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Other Commercial Pharmaceutical Brands

Other Commercial Pharmaceutical brands is our largest revenue contributor and is largely made up of domestic brands. Emerging Markets are the key drivers of growth in this category which includes some of our most well-known prescription and OTC products.

FY17 Highlights

  • South African business successfully turned around and recorded 29% growth in the second half of the 2017 financial year
  • Positive organic growth in the Australian OTC business
  • The SSA Collaboration between Aspen and GSK which was a material component of the SSA region was terminated on 31 December 2016

Key brands

BrandTherapeutic category
MybulenAnalgesic
SalofalkGastrointestinal
SolpadeineAnalgesic
TribussARV
ZyloricUric acid production inhibitor

% of total group revenue

34%

bus-other-commerc

 2017 R’billion2016 (CER)* R’billion % change
Total14,0 13,4 4
Revenue
Sub-Saharan Africa 7,2 6,8 5
Australasia3,7 4,0 (9)
Other territories 3,1 2,6 23
• Constant exchange rate: FY16 restated at FY17 average exchange rates. Please note that all commentary is based on FY16 CER revenue in order to enhance the comparability of underlying performance.

Performance

Other Commercial Pharmaceutical Brands largely comprises domestic products, with South Africa and Australia being the most material contributors. Revenue from this category increased 4% to R14,0 billion. Adjusting for divestments and products discontinued or to be discontinued, the core of this portfolio grew 9% to R13,6 billion.

Sub-Saharan Africa

In South Africa, a strong turnaround in the second half led to a 9% increase in full year private sector revenue, while public sector revenue increased by 1% to R1,5 billion. A change in leadership along with a restructure in both the commercial and supply chain teams led to the improvement of inventory supply, with notably fewer supply constraints relative to the prior period. The benefit of two single exit price increases also impacted performance during the period.

Tribuss remained the biggest brand by value in the South African private sector. Our top four brands in the private sector, namely Tribuss, Mybulen, Foxair and Trustan reported a combined value growth of 21,9% as measured by IMS at 30 June 2017. Mybulen’s performance benefited from down-scheduling from Schedule 3 to Schedule 2 in March 2016, thus allowing access to the product without prescription.

During July 2017, the South African government announced a 12-month extension of the current ARV tender due to expire on 31 March 2018 in order to allow adequate registration time for new bidders likely to enter the next ARV tender. Aspen was awarded an increased value share of the oral solid dosage tender, effective from August 2016 (36,7% vs 32,4% awarded in the previous tender).

Australasia

Results in Australia are distorted by divestments and products which have been, or will be, discontinued. Growth in the base portfolio, which excludes the divested products, was steady at 1% with revenue increasing to R3,4 billion. The generic pipeline has been divested and we are currently developing a pipeline that will sustain the reshaped business.

The overall revenue growth in the base Australian OTC business was pleasing at 3%. Maltofer sales more than doubled year on year, in its second year since launch. Maltofer is now the second largest brand in the Australian iron supplement market.

The Prescription business delivered solid volume performance in the face of continued price erosion under Australia’s price disclosure regulations. Within the portfolio, healthy growth was seen in the insomnia treatment product Circadin.

A competitor product was registered but was unable to launch as indication patent protection applies until 2022 in respect of this product.

We aim to introduce a new high dosage Salofalk dosage form in the 2018 financial year to ensure its ongoing competitiveness.

Other territories

Latin America, Asia and the USA all delivered positive results. Latin American performance was attributable to growth in the OTC portfolio, particularly in Milk of Magnesia. Revenue in Japan was positively impacted by the launch of authorised generics from GSK and the increased use of Florinef.

Prospects

This portfolio provides favourable organic growth potential for Aspen considering its strong brand equity and excellent development pipeline to support sustained growth in attractive Emerging Markets.

South African Industry Task Groups and the South African government are being lobbied for longer tender periods (four to five years) with the intention of improving supply stability and reducing the volatility caused by the transition between tenders.

We anticipate a continuation of strong performances in certain prescription and OTC products in Australia despite the negative impact of further legislated price cuts.

We will continue to review the portfolio and look to divest products where we are not creating value. We will also seek to supplement growth through local bolt-on acquisitions and by launching line extensions of valued brands where commercial opportunities in this regard arise.