Pharmagen Limited (Hereinafter referred to as “the Company” or "Pharmagen" or “PL”) was incorporated in Pakistan on November 24, 1990, as an unquoted Public Limited Pharmaceutical Company.

The Company began its commercial operations in 1990 and has since evolved into a leading pharmaceutical manufacturer with a state-of-the-art production facility designed in full compliance with Good Manufacturing Practices (GMP). Over the years, PL has demonstrated consistent organic growth, strategically expanding its operations and diversifying its product portfolio to address the dynamic needs of the healthcare market. Through continuous investment in quality, innovation, and technology, the Company has earned a strong reputation for excellence, reliability, and commitment to improving patient outcomes. Today, PL stands as a trusted and respected name within the pharmaceutical industry, recognized for its dedication to developing high-quality,effective, and affordable healthcare solutions.

The Company is engaged in the manufacturing and sale of Active Pharmaceutical Ingredients (APIs) products. Over the years, PL has established itself as Pakistan’s leading API producer and a trusted supplier to both multinational and local Pharmaceutical Companies. The Company’s modern manufacturing facility, located on Lahore–Kasur Road and spread across approximately ~8 acres of land, is equipped with advanced technology and operates in compliance with stringent quality and safety standards. PL successfully completed a major capacity expansion project for Paracetamol API, further strengthening its production capabilities and supporting the growing domestic and export demand. Looking ahead, PL is actively pursuing EDQM (European Directorate for the Quality of Medicines) certification — a milestone that will enable the Company to access new international markets, particularly within the European region. This strategic initiative reflects PL’s long-term vision of becoming aglobally recognized Pharmaceutical manufacturer known for quality, reliability, and innovation.

PL’s ownership structure reflects a strong foundation of family and strategic institutional shareholding. The family of Mr. Parvez Hussain serves as the principal shareholder group, holding ~44% of the Company’s total shares. The family of Mr. Shamim Ahmed represents the second-largest shareholder group, with an ownership stake of around~30%. In addition to these major holdings, Mr. Rahim Khan Trust / Kashmir Education Foundation retains asignificant ~15% ownership interest, underscoring the Company’s association with reputable institutional partners.The family of Mr. Rasheed Khan holds an additional ~7% stake, while the remaining ~4% of shares are distributed among other minority investors. This diversified yet cohesive ownership structure reflects PL’s stable governance framework and long-term commitment to sustainable growth and strategic collaboration.

The Company’s ownership structure remains stable, supported by the active participation of the second generationof the founding family in key management roles. Among them, Mr. Usman Hussain Sufi (Son of Mr. Parvez Hussain Sufi), currently serving as Head of Marketing, has emerged as a dynamic leader and is widely regarded as a potential successor to guide the Company into its next phase of growth. His involvement reflects the family’s continued commitment to the strategic direction, values, and long-term vision established by the founders. To ensure seamless leadership continuity and strengthen organizational resilience, it is recommended that PL formulate a formal succession plan. Such a framework would establish clear processes for leadership transition, executive development, and talent retention—thereby ensuring that the Company’s growth momentum, operational stability, and strategic vision remain uninterrupted. Implementing a well-defined succession plan will not only safeguard PL’s legacy but also reinforce stakeholder confidence in its governance and long-term sustainability.

PL’s ownership structure embodies a combination of strong business acumen, strategic foresight, and a steadfast commitment to sustainable growth. The inclusion of shareholder of SAMI marks a significant milestone in PL’s evolution. This partnership brings with it a wealth of industry expertise, operational excellence, and strategic insight, enriching PL’s governance framework and decision-making capabilities. The infusion of SAMI’s knowledge and experience complements the existing ownership’s long-term vision, creating a powerful synergy that enhances PL’s ability to navigate complex market dynamics, drive innovation, and pursue new growth avenues. Together, this balanced mix of seasoned leadership and fresh perspectives positions PL to further strengthen its competitive advantage, expand its market presence, and reinforce its standing as a trusted leader in Pakistan’s Pharmaceutical Industry.

