The Henderson-based pharmaceuticals manufacturer says Covid hasn't put a brake on growth. Photo / 123RF
The Henderson-based pharmaceuticals manufacturer says Covid hasn't put a brake on growth. Photo / 123RF
Kiwi drug manufacturer Douglas Pharmaceuticals has shaken off Covid-related disruptions to sales and supply chains and is doubling down on expansion plans.
According to companies office filings, shareholders of the privately owned pharmaceuticals manufacturer tipped $10 million into the firm late last month. The company is wholly owned by afamily trust associated with the firm's late founder, chemist Sir Graeme Douglas.
Douglas' managing director Jeff Douglas, son of Sir Graeme, told the Herald the capital raise was to help finish construction of a $35m research and development facility at the company's headquarters in Henderson and fund clinical trials.
The under-construction $35m research and development extension to Douglas Pharmaceutical's headquarters in Henderson is expected to be finished in August 2021.
The company was founded in 1967 as a pharmacy, but in the 80s began developing and manufacturing over-the-counter and prescription pharmaceuticals and consumer healthcare products.
The company employs 800 staff, largely in West Auckland, but also across offices in Fiji and the United States.
The capital raise, valuing shares in the firm at $1000 each, gives the company a nominal valuation of $510m, but Douglas was unwilling to entertain discussion of the firm's value or any possibility of sale.
"You'd only find that out if you put it on the market," he said. "And at this stage we're not interested in selling the company."
The pharmaceutical and healthcare sector has been largely insulated from - and occasionally even turbocharged by - the economic carnage caused by Covid. The past six months has seen Fisher & Paykel Healthcare become the country's largest listed company.
Off-market, Australian private equity firm Archer Capital was last month given permission by the Overseas Investment Office to sell Palmerston North-based New Zealand Pharmaceuticals to the ICE Group in Boston. While a sale price was not disclosed, OIO approval is only required for sales valued at over $100m.
Jeff Douglas, the managing director of Douglas Pharmaceuticals, says his company has overcome the initial challenges of Covid and is tracking to increase revenue for the year.
Douglas said while Covid had thrown up numerous challenges this year - "It's been a bit of a troublesome time for the world," he said - the company was likely to see a repeat of the 5 per cent increase in revenues seen in the last financial year.
"We're about on the same trajectory for this year, slightly ahead of target at this stage. We're quite pleased with the results to date."
The company did not receive any support from the Government's wage subsidy, he said. "We didn't qualify, thankfully."
For the 2019 financial year Douglas' website said it made $235m in sales.
He said issues over collapsed air freight routes to export markets and reduced retail sales at pharmacies during periodic international lockdowns had been managed by shifting to shipping and the passage of time.
"Air freight was the most difficult problem to deal with. We mainly dealt with that by shifting to shipping, and talking to customers to get them to think differently about their sales forecasts.
"Our sales to China of our Clinicians brand, they plummeted, but have now bounced back."
The late Sir Graeme Douglas with his son, and now Douglas Pharmaceuticals managing director, Jeff in 2012 at the company's laboratories in Henderson. Photo / Greg Bowker
Douglas is also chairman of the NZ-based Covid-19 Vaccine Corporation, a public-private partnership that joined the global race to find a way to inoculate populations against Covid.
"At the moment I'm told it's looking promising, but we've still got a long way to go. We're trying to get some extra funding for development, which is proving difficult," he said.
The company's family trust shareholders have also been major philanthropists in recent years, most notably with a $9m donation to Starship - the largest single gift to the national children's hospital - in 2018.
Accounts for the family's charitable arm - the Douglas Charitable Trust, a distinct entity from Douglas Pharmaceutical - filed to the charities register show the ripples from Covid were unlikely to reduce its flow of donations.
