Dechra profits from rivals’ stock shortages

PET pharmaceuticals group Dechra has seen its revenue increase significantly in its third quarter.

In a statement covering the period from the start of the year to date, the group – which has a large operation in Shrewsbury – said trading has been strong, pointing out that it has benefited from the phasing of pre-Easter ordering in Europe and competitor stock shortages in the US.

Group revenue in this quarter (the firm’s third) increased by 14.3% at constant exchange rate (CER).

For the nine months ended 31 March 2015, revenue growth was 12.3% at CER (6.6% at AER).
 
In the third quarter Dechra’s European Pharmaceuticals Segment increased revenues by 7.3% at CER. Revenues for the nine months grew by 5.7% at CER.
 
Compared to last year, sales in Europe were positively impacted by wholesalers buying in advance of the Easter break. 

Companion Animal Products (CAP) grew by approximately 13.5% in the quarter at CER and Equine grew by 30.2% at CER. The company’s Diets franchise is also showing signs of recovery as it resolves its back-order issues following the transfer of manufacturing to a new supplier.

However, sales in its food producing Animal Products (FAP) continued to decline by 12.8% at CER in the third quarter.
 
North America sales in the quarter grew by 66.8% at CER. Revenue growth for the nine months was 67.2% at CER.
 
The revenue growth in the US is partly attributable to the recent acquisition of Phycox, the launch of Osphos, and the re-launch of two ophthalmic products following the resolution of long-term supply issues.

Dechra said the performance in this quarter has also been enhanced by strong trading in its dermatology product range, largely due to a competitor out-of-stock situation.
 
During the period Dechra established a new Polish entity and a sales and marketing team was recruited.

The company will commence trading in our next financial year.

A new Canadian entity started trading in January.

The firm has received received approval for its injection facility in Skipton, which it says is important for the future US launch of Zycortal as it will be manufactured there.

In March Dechra made an investment of US$1m into Jaguar Animal Health to potentially gain access to the EU marketing rights for its companion animal products.

“We remain on track to deliver our strategic milestones and further progress has been made in the period,” the statement said.