Despite ultimate declarations of David Ebsworth for operative results in 2011, some of his statements are very economic on truth, at least what is concerned Russian “success”.
Statement #1
David Ebsworth reports 44 per cent growth in sales of Ferinject calculated in number of doses each 100 mg iron. Economizing on information of absolute sales volume in units of 100 mg iron, David Ebsworth does not leave any room for any analytical evaluation of his statement.
However, the fact of importing of 30.001 units of 100 mg in Russia in second half of 2011 for total amount for more than USD 1,5 million and then leaving almost all of them unsold on stock of local partner is not reported by David Ebsworth. There is not any evidence to believe that the “Russian import on stock” is not included in Ferinject “44% volume growth” shown in operative results for 2011.
Statement #2
It is worth to note that David Ebsworth is using different criteria and parameters in order to show positive results of the Group forcing stock and bank analysts to compare eggs with apples.
In case of Venofer sales we admit that David Ebsworth is operating with strongly manipulated data, at least, with that of Venofer sales in Russia.
According to Pharmexpert data based on Russian Customs Reports total amount in 2011 imported Venofer has been 189.760 packs of 5 ampoules each 2 ml. Venofer contributes more than 80% in volume of local sales in Russia.
Not showing in details our strong mistrust in what David Ebsworth says, we would like to comment on the following points:
1) Amount of Venofer units sold in Russia in previous best years has not exceeded 100.000 units.
2) New local partner of Galenica AG in Russia has overestimated Russian market capacity for Venofer and has imported in a short time (QIII 2010 - QI 2011) about 250.000 units – 2,5-year demand for Russia.
3) Venofer has been offered in Russian pharmacies and hospitals for about of RUB 1.000,00 (approx. USD 30,00) making 3 times reduction on local currency if compared with average import price of more that USD 105,00 declared by customs clearance.
4) According to Russian distributors of iron preparations Venofer has lost any hospital tender in Russia to the competing products if the offered price has been less than RU 1.800,00.
We leave further comments for stock and bank analysts.
Statement #3
David Ebsworth reports more than 102% increase of sales of Maltofer in terms of local currency. Once again this is another attempt to speculate on figures.
In 2010 and 2011 Galenica has imported in Russia in total 1.855.800 packs of Maltofer for total value more than USD 13 million. IMS Data for 2011 (for more details on sales see the publication “Retrospective sales analysis”) show average quarterly sales of Maltofer products about USD 620.000,00.
It should be quite obvious for David Ebsworth to expect that by importing of more than 5-year demand of Maltofer in Russia the operative results will show “excellent growth”. Here we allow to ourselves a sarcastic joke as David Ebsworth talks about “excellent results” in Russia without any shadow of shame.
Inherited habit of David Ebsworth to use different evaluation parameters to present Galenica “success” in the best way gives one a very little confidence that reported data are accurately presented and his all statements are truth. It seems that a desire to show “double digit growth” every year is very enduring and makes for him a sense to report delivered on stock products as sold. In the business circles such practice is called “over invoicing” and allows to report better results than they are in reality.
We have more confidence in the documents in our possession and import data of Russian Customs from reports of Pharmaexpert.
Russian market of iron preparations is rapidly changing. We expect new partition of market shares in 2013 mainly because launches of new intravenous iron preparations are planned. These new products will be competing mainly Ferinject and Venofer.
New iron products will be marketed by a team with a long-term experience in this segment of the market. This is new situation while marketing of Venofer copies in the past has been managed by teams without any experience in marketing of iron preparations in Russia.
