In the first three quarters of 2010, the Nepentes Group's sales revenue reached PLN 90.9m. The Group’s operating profit was nearly PLN 8.9m, and net profit amounted to PLN 6.9m.
 

"In Q3 2010, we incurred significant capital expenditure on promotion of seasonal products and new product launches. Depreciation and amortisation increased in connection with the launch of the new plant in Chociw. We also recognised new impairment losses on inventories and a provision for holidays as a result of a change in the accounting method in that area. We also recorded higher selling costs and general and administrative expenses. All of the above factors had an impact on the Group's margins: operating and net margin stood at 9.8% and 7.5%, respectively,” said Mirosław Sygnet, Vice-President of the Management Board of Nepentes S.A. "In addition, in the first three quarters of 2010, the dermocosmetics market growth rate was well below expectations and was lower compared with the previous year. In value terms, the dermocosmetics market grew by 1%, and in volume terms - by 3%," he added.
 

In Q1-Q3 2010, export sales accounted for 18.6% of Nepentes' total sales revenue, up by nearly 5pp year on year.

"Our export sales show an upward trend, and despite weaker economic conditions in CEE countries, we have been steadily increasing the sales and the market shares of our products on our key export markets. In the first three quarters of 2010, export sales rose by 21% relative to the previous year's figure," said Mirosław Sygnet.
 

The financial statements for Q3 2010 are probably the last interim report by Nepentes addressed to the general public, closing an important stage of the Company's development, in which it was listed on the Warsaw Stock Exchange.

On October 18th 2010, the Extraordinary General Shareholders Meeting of Nepentes decided to rematerialise Nepentes shares by virtue of a resolution adopted by a 100% majority of votes. This means that the Company shares will soon be de-listed from the regulated market of the WSE.  As all Nepentes shares are held by a single shareholder, having to incur the costs related to the functioning of a public company is not economically justified.

"We can summarise the period of Nepentes' operations as a listed company with great satisfaction. We believe that the Shareholders and Investors were able to see the Company's best qualities and that it proved a good investment. In our opinion, our positive relations with Investors were confirmed by their response to the tender offer for Nepentes shares announced by Sanofi-Aventis. In the first stage of the offer, tenders were placed by the majority of the Shareholders. Thanks to that, the offer procedure was carried out efficiently and the transaction was closed at a level which satisfied all parties," said Mirosław Sygnet.
 

Acquisition of Nepentes by Sanofi-Aventis, one of the largest pharmaceutical companies in the world, gave the Company an entirely new perspective and opportunity to achieve even greater success on the domestic and foreign pharmaceutical markets.

 

 

According to IMS Health’s definition, the dermocosmetics market comprises products sold from pharmacies and registered as"cosmetics". In accordance with this definition, pharmacy sales in the first three quarters of 2010 in value terms reached PLN 1.118bn, representing a 1% increase relative to the corresponding period of 2009. However, in volume terms, in the analysed period the market shrank by 3%.

An analysis of the direct competition of Nepentes products on the dermocosmetics market revealed that after the first three quarters of 2010, the value of the market of Iwostin and Elixine products sold from pharmacies amounted to PLN 466.4m. In Q3 2010 alone, the market grew by 3.3% year on year. In Q1-Q3 2010, the market advanced by 1% relative to the corresponding period of 2009.

The sales of the Iwostin brand remained stable both in Q3 and Q1-Q3 2010.

In Q3 2010, the market of emollients sold from pharmacies expanded by 2% on Q3 2009. Over the first three quarters of 2010, the sales of emollients increased by 5% in value terms. 

In Q3 2010, the sales of Emolium rose by 5% year on year. In Q1-Q3 2010, the sales of Emolium grew three times faster than the entire emollients market - its sales grew by 16%. 

 

In Q3 2010 year on year, the OTC wholesale market  expanded by 8% in terms of sales volumes and 15.8% in value terms. The value of the market stood at PLN 1.4bn. In the same period, the sales of Nepentes' OTC products recorded an even greater increase - up by 19% in volume and 18.8% in value terms.

In the first three quarters of 2010, wholesale was 2.2% down relative to the corresponding period of 2009, whereas the value of the wholesale market rose in the analysed period by 5.8% year on year, to PLN 4.2bn. In Q1-Q3 2010, the sales the Company's OTC products decreased in volume terms by 5.4%. This was attributable to the absence of a cold season in Q1 2010 and the related drop in the sales of cold treatment products, which have a significant share in the OTC products portfolio. Sales remained unchanged compared with the previous year.

As regards cold treatment products, in Q3 2010 relative to Q3 2009, sales of Nepentes' brands grew faster than the market (in volume terms: Nepentes - 41%, market - 27.4%; in value terms: Nepentes - 42.1%, market - 37.1%).

 

According to IMS, in Q1-Q3 2010 the dermatological drugs market advanced by nearly 1.7% year on year, to PLN 476m. The corticosteroids market is stable, but it did record both up- and downturns over the period under analysis. However, the categories in which Nepentes’ products are classified are growing in value. Drugs from the Nepentes' offering have been successfully placed among their direct competitors (containing the same active ingredients), and gained high market shares. 

In Q1-Q3 2010, despite a slight drop in sales volume by 8.6% year on year, the moderate corticosteroids market is still on a growth path in value terms. This means an improvement in sales of more expensive products, including Afloderm.

In the analysed period, sales of strong corticosteroids, including products with betamethasone as well as Beloderm, slipped by 3.7%, however, the betamethasone market alone grew by 30% in value terms, which was largely attributable to the sales of Beloderm, whose market share in value terms has already reached 20%. Another well performing product is Belosalic, with a 21.3% share in the betamethasone and salicylic acid market.

Afloderm and Vericaust (launched in Q2 2010) create a new category by themselves.

 

Nepentes S.A. is among the most dynamically growing pharmaceutical companies, focusing on delivering to the market innovative formulations and solutions in the area dermatology, paediatrics and colds. It has developed and currently manufactures the Iwostin, Emolium and Propolki brands, which are sold in Poland and in other countries of the CEE region. In addition, the business scope of Nepentes S.A. comprises the introduction and promotion of a number of internationally-recognised pharmaceutical brands, including Sudocrem, neo-angin, Melisana and Marimer.  Last year, the Company added prescription dermatology drugs to its product portfolio. Nepentes’ production plants, located in Łódź and Chociw, operate their own in-house research and development centre and are listed among the most advanced plants of the type in Central Europe.

September 2007 saw the establishment of two subsidiaries of Nepentes: Nepentes Romania and Nepentes Bulgaria, while in early 2008 Nepentes set up its own sales structures in Lithuania. The Company has also registered subsidiaries in the Czech Republic and Slovakia. 

Nepentes S.A. is a public company, listed on the Warsaw Stock Exchange since December 2007. Following a tender offer for Nepentes shares announced by Sanofi-Aventis on May 19th 2010, on August 18th 2010 Sanofi-Aventis acquired in aggregate 15,657,476 shares in Nepentes, representing 99.7% of the Company’s share capital. On September 13th 2010, Sanofi-Aventis announced a mandatory buy-out of Nepentes shares. Following the buy-out of 0.27% of the shares, Sanofi-Aventis holds 100% of the share capital and the total vote at the General Shareholders Meeting of Nepentes.
 

More information about the Company and its products is available at www.nepentes.com.