Pharmaceutical Stocks Perform Well on the Casablanca Stock Exchange

The values of the pharmaceutical industry sector have the wind in their sails on the Casablanca Stock Exchange. Sothema and Promopharm have achieved notable performances and suggest a bright future for the sector.

It must be said that since the beginning of the year, the pharmaceutical sector index has largely outperformed the Masi, showing, at the close of August 27th, an increase exceeding 175%, against an increase of 13.27% of the Moroccan stock market index.

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Sothema was the first Moroccan pharmaceutical company to be listed

In detail, the share price of Sothema, the first national pharmaceutical company to be introduced on the stock market in 2005, has more than doubled over the period. The value of Promopharm has for its part achieved 44.65%.

It should be recalled that the sales of Sothema, the specialist in the production and marketing of treatments under license and under own brands have increased by 6% to nearly $202 million (1.8 billion DH).

The company benefits from the good performance of the marketing of new drugs and the good dynamics of exports to increase its result by more than 11% to $26.7 million (238.2 MDH).

Promopharm is not left behind

The pharmaceutical establishment drained a turnover in the improvement of 9,7 % to $64.3 million (573,2 MDH) and a net result in progress of 15,6 % to $6.76 million (60,3 MDH).

These achievements are explained according to the market by “the counter-cyclical aspect of the pharmaceutical industry in the stock markets”, both in Morocco and internationally.

And for cause, they are incompressible expenses for the States and the households. For Sothema, the marketing of new drugs and the good dynamics of exports have boosted its turnover during the past year.

However, this is not the only factor that has led to the rise in its share price. The free allocation to its shareholders of one new share for each old share, in addition to the division by two of the unit nominal value of the shares, was well received by investors.

Such decisions are often popular at the level of the shareholders, thanks to the psychological impact and the potential improvement of the stock liquidity.

Sothema share also benefited from the contract of availability of the Moroccan State of Sothema’s aseptic filling facilities for the manufacturing of the anti-Covid19 vaccine owned by Sinopharm, which suggests a financial compensation.

As for the outlook, it is promising, thanks in large part to the resurgence of health spending by both individuals and public authorities, especially since this variant of the delta has reminded the various players of the quasi-structural nature of health risks and the significant need for investment in the health sector.

Moreover, this sector is destined to play a major role in the future given the strategic project of the generalization of compulsory health insurance which will require the strong involvement of the national pharmaceutical companies in order to accompany the increasing demand in drugs.

This will result in the extension of medical coverage to 22 million Moroccans. In addition, the Moroccan pharmaceutical sector is expected to play an important role in health diplomacy, supporting the Kingdom’s engagement with its African partners to fight against Covid-19 and improve Africa’s drug supply.

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(Featured image by geralt via Pixabay)

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First published in LesEco.ma, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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