Strong result and positive outlook for PharmaZen

For Immediate Release

April 6, 2009

Strong result and positive outlook for PharmaZen

Biotechnology company PharmaZen is looking forward to a strong 2009, following its excellent turnaround in 2008, spearheaded by new products and new markets.

For the 12 months ending December 31, PharmaZen reported a surplus before tax of $444,822 on turnover of $5,801,712. This compares with a before tax deficit of $660,962 on turnover of $4,470,419 for the prior period (14 months)

Shares in PharmaZen, which supplies animal and health products, are traded through the unregistered securities trading facility.

PharmaZen chief executive, Craig McIntosh, said that despite the challenging economic environment and a stubbornly high New Zealand dollar for a majority of the year, the company was able to capitalise on the groundwork of previous years.

“We successfully launched new products into our existing markets as well as opening significant new markets – both product wise and geographically.

“The most significant achievement was the commencement of sales into China of Collamex™. This product is specifically targeted to the hair care industry and not only opens up an entirely new field for us but has enabled us to enter the lucrative, but challenging, Chinese domestic market, It offers significant growth opportunities,” he said.

While sales were up in dollar terms by 30% on the previous reporting period, the increase in volume was far higher at 42%.

“This record year in terms of production is a direct consequence of the 2007 CAPEX investments in plant and equipment that has not only enabled the company to achieve these volumes but to do so without any significant increase in operating expenses.

“The drop in the New Zealand dollar was welcome relief and it would seem we are likely to enjoy a more realistic and export friendly New Zealand dollar for 2009. This will make a significant difference to profitability,” he said.

The impact to date on PharmaZen of the global economic crisis has been minimal with a uniform move by customers to reduce stock levels and a resultant change in order patterns, but the underlying demand appears to be holding up

“This reflects the nature of our market in health care. Customers are always reluctant to cease using efficacious treatments for any ailment – but particularly in the areas of joint and bone health, areas where the company specialises. “

The company is now looking to build on the Collamex success.

“Developing successful new products is always a challenge and while we are extremely pleased with what we have achieved to date we are already well advanced on some promising new projects,” he said.

The AGM will be held at the clubhouse, Otago Golf Club,
24 Balmacewen Road, Dunedin, on May 14.


ENDS

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