Sopharma Starts Dual Listing As 2011 Profits Are Squeezed

CFW View: Sopharma's successful transition from a domestically focused drugmaker to a substantial exporter of pharmaceuticals to Eastern and South Eastern Europe underlines its potential for continued revenue and profit growth, which is supported by elevated demand for drugs in its targeted export markets. We highlight Sopharma's favourable Eastern European exposure, particularly the key markets of Russia and Ukraine, which dominates its exports. In the short-term, Sopharma's dual share price listings are likely to be driven by wider macroeconomic factors in Europe, as investors continue to reassess the region's risk profile, rather than company performance. We believe weak October and November 2011 sales results may be indicative of a wider slowing of regional drug markets, but we hold to our positive growth forecasts for late 2011 and 2012.

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