Lucrative ARV tender boosts Adcock Ingram’s shares
ADCOCK Ingram rose more than 6 percent on the JSE after the pharmaceutical manufacturer said it has won a 12 percent share of lucrative anti-retroviral (ARV) distributer from the government.
The share price climbed to R67 a share, up from Friday’s closing price of R65 yesterday morning.
Adcock said the tender, which is worth R1.8 billion, would be for the supply of ARV drugs to state-run hospitals for three years.
It said the distribution would commence in July.
“The company submitted bids for the triple combination products, Tenofovir/Emtricitabine/Efavirenz (TEE) and Dolutegravir/Lamivudine/Tenofovir (DLT), as well as a number of the dual and monotherapy molecules,” the group said.
Adcock Ingram’s share of the ARV tender award includes 11 percent, which equals 16.8 million packs of the 147 million packs of DLT requested in the tender, 2.8 million packs of other oral solid dosage products and 2.7 million bottles of oral solutions.
Ashley Pearce, a managing director for the Adcock Ingram prescription division, said the company was proud to have been chosen as one of the state’s partners in the fight against one of the biggest epidemics in the world.
“As a responsible South African manufacturer and supplier of ARVs, our business model is focused firmly within our ethos of adding value to life and in line with our quest to advance affordable healthcare for all South Africans,” Pearce said. “We look forward to continuing this partnership with the government, united in the fight against Aids.”
The group added that its oral solid dosage facility in Wadeville, southeast of Johannesburg, had increased the ability to manufacture and supply antiretroviral medicines to the public sector through the tender system and also meet the needs of the private healthcare market.
Ron Klipin, a senior analyst at Cratos Capital, described the ARV tenders as low margin, but high volume contracts.
“The one aspect is the scale of economies which should be helpful in filling up factory capacity,” Klipin said.
Adcock Ingram manufactures, markets and distributes a wide range of healthcare products and the company is a leading supplier to both the private and public sectors of the market.
Adcock Ingram shares closed 2.69 percent higher on the JSE yesterday at R66.75.
Meanwhile, Cipla also announced that it had won a share of the ARV tender for TEE and TLD, a combination of Tenofovir (TDF), Lamivudine (3TC) and Dolutegravir (DTG).
Paul Miller, chief executive of Cipla South Africa, said the company is proud to once again partner with the state to reduce treatment costs as they strive towards ensuring that people have access to quality, affordable treatment.
“We are extremely proud to have won this tender as we see a future where good health is expected, not for the few but for the many,” Miller said.
South Africa’s HIV programme is the biggest in the world.