OREANDA-NEWS. Pharmstandard OJSC (LSE: PHST IL, RTS: PHST RU) reports 1Q14 Sales Results.

In 1Q14, Pharmstandard sales reached RUB7,471 million demonstrating RUB1, 673 million or 18%y/y decrease (compared to RUB9,114 million in 1Q13).

Pharmaceutical products and medical equipment accounted for 98.7% and 1.3%. of the Company's total sales, respectively.

Pharmaceutical products

Pharmaceutical sales reached RUB7,371 (-17%/-RUB1,493m), with organic sales accounting for 61.6% and third party products (“TPP”) for 34.8% in the pharmaceutical sales mix.

Organic pharmaceutical sales amounted to RUB4,603 million (-17%) vs RUB5,539 million in 2013 with 65.8% accounted for by OTC products and 34.2% by RX products.

Organic prescription product (Rx) sales grew 5.8% to reach RUB1,575 million. Key growth drivers were Phosphoglive® (25% of RX revenue in 1Q14; +82%/RUR177m), Octolipen®(+48%) and Formetine®(+42%).

Organic over-the-counter (ÎÒÑ) product sales reached RUB3,027 million showing a decline of 25% (RUB1,022 million). In 1Q14 Arbidol® demonstrated a drop of 58/% vs 1Q13 (RUB597million). The decrease of organic OTC product revenue was mainly driven by the unprecedented absence of pandemia for almost 2 seasons in a row which caused a significant revenue decrease in portfolios of antivirals, immunostimulants and symptomatic products, as well as corresponding therapeutic categories on the market overall. A brief overview of market retail sales will be available further in the text and in the presentation for the conference call which will be uploaded to our website.

TPP sales went down to RUB2,600 million (-15.2%) vs RUB3,067 million in 2013.

Production localization. 7 Nosologies Federal Program.

TPP sales decrease in 1Q14 is directly attributed to production localization segment decline due to lack of government purchases via public auctions under 7 Nosologies Federal Program. This particularly relates to the decrease in sales for Infibeta®(-RUB201m), Coagil®(-RUB279m) and Mabthera®(-RUB147m) that accounted for 76% of the total TPP sales a year before. The rest of the products within this segment demonstrated sales growth totaling 53% segment growth EXCLUDING Infibeta®, Coagil® and Mabthera®. The 2014 demand for these three products as well as Velcade® exceeds the 2013 demand bringing us positive outlook for this segment in 2014 (a close-up slide will be available in the presentation for the conference-call).