company has a mission to enhance human health and well-being through providing contemporary and affordable medicines while maintaining global quality standards. Moreover, the company has a vision of becoming the most trusted, admired, and successful pharmaceutical company in the region. Beximco is determined to attain this standard through strengthening research and development capabilities and building a strong presence in the global market.

Beximco has achieved several national and international awards for its outstanding contribution to the pharmaceutical industry of Bangladesh. It is the only Company in the region that won the highly prestigious SCRIP Award as the “Best Pharma Company in an Emerging Market”3 and also the Global Generics and Biosimilars Awards 2021 in the category of Company of the Year, Asia Pacific.4

History of Beximco

The Acquisitions of Beximco Pharma

Beximco Pharma had acquired an 85.22 percent stake in Nuvista Pharma in 2018. 5 Nuvista Pharma is a leading manufacturer of hormonal drugs and steroids in Bangladesh. Nuvista Pharma was a subsidiary of Netherlands-based Organon Holding BV. in 1973 the company was incorporated as Organon (Bangladesh) Limited. Later on, Organon Holding BV divested its shares in Organon (Bangladesh) Limited to the local management, and accordingly, the name of the company was changed to Nuvista Pharma Ltd. The company manufactures different pharmaceutical products such as oral contraceptives, hormones, antihistamines, steroids, and so on. Nuvista generated 171 crore BDT in revenue, 11.8 crore BDT in profit before tax, and 54.8 crore BDT worth net assets in FY 2016-17. The 12.92 percent stake of Nuvista is owned by the Govt. of Bangladesh.

The two companies (Beximco Pharma and Nuvista Pharma)  signed a non-binding Memorandum Of Understanding (MOU) on October 5, 2017 to work through the acquisition process, which had been finalised on January 18, 2018. This is the first-ever acquisition in the history of the pharmaceuticals industry of Bangladesh.sanofi bangladesh ownership structure

Again in 2021, Beximco pharma acquired the majority stake (54.6 percent) of Sanofi Bangladesh – a multinational pharmaceutical company. In Bangladesh, Sanofi started its operation in 1958 as “May and Baker” which was renamed “Sanofi Bangladesh Ltd.” in 2013. The company had generated 388 crore BDT in revenue, 49.79 crore BDT in profit before tax, and 609 crore BDT worth of gross assets as of 2019.

The acquisition has cost Beximco Pharma up to  400 crore BDT which is the biggest takeover in the Pharma Industry of the country so far. Regarding the acquisition, Nazmul Hassan MP, managing director of Beximco Pharma, expressed that Beximco Pharma has a proper strategy to continue its diversification and expansion while establishing the company as a leading pharma company in the region. He also added that the acquisition is a part of their growth strategy. 6

Industry overview

The pharmaceuticals industry in Bangladesh was once dependent heavily on imports and multinational companies. But now the industry is growing very fast to meet 98% of the domestic demand. The remaining 2% are specialized imports like vaccines, hormone drugs, anti-cancer products and so on. The industry is also exporting to different parts of the world and posting a growth rate of 27% per year in export earnings. In 2018, the industry stood at BDT 205 billion in terms of market size with a compound annual growth rate of 15.6% for the last five years. The industry is expected to grow at a rate of 15% per year to reach $5.11 billion by 2023.

industry overview

The industry in Bangladesh has found its strengths in the 80s. Over the past 4 decades, the industry has grown to a billion-dollar industry by developing thousands generic drugs and producing other thousands patented drugs. The drugs produced in the country are divided into two parts – 80% are generic, 20% are patented drugs. Different lines of drugs are being produced in the country including Allopathic, Homeopathic, Unani, Ayurvedic, and Herbal.

types of medicines being produced in Bangladesh

Key growth drivers of the industry

Bangladesh has posted stellar economic growths in the past years until the covid-19 pandemic has come and caused a slip in the GDP growth rate. The country has achieved a growth rate of 7.28% in FY17 and 7.86%, 8.15%, 3.51% in the following financial years. According to Bangladesh Bureau of Statistics (BBS), provisional estimate of GDP for the country in FY21 is 5.47%. The country is experiencing a population growth rate of 1% every year. Per capita income of the country stands at $2,227 in FY21, an increase of $203 from previous fiscal year. Consumption expenditure of the country in FY21 is 75.83% of GDP. Domestic savings increased in FY21 to 24.17% of GDP from 23.77% of GDP a year earlier. Public and private investment together combines to 7.95% of GDP.7 Higher economic growth, increase in disposable income, population growth rate, and changes in pattern of disease are the key drivers for pharmaceuticals industry in Bangladesh. People are also becoming more aware about the facilities they can receive through the pharmaceuticals industry in the country. Apart from that changed life style, improved life expectancy, health awareness, and modern healthcare facilities cause drive in the pharmaceuticals industry.

key growth drivers of pharma industry

Porter’s five forces analysis

Porter’s five forces is a model developed by Michael E. Porter of Harvard University in 1979. The model assesses the competitiveness of an industry and the profitability of the companies given the competition.

Threat of new entrant in this industry is lower because a new aspirant in the industry will need huge capital investment and many regulatory permissions in order to start producing drugs. The brand loyalty of the customers is another factor contributing to the barrier of entry.

Threat of substitute products at industry level is low because the companies produce all types of drugs such as allopathic, homeopathic, unani, ayurvedic, and harbal. So, to cure a disease when prescribed a medicine, the consumers will have to come to the industry. But at a company-level, the threat of substitute products is high.

Bargaining power of the buyers is very low in the industry. The patients need to depend on the prescribed products by the doctors and they cannot but buy the drugs at a price setup by the pharmaceutical companies. However, the government has regulations regarding prices of different lifesaving drugs. But those are often not up to the mark for compliance.