The Company’s sponsors exhibit considerable financial strength, underpinned by their diverse investments acrossmultiple sectors and a well-established financial profile. This financial robustness not only provides stability but also enables the sponsors to support strategic initiatives and growth opportunities effectively. A key milestone in their expansion strategy was the acquisition of Moringa Pharmaceuticals (Pvt.) Ltd. in 2017, a move designed to strengthen their foothold in the Pharmaceutical Sector and broaden their product portfolio. Despite the strategic intent behind this acquisition, Moringa Pharmaceuticals is currently facing financial challenges and has yet to reach its breakeven point. The difficulties stem from various operational and market factors that have impacted the subsidiary’s profitability. Nevertheless, the sponsors remain committed to addressing these challenges through active management and targeted interventions aimed at turning around the Company’s performance. Importantly, the sponsors’ overall financial stability and diversified investment base provide a solid foundation that supports PL’s ongoing growth and resilience. Their ability to leverage financial resources, combined with strategic oversight, positions PL well to navigate industry fluctuations and capitalize on emerging opportunities in the competitive Pharmaceutical landscape. This financial backing is crucial in sustaining long-term investments in innovation, capacity expansion, and market development, ensuring the Company remains competitive and poised for future success.

PL’s Board of Directors comprises ~11 members, reflecting a balanced mix of family representation and independent professional expertise. The Board includes three representatives from the sponsor family, while the remaining members represent other prominent business families and diverse professional backgrounds. This composition supports effective oversight, constructive deliberations, and informed decision-making. Going forward, the voluntary adoption of the Code of Corporate Governance may further strengthen the Company’s governance framework by enhancing transparency, accountability, and stakeholder confidence, while aligning governance practices with evolving best standards.

PL’s Board of Directors include members from the family of Mr. Shamim Ahmed, a highly respected entrepreneur with substantial investments in the Pharmaceutical sector. His business acumen and industry insights bring valuable perspective to the boardroom, particularly in navigating market dynamics and identifying growth opportunities. The executive leadership includes Mr. Parvez Hussain Sufi, the Chief Executive Officer, and his son, Mr. Usman Hussain Sufi both of whom play active roles in steering the Company’s operations and long-term strategy. The remaining board members serve in non-executive capacities, ensuring a balanced governance structure that promotes independent oversight and accountability. Each board member is a seasoned professional with deep-rooted experience in the Pharmaceutical industry. Their collective expertise supports robust governance, informed decision-making, and strategic foresight—keypillars that drive PL’s continued success and commitment to excellence.

PL’s Board of Directors has taken a proactive step in strengthening its governance framework by establishing an Audit Committee composed of three members. This committee plays a critical role in overseeing the Company’s financial reporting, internal controls, and compliance with applicable professional and regulatory standards. Its presence reflects PL’s commitment to maintaining transparency, accountability, and ethical financial practices. However, beyond the Audit Committee, the Company currently does not maintain any other board-level committees. This presents a valuable opportunity for the sponsors and leadership to further enhance PL’s corporate governance by considering the formation of additional specialized committees. Establishing such committees would not only broaden the scope of board oversight but also promote more focused and informed decision-making across key areas of the business. It would align PL more closely with global best practices and reinforce its reputation as a forward-thinking, well-governed enterprise.

The Company's External Auditors, Kreston Hyder Bhumji & Co. Chartered Accountants (QCR-rated & belongs tocategory A of SBP) expressed an unqualified opinion on the financial statements for the year ended June 30, 2025. Audit of FY26 is underway. 

