Indies Pharma Under the Weather After Melissa’s Hit

• Pressed by softening revenues and swelling costs, Indies Pharma Jamaica Limited (Indies) reported a sharp 70.7% fall in earnings to $21.76Mn for the first quarter ended January 2026(Q1 2026).
• Quarterly revenues totalled $279.84Mn, marking a 14.0% drop compared to the same period last year, as Hurricane Melissa swept away expected gains and dampened revenue growth in November and December. However, some resilience was seen in less affected areas.
• Cost of sales fell 7.3% to $98.41Mn; however, this was not enough to offset weaker revenues, resulting in a 17.4% decline in gross profit to J$181.4Mn and a 254-basis point contraction in gross margin.
• Operating profit declined by 44.9% to $55.54Mn, leading to 1114bps contraction in EBIT Margin to 19.8%. This was largely due to a 7.7% increase in administrative costs to $130.70Mn
• On the other hand, finance costs surged 86.5% during the quarter. This increase was driven by interest costs associated with the $1Bn raised at 9.5% in FY2025 to retire a $805Mn bond that previously carried a 7.5% rate.
• Despite near-term pressures, the company’s growth outlook is supported by the recent FDA approval Regadenoson injection, a pharmacologic stress agent used in myocardial perfusion imaging. The drug has entered production and is poised to enter the market by the start of the next quarter.
• Overall, the integration of these drugs into the US market is expected to support strong business growth and serve as a major earnings driver. Additionally, the company is also actively researching to identify new generic drugs to introduce into the US market.
• Indies’ stock price has increased by 4.8% since the start of the calendar year. The stock closed Tuesday’s trading session at $2.99 and currently trades at a P/E of 29.9x, which is above the Junior Market Health Sector Average of 20.4x.

(Sources: JSE& NCBCM research)