Vanc Pharmaceuticals (NPH:TSXV) was up for its 4th consecutive day in a row Tuesday as this healthcare stock continues to see consolidation in its market.
Vanc Pharmaceuticals: generic drug market in 2015
Vanc Pharmaceuticals began building momentum in late-2014 and exploded in value in early 2015.
The company has a bold goal: to provide Canadians with affordable Generic Pharmaceuticals and OTC Health care products and consequently become one of the Canada’s leading suppliers of Generic Pharmaceuticals and OTC Health care products.
While the pharmaceutical industry gets huge press in the US, as baby boomers age in North America, interest and activity in Canada’s pharmaceutical sector is increasing. I touch on some key metrics driving the pharmaceutical industry below…
Vanc Pharmaceuticals traded 3.1 million shares yesterday, worth over $1.5 million, to close at $0.48 per share.
Vanc Pharmaceuticals has traded more than 20 million shares between $0.43 and a $0.60 per share thus far in May. After soaring to a 52-week high of $0.94 in mid-March of 2015, its shares have been consolidating.
Vanc Pharmaceuticals – 1 Year Chart
The company reported in a March 12th press release that:
“The Company expects initial inventory for 30 generic molecules to be delivered in early Q2-2015 and will commence manufacturing on the OTC products in Q2-2015 as well.”
Click here to read more.
Research and Markets, published a report on the Global Generic Drugs Market 2014-2018. In the description the sector’s CAGR is outlined along with key drivers. Below is a short excerpt:
“The analysts forecast the Global Generic Drugs market to grow at a CAGR of 11.02 percent over the period 2013-2018. The patent expiry of top-selling drugs is one of the major drivers contributing to the growth of this market.”
source: http://www.researchandmarkets.com/research/msf27f/global_generic
Generic Drug companies fight for Pipeline
When it comes to the growth of many pharmaceutical companies in the generic drug game, mergers and acquisitions are a core strategy.
Through acquisitions vendors can gain access to new drugs and grow sales rapidly. Earlier this year, we published an EBook outlining 50 of North America’s top small-cap buyouts and the management behind these buyouts.
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In Canada it can be easy to forget just how large the pharmaceutical industry is as most headlines go to the resource sector or banking. Action in the US pharmaceutical industry should act as a precursor and warning of things to come in Canada.
In October 2013, Actavis acquired Warner Chilcott plc for approximately US$8.5 billion; this is just one example of a rapidly growing and consolidating industry that is not afraid to spend.
In a March 31, 2015 article titled The “New Era” in Healthcare: Buyouts, Financial Engineering Instead of Innovation, Wolf Richter relays some potent information on the healthcare sector in the US:
“Revenues of healthcare companies in the S&P 500 grew by 10.8% last year, according to FactSet, by far the fastest-growing sector. In Q1 this year, revenues are expected to grow 9.1%, and for the whole year 6.9%. Earnings for the year are expected to soar nearly 16%.”
And that:
“In 2014, pharmaceutical companies set a record of $212 billion in acquisitions. So far this year, the sector is on track to blow out that record. The sector has already announced $89 billion in mergers, up from $56 billion in Q1 2014.”
Finally, Richter comments that:
“And it’s short on new blockbuster drugs. So they’re on a shopping spree to consolidate the industry and weed out competition. They’re borrowing records amounts of nearly free money, made readily available by the Fed and other central banks for just that purpose, and they’re buying other drug makers at these record prices.”
Click here to read more.
It is difficult to find a sector more robust than the pharmaceutical industry from a merger and acquisition standpoint in the US currently.
VANC Pharmaceuticals reported at the end of its May 4th press release that:
“As a part of the sales and marketing strategy the Company has hired a Manager of Sales and Marketing, who has over 15 years of experience as a Pharmacist with a multi-chain pharmacy. The Company anticipates ramping up the sales team with additional hiring’s during Q3-2015.”
Click here to read more.
Vanc Pharmaceuticals is hoping to capitalize on this trend of consolidation by expanding on its own suite of generic drugs in Canada.
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