PL has established a sound and clearly defined organizational structure, segmented into eight specialized functional departments. Each department is led by experienced professionals who bring deep domain expertise and a commitment to operational excellence. This well-structured organizational framework enables PL to operate with precision and agility. By clearly delineating responsibilities and fostering cross-functional collaboration, the Company is well-positioned to achieve sustainable growth, drive innovation, and respond effectively to evolving market demands. The departments include: 1) Quality Assurance – Ensures that all products meet stringent quality standards and regulatory requirements, safeguarding consumer trust and product integrity. 2) Operations –Manages day-to-day manufacturing and logistical activities, optimizing resource utilization and ensuring timely delivery. 3) Technical – Oversees product development, process engineering, and technical innovation, driving continuous improvement and efficiency. 4) Marketing & Sales – Develops strategic market positioning, customer engagement, and revenue generation initiatives to expand PL’s market footprint. 5) Finance – Handles financial planning, budgeting, and reporting, ensuring fiscal discipline and supporting strategic investments. 6) Information Systems – Maintains and enhances the Company’s digital infrastructure, enabling data-driven decision-making and operational agility. 7) Human Resources & Administration – Manages talent acquisition, employee development, and organizational culture, fostering a productive and motivated workforce.8) Internal Audit – Provides independent oversight of internal controls and compliance, reinforcing transparency and accountability across all functions.

Mr. Parvez Hussain Sufi has been at the helm of PL since its inception, serving as both Managing Director and Chief Executive Officer. With an illustrious career spanning nearly ~46 years, he brings a wealth of experience and strategic insight to the organization. Over the past ~28 years, Mr. Pervez has successfully led and managed a range of industrial ventures, with a particular emphasis on the Pharmaceutical and healthcare sectors—areas in which he has developed deep operational and regulatory expertise. A distinguished professional, Mr. Pervez is a fellow member of two prestigious institutions: the Institute of Chartered Accountants in England and Wales (ICAEW) and the Institute of Chartered Accountants of Pakistan (ICAP), both since 1976. His dual qualifications reflect a strong foundation in financial stewardship and corporate governance, which have been instrumental in shaping PL’s growth trajectory. Under his visionary leadership, PL has cultivated a high-performing management team composed of seasoned professionals, many of whom have been with the Company for decades. This continuity has fostered a culture of trust, institutional knowledge, and operational excellence—key drivers of PL’s sustained growth, resilience, and industry reputation.

PL has established a Business Development Committee, which includes Company directors and heads of departments (HODs). This committee plays a key role in driving strategic growth initiatives and business expansion.To further improve the efficiency and effectiveness of operational decision-making, PL should consider forming additional management committees focused on specific functions or cross-departmental collaboration. Each department within the Company has a well-defined management hierarchy consisting of multiple levels. This structured approach ensures smooth communication, clear accountability, and streamlined operations across all areas of the business.

PL has successfully implemented a custom-built, web-based Enterprise Resource Planning (ERP) system called Vintage Pro ERP. This system is deployed across both the head office and manufacturing facilities. It was specifically designed to meet the Company’s unique operational requirements and integrates key business functions such as procurement, inventory management, production planning, sales and distribution, finance, and human resources. By using Vintage Pro ERP at all major operational sites, PL ensures real-time, centralized access to critical data. This seamless connectivity improves communication and coordination between departments. The system significantly reduces manual processes, minimizes data silos, and enhances the accuracy and consistency of information across the organization. The ERP system has delivered several important benefits. It has enhanced operational efficiency by automating workflows and streamlining processes, resulting in faster turnaround times and increased productivity. Management now has access to real-time data and reporting, which supports more informed and timely decision-making. Additionally, the system improves inventory and supply chain management by providing better tracking of raw materials and finished goods. This helps reduce stockouts, overstocking, and waste. Financial control has also been strengthened, as the integrated finance modules ensure accurate tracking of transactions, budgeting, and regulatory compliance. Being web-based, Vintage Pro ERP offers scalability and flexibility, allowing the system to be easily upgraded or expanded to support future business growth and changing operational needs. Overall, the implementation of Vintage Pro ERP reflects PL’s commitment to digital transformation and operational excellence. It enables the Company to respond effectively to market changes, regulatory demands, and customer expectations within the competitive pharmaceutical industry.