Bargaining power of the suppliers is very high. Bangladesh imports over 90% raw materials for pharmaceutical industry worth Tk 47 billion. This makes the bargaining power of the suppliers high and the companies also remain vulnerable to external shocks. Oftentimes, the price of the drugs in the industry fluctuates due to high import costs. However, Bangladesh has laid the foundation to manufacture at least half the raw materials inside the country. Active Pharmaceutical Ingredients (API) Industrial Park is being constructed in Gazaria, Munshiganj.

Rivalry among the top players in the industry is very high. About 68% of the market is controlled by top 10 companies. For a generic medicine class all the companies have a brand which competes against each other in the market.

Financial performance

Beximco Pharmaceuticals Ltd. has made BDT 370.60 crore profit in the first nine months of the 2020profit performance of Beximco-2021 financial year which is a 41.28% increase from the same period of the last year (BDT 262.31 crore).8 The company’s Earnings Per Share (EPS) for the 2020-2021 financial year was BDT 8.23, while it was 5. 84 in the last year. The net profit of the company in the last quarter of 2020-2021 financial year was BDT 147 crore while it was BDT 90.92 crore for the same period last year. Beximco Pharma’s net asset value (NAV) was BDT 82.28 for the year ended on June 30, 2021, while it was BDT 79.78 last year.9 The company has provided BDT 12.50 dividend in 2018, BDT 15.00 in 2019, and BDT 15.00 along with a 10% stock dividend in 2020. The company’s dividend yield was 1.80 percent in 2019 and 2.17 percent in 2020. Moreover, its payout ratio was 20.05% and 17.30% in 2019 and 2020, respectively.

The Covid-19 pandemic has evidently brought fortune for Beximco Pharma. The company has generated BDT 1,440 crore total sales in the first half of the 2020-2021 financial year which shows a 15.2% increase in sales from the previous year. And this year the sales have increased more. In the first quarter of the 2021-2022 financial year, the company has reported BDT 847 crore sales as against BDT 693 crore in the same quarter last year.

Share market activities

In 1985, Beximco Pharma started its share market journey by getting listed on Dhaka Stock Exchange (DSE). In 1995, the company got listed on Chittagong Stock Exchange (CSE) – the second stock exchange in the country. It is the only company in Bangladesh that was able to raise funds from an overseas stock market. In 2005, as the first-ever company from the country, Beximco Pharma got listed at Alternative Investment Market (AIM) of London Stock Exchange. The company sells GDRs (global depositary receipt) only in the Alternative Investment Market (AIM) of London Stock Exchange. The company’s paid-up share capital consists of 446.11 million ordinary shares of BDT 10 each which includes Shares listed with local Stock Exchanges of Bangladesh (346.07 million, 77.58%) and underlying shares against the GDRs (one share against each GDRs) listed on AIM(100.04 million, 22.42%). The company’s last trading price was BDT 206.10 on 09 December, 2021. Beximco Pharma has declared a 35 percent cash dividend to its shareholders for the financial year 2020-2021, while its major competitor Square Pharmaceuticals Ltd. has declared a 60 percent cash dividend for the same period.10

Recent events

Beximco Pharma is the first-ever company in Bangladesh that got permission to hit the American market, the largest and one of the most lucrative pharmaceuticals markets in the world. The company got permission to export products from the US Food and Drug Administration (FDA) in November, 2016. The company has been awarded as one of the top taxpayer companies from the Large Taxpayer Unit of NBR (National Board of Revenue) for the financial year 2020-2021. In July, 2021, the company has received FDA (US Food and Drug Administration) approval for a muscle relaxant medicine, Baclofen. And with this approval, the company will be exporting its ninth product fully developed in-house and successfully approved for the US market.11 Amid the Coronavirus pandemic, Beximco Pharma’s investment has grown exponentially. The company has invested BDT 1,000 crore in establishing  ‘Unit III’ solids, semi-solids, and liquids facilities in Tongi as of September, 2021. The project is expected to end by this year and the company expects that the project will be proved profitable for Beximco Pharma in the upcoming days. 

  1. ^ https://www.beximcopharma.com/about-us
  2. ^ https://businessinspection.com.bd/pharmaceutical-industry-of-bangladesh/
  3. ^ https://m.theindependentbd.com/post/126524
  4. ^ https://www.daily-sun.com/magazine//details/587994/Beximco-Pharma-wins-Global-Generics--Biosimilars-Awards
  5. ^ https://www.thedailystar.net/business/beximco-acquires-85pc-nuvista-1557673
  6. ^ https://www.dhakatribune.com/business/2021/10/02/beximco-pharma-completes-acquisition-of-a-majority-stake-in-sanofi-bangladesh-limited
  7. ^ https://mof.portal.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/f2d8fabb_29c1_423a_9d37_cdb500260002/10.%20Chapter-01%20Eng%20Eng-21.pdf
  8. ^ https://www.dhakatribune.com/business/stock/2021/04/29/beximco-pharma-reports-41-profit-in-march-for-fy21
  9. ^ https://thefinancialexpress.com.bd/stock/beximco-pharma-posts-47pc-growth-square-14pc-in-net-profit-1635046169
  10. ^ https://www.tbsnews.net/economy/stocks/8-companies-declare-dividends-2021-319171
  11. ^ https://www.beximcopharma.com/newsroom/news-Details/beximco-pharma-receives-us-fda-approval-for-muscle-relaxant-drug-baclofen
Tags: BD:BEXIMCO
Created by MD. TOUHIDUL ISLAM on 2021/12/06 03:22
     

Become a Contributor

If you follow a company closely and would like to share your knowledge, we would love your contributions. Register Now and start editing!

Recently Modified

This site is funded and maintained by Fintel.io