Financial Reports
Year-end report 2016
OPERATIONS
Stronger platform for continued growth
The very strong rate of growth during the latter part of 2014 and 2015 has, as expected, slowed down during 2016. However a 10% growth in sales was achieved, based on the higher level that was created in 2015. For the full year 2016, net sales were SEK 311.6 (283.2) million, of which SEK 63.2 (91.5) million in the Nordic region, SEK 135.7 (101.2) million in Northern Europe, SEK 105.3 (84.9) million in Southern Europe and SEK 7.4 (5.7) million in Rest of World. The increase in sales has been fueled by markets outside the Nordic region, like Spain, Germany, Ireland, UK and Austria, while sales in the Nordic countries fell during the period. Sales in the Nordic countries fell due to such things as price volatility and delivery problems for a number of important products.
For several of the company’s important products, stock shortages occurred and this had a negative impact primarily during the second half of the year. Besides the loss of sales and lower gross profit, non-delivery also results in penalty fees, in accordance with current contracts, which has a negative impact on profitability. Delivery problems for these products have been dealt with and there is no expectation that it will impact earnings in the future, beyond what is considered to be part of normal operations. Profitability was also positively affected by the earnings impact related to prior years, which made it possible to maintain gross margin at a high level.
Investments in continued growth
During the year, ongoing evaluations of the business were made, resulting in newly identified growth opportunities as regards both new subsegments and expansion into new markets. Efforts were also made to fortify the sales organization with additional expertise and experience, with particular emphasis on the company’s operations in Northern Europe, including the markets in the Nordic region. Our assessment is that we currently have a strong organization in place that has extensive knowledge of both local regions and markets.
With the aim of ensuring successful product launches and maintaining a competitive supply chain, the company initiated efforts during the year to add a new contract manufacturer, which will be implemented during the coming year.
Bluefish also made additional investments in IT systems that support marketing, quality and finance activities, all of which is aimed at strengthening the platform for continued growth.
Optimization of the product portfolio
Market approval was obtained during the period for the company’s second product that was developed in-house, Acetylsalicylic acid Bluefish. This is an uncoated tablet version of aspirin developed primarily for the Swedish market. It is used there as a preventive medicine for patients at risk of developing blood clots. The company now has two products developed in-house that are in the launch phase, Hydroxyzine Bluefish and Acetylsalicylic acid Bluefish. Both are progressing as planned.
Besides the two products developed in-house that will be launched in 2017, four new licensed products will be launched during the year and an additional three existing products will be launched in new markets.
During 2016, Bluefish signed its first outlicensing agreement, which was for Hydroxyzine. Product outlicensing provides the company with opportunities to create sales in markets where Bluefish does not have its own operations. Launch of the product is expected sometime during the 18-24 months subsequent to signing the agreement.
The composition of the product portfolio in each market is critical to the company’s future growth and profitability. The expected earnings potential of products is also continually evaluated. Thus, the company continued investing in new product licenses and development projects. At the rate that Bluefish grows and gains market share, we become noticed as a potential partner by companies offering unique products. Investments are made selectively and only in the markets where Bluefish believes there is high potential in terms of both sales and profitability. During the second half of the year, the product portfolio grew with the addition of two licensed products for a diverse number of markets. In total during the year, five new products were added to the portfolio, along with starting up two new development projects. Current products that are now in the registration phase are expected to be launched during 2017 and 2018.
FUTURE OUTLOOK
In 2017, the company expects an increase in sales growth compared to the prior year. Going forward, sales growth will primarily be fueled by the sales of newly launched products, along with the effects of efforts made during the current year, i.e. identified subsegments, a fortified sales organization and focus on delivery performance. Sales growth is also expected to contribute to higher profitability compared to the full year 2016.
For more information, contact
Karl Karlsson, President & CEO Bluefish Pharmaceuticals
Tel. 46 8 519 116 00
Email: karl.karlsson@bluefishpharma.com
Susanna Urdmark, CFO Bluefish Pharmaceuticals
Tel. 46 8 519 116 00
Email: susanna.urdmark@bluefishpharma.com
About Bluefish Pharmaceuticals
Bluefish has undergone significant international expansion since the company was founded in 2005. Bluefish focuses on the development, manufacture and sale of generic pharmaceuticals. The company conducts marketing operations in a large number of European markets and is expanding into territories outside Europe. The product portfolio consists of a total of approximately 80 products and is growing.
www.bluefishpharma.com