PL upholds a stringent commitment to quality control, a cornerstone of its operations in the highly regulated Pharmaceutical industry. The Company’s quality assurance protocols are thoroughly designed to ensure that every product meets the highest standards of reliability, safety, and efficacy. These protocols are aligned with both local regulatory frameworks and international compliance benchmarks, reflecting PL’s dedication to delivering trusted healthcare solutions and maintaining public confidence. Complementing its quality systems, PL has instituted a robust Internal Audit function that plays a pivotal role in reinforcing governance and internal controls. This function reports directly to the Audit Committee of the Board, ensuring independence and transparency inoversight. In a strategic move to enhance audit integrity and professional rigor, PL has outsourced its internal audit operations to EY Ford Rhodes Chartered Accountants, a member firm of the globally recognized Big Four accounting firms. This partnership brings world-class audit practices, impartial evaluation, and deep industry expertise to PL’s internal control environment. Together, these frameworks reflect PL’s unwavering commitment to operational excellence, regulatory compliance, and ethical business conduct—key pillars that support its long-term sustainability and reputation in the pharmaceutical sector.

Pakistan's API industry remains at a developing stage, with only a limited number of local manufacturers producing APIs at a commercial scale. Domestic production is estimated to satisfy less than 15% to 20% of national API requirements, while over 80% to 90% of raw materials and APIs are imported, primarily from China and, to a lesser extent, India and other markets. This high dependence on imported inputs exposes the pharmaceutical sector to foreign exchange volatility, supply chain disruptions, and pricing pressures. The Drug Regulatory Authority of Pakistan (DRAP) and policymakers continue to encourage local API manufacturing through supportive policy initiatives; however, greater investment in technology transfer, research & development, and strategic international partnerships remains critical to improving self-sufficiency and reducing import dependence. Multinational pharmaceutical companies operating in Pakistan generally source APIs and certain finished products from their global parent networks, whereas local manufacturers rely on cost-competitive international suppliers for raw materials. Pakistan's pharmaceutical industry remains one of the country's key manufacturing sectors, comprising approximately 700+ pharmaceutical manufacturing units, including around 20 to 30 multinational companies. The sector fulfills roughly 70% to 90% of domestic medicine requirements through local production, while the balance is met through imports of finished pharmaceutical products. Despite strong formulation capabilities, the industry continues to depend on imports for more than 90% of its API requirements, underscoring the need for local backward integration.  Market concentration remains significant, with the largest pharmaceutical companies accounting for a substantial share of industry revenues and sales. Established local manufacturers continue to dominate the sector, supported by extensive distribution networks, strong brand portfolios, and growing manufacturing capabilities. Furthermore, Pakistan's pharmaceutical market offers considerable long-term growth potential, supported by a population exceeding 240 million, increasing prevalence of chronic diseases, rising healthcare awareness, and expanding health coverage initiatives. Per capita healthcare expenditure remains relatively low compared with regional peers, indicating substantial room for future growth. In addition, large segments of the rural population continue to have limited access to healthcare services and pharmaceutical products, creating significant opportunities for market expansion through improved healthcare infrastructure, wider distribution networks, and enhanced access to essential medicines.

The Active Pharmaceutical Ingredient (API) manufacturing sector in Pakistan remains relatively underdeveloped,with limited infrastructure and investment in local production. As a result, many Pharmaceutical Companies have shifted their focus toward importing and trading APIs rather than producing them domestically. This reliance on foreign sources not only increases costs but also exposes the industry to supply chain disruptions and regulatory complexities. In this context, PL stands out as one of the few companies actively engaged in domestic API manufacturing. Its commitment to local production gives it a distinct competitive edge in a market where most players depend heavily on imports. By investing in API manufacturing capabilities, PL is not only reducing dependency on external suppliers but also contributing to national healthcare resilience. This strategic positioning places PL in a strong trajectory for sustained growth and market leadership. As demand for locally produced APIs continues to rise—driven by cost efficiency, supply chain reliability, and evolving regulatory preferences—PL is well-equipped to capture a larger share of the market. Its ability to offer high-quality, locally manufactured APIs aligns with both industry needs and national priorities, reinforcing its role as a key player in Pakistan’s Pharmaceutical ecosystem.

