Navana Pharma forays into herbal medicine sector with Tk21cr investment

Infographics: TBS

Navana Pharmaceuticals, a publicly listed company, has decided to venture into the herbal medicine market with a fresh Tk21 crore investment.

The firm plans to establish a dedicated 10,000-square-foot division for manufacturing herbal products, according to a disclosure on the stock exchange's website on Thursday.

The setting up of the herbal division is subject to the approval of concerned regulators. Primarily it needs permission from the Directorate General of Drug Administration (DGDA).

Currently, the pharmaceutical firm operates in both human and animal health medicines, generating approximately 80% of its annual revenue from human health medicines, 17% from veterinary medicines, and 3-4% from exports.

With the fresh investment through its internal and external sources in the herbal medicines business, the company anticipates additional Tk40 crore revenue in the first year.

The herbal division is set to be completed within five years.

In 2022, Navana Pharmaceuticals raised Tk75 crore from the stock market for expanding its existing businesses, and partial repayment of bank loans.

Lorens Shamol Mollick, company secretary of Navana Pharmaceuticals, told TBS, "The medicine market is growing day by day. Some local big pharma companies are now producing herbal medicines.

"With the seeing good prospects in the future, the company has decided to invest in the herbal medicine segments."

Industry sources said the demand for herbal medicine is growing rapidly due to its lack of side effects and clinical evidence supporting its effectiveness in treating various ailments.

Big pharmaceutical companies in Bangladesh are gradually taking hold of this expanding market as people are opting for higher quality natural remedies with recognisable brand value.

At present, leading drug makers such as Square, Incepta and Acme are catering for herbal medicine.

Although there is no reliable data, the market for herbal medicine generates annual revenue of about Tk2,500 crore.

Navana Pharma financials

According to its annual reports, the revenue of the drugmaker has been growing consistently in the last five years.

From the 2020-21 to 2023-24 fiscal years, its gross revenue grew by 121%, and its net profit by 194%.

In FY24, it had reported a 20% growth in its gross revenue to Tk802.80 crore, and net profit by 13% to Tk40.46 crore.

It had paid a 14% cash dividend only to its general shareholders.

The growth in revenue and profit trajectory has also continued in the first quarter of the current fiscal year.

During the July to September quarter of FY25, its net revenue increased to Tk213.74 crore, and its profit to Tk13.37 crore. In the same period of the previous fiscal year, it was Tk163.15 crore, and Tk11.24 crore respectively. 

Exports on the rise

In FY24, it had reported an 8% growth in its export earnings to Tk25.27 crore.

According to its annual report, in the last five years, its export earnings grew by 67%.

Five years ago in the 2019-20 fiscal year, its export revenue was Tk15.13 crore.

In FY21, its export was Tk24 crore, but it declined to Tk17.64 crore in FY24. Later, its export earnings grew.

Tk11cr IPO fund expected to be used by Sep

In May last year, the drugmaker decided to redirect its initial public offering (IPO) proceeds from modernising and expanding the Small Volume Parenterals and Ophthalmics (SVPO) facility to the construction of a new Generic Production Unit.

In its extraordinary general meeting (EGM), the company also decided to extend the timeline for full utilisation of IPO proceeds to 36 months after receiving the funds, to accommodate the proposed changes in the use of IPO proceeds.

Lorens Shamol Mollick said, "The construction of the new building started before, we are very hopeful to complete using the IPO funds within September this year."

On Thursday, Navana Pharmaceuticals shares price increased by 2.21% to Tk46.20 at the Dhaka Stock Exchange (DSE).