Vietnam’s pharmaceutical market continues to be a lucrative industry, evidenced by the huge profits reaped by leading drug makers in this year’s first nine months, despite increasingly fierce competition from foreign rivals.

Imexpharm (IMP), with foreign shareholders such as Balestrand Limited, Franklin Templeton Investment Fund’s (FTIF) Templeton Frontier Markets Fund, and Kwe Beteiligungen AG, has pulled in VND250.7 billion ($11.36 million) in net revenue during this year’s third quarter, up 16.5 per cent on-year.

The solid July-September results contributed to a 16.5 per cent rise in the firm’s nine-month net revenue on-year, totaling VND750.84 billion (US$34.12 million) for Vietnam’s fourth-largest pharma firm.

IMP gained VND29.12 billion (US$1.32 million) in profits during the period, up 26.27 per cent on-year, thus increasing its nine-month profit figure by 40 per cent.

IMP’s performance is attributed to its strong focus on key products. IMP-made products account for 86 per cent of the total revenue.

The drug maker expects that the upcoming bidding package for EU-GMP (good manufacturing practices) will further raise its year-end profits.

“We are aiming for revenue growth of 15-18% in the 2017-2021 period, while growth in terms of profit is set at 12-15%,” Nguyen Quoc Dinh, chairman of IMP, told VIR.

The year’s first three quarters were also good for Vietnam’s third-largest domestic drug maker Domesco (DMC), which has Abbott Laboratories as its biggest stakeholder with a 51.7 per cent equity stake.

DMC generated  a net profit of VND157.9 billion ($7.17 million) on net revenue of VND947.84 billion ($43 million) between January and September, up 23.8 and 5.8 per cent on-year, respectively.

In the third quarter, the firm produced net revenue of VND336.66 billion ($15.3 million), up 10.22 per cent on-year, with its profit that reached VND51.1 billion ($2.32 million), up 10.07 per cent on year.

These profit bumps came on the back of decreased selling expenses and lower corporate governance fees. In addition, financial expenses decreased as well during the period, DMC said in a financial statement sent to the State Securities Commission in late October.

Boasting a nationwide network of 12 distribution subsidiaries and 24 branches, Vietnam’s biggest publicly traded drug maker, Hau Giang Pharmaceutical JSC (DHG), made a net revenue of VND3.11 trillion ($141.36 million) in the first three quarters, up 20.54 per cent on-year.

Although the drug maker saw tepid profits in this year’s third quarter, this did little to damper its yearly profits, which jumped 225 per cent on-year to VND537.27 billion ($24.42 million).

DHG currently has Taisho Pharmaceutical Holdings (24.5 per cent) and FTIF Templeton Frontier Markets Fund (10.55 per cent) as its foreign shareholders. DHG aims to increase its net revenue by 15 per cent per year to reach over VND6.6 trillion ($300 million) by 2020.

Amid mounting competition in the over-the-counter channel, Vietnam’s biggest drug makers are venturing further into the profitable prescription drug segment, which is currently dominated by multinational corporations.

Together with growing interest among European investors, more influential Japanese firms have expanded into the lucrative Vietnamese pharmaceutical market, anticipating its growing potential and the increasing spending power of local consumers.

Vietnam is likely to see strong business and investment activities from multinational corporations in the future, driven by the enforcement of the EU-Vietnam Free Trade Agreement, which is expected to enter into force in 2018.

VIR