Litha is the only JSE-listed pharmaceutical company that has invested in vaccine production capacity‚ through its joint venture with the government‚ called Biovac.
At present‚ Biovac imports vaccines‚ but it expects to begin manufacturing its own by the end of next year. If the technology transfer agreement goes ahead‚ it expected to be able to manufacture pandemic and seasonal flu vaccines by 2015‚ said chief executive Selwyn Kahanowitz.
It already has technology transfer agreements for several other vaccines‚ including one that protects infants against six different childhood diseases.
Litha reported a disappointing set of results for the six months to end June‚ as higher than expected demand for vaccines was not enough to offset a slump in sales of medical devices and the costs associated with integrating the newly acquired Pharmaplan into its pharmaceutical division.
Headline earnings per share dropped 3% to 11,5 cents.
A change in accounting due to the de-consolidation of Biovac meant the group realised a once-off profit‚ and thus operating profit doubled to R238-million. Excluding this once-off item‚ operating profit decreased by 12%.
Kahanowitz said Litha's biotech division saw strong demand for rabies and flu shots during the period under review. The government had bought 800 000 doses of flu‚ as it embarked on a drive earlier this year to get more people vaccinated ahead of winter flu season‚ he said.
Turnover in the biotech division was up 14% to R734-million‚ while operating profit rose 126% to R52-million‚ without the effect of the once-off profit from deconsolidation.
The medical device division was hit by the loss of key contracts for some expensive products‚ and a delay in the government announcing its forensic tender.
Turnover in this business unit fell 31% to 133-million‚ and operating profit plunged 58% to R25-million‚ once the effects of the deconsolidation were stripped out.
The pharmaceutical division saw turnover rise 61% to R82-million‚ but operating profit fell 13% due to the business costs of the Pharmaplan merger‚ once the effects of the deconsolidation were removed.
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