As per management accounts of FY26, total revenue declined to PKR 13,317 million during the year, compared to PKR 16,380 million in the preceding year. Overall revenue growth remained subdued, primarily due to a decline in global Active Pharmaceutical Ingredient (API) prices, which resulted in corresponding reductions in domestic selling prices. Despite stable demand for key products, the lower pricing environment exerted pressure on the Company's topline performance. The Company's product portfolio continues to exhibit a high degree of concentration, with its top five products accounting for approximately 89% of total sales. While this concentration highlights the strong market position, brand equity, and sustained demand for PL's core product offerings, it also increases exposure to product-specific and market-related risks. In this context, continued efforts toward portfolio diversification will be important to strengthen revenue resilience, broaden growth opportunities, and support long-term business stability. Looking ahead, PL remains well-positioned to capitalize on future growth opportunities.

Management accounts of FY26, indicates that PL's gross profit margin improved significantly to ~11.0%, compared to ~7.2% in FY25. This improvement reflects a stronger cost structure and enhanced efficiency in managing production-related expenses, despite the challenging market environment. Similarly, the operating profit margin increased to ~7.7% from ~4.5% in the previous year, indicating improved operational performance and effective cost management. The expansion in operating margins demonstrates the Company's ability to maintain disciplined control over administrative and selling expenses while supporting business operations and growth initiatives. Furthermore, the net profit margin rose to ~3.9%, compared to ~1.1% in FY25. The improvement at the bottom line was driven by stronger operating profitability and a more favorable overall earnings profile during the year. Collectively, these margin expansions highlight PL's improved financial performance and its ability to enhance profitability despite ongoing cost pressures and a dynamic business environment.

PL’s earnings outlook is poised for improvement, supported by the stabilization of the exchange rate and ongoing capacity enhancements across key production facilities. The expansion of the Penicillin, Cephalosporin, and Multi-purpose plants has enhanced the Company’s ability to meet rising market demand while improving operational efficiency. Additionally, the Paracetamol plant expansion has played a pivotal role in diversifying PL’s revenue streams, contributing positively to overall sales growth and reducing reliance on a concentrated product mix. To further reinforce financial performance and strategic planning, it is essential to implement a structured monthly and quarterly performance review mechanism. This should be complemented by the development of robust and prudent financial projections, enabling more accurate forecasting, disciplined budgeting, and informed decision-making. Together, these measures will enhance PL’s financial agility and position the Company for sustained profitability and long-term growth.

PL finances its working capital requirements through a combination of internally generated cash flows and short-term borrowings. During FY26, the Company's reliance on external funding decreased, as short-term borrowings declined significantly to  PKR 168 million from PKR 293 million in FY25. This reduction reflects improved liquidity management and a stronger ability to support operational requirements through internal cash generation. The Company also demonstrated enhanced working capital efficiency during the year. Net working capital days improved to 51 days in FY26, compared to 53 days in the previous year. This improvement was primarily driven by a reduction in inventory holding days, indicating more effective inventory management and better alignment between production and sales activities. Despite the lower level of short-term borrowings, PL continues to maintain adequate access to financing facilities to meet its working capital requirements when needed. This financial flexibility is supported by a manageable short-term trade leverage ratio of  41% in FY26, compared to 35% in FY25. While the increase in leverage reflects greater utilization of trade-related funding sources, the overall level remains within a comfortable range and does not indicate any material pressure on the Company's short-term liquidity profile. Overall, the Company's improved working capital management, reduced dependence on short-term debt, and continued access to funding sources support its operational flexibility and strengthen its ability to efficiently manage day-to-day financing needs.

As per management Accounts of FY26, the Company reported a significant improvement in Free Cash Flow from Operations (FCFO), which increased to  PKR 887 million in FY26, compared to PKR 276 million in FY25. The stronger cash flow generation reflects enhanced operating performance and improved conversion of earnings into cash, providing greater financial flexibility to support working capital requirements, capital expenditures, and other business needs. The Company's interest coverage ratio remained strong during the year, reaching ~12.8x in FY26 compared to ~3.2x in FY25. This substantial improvement indicates a significantly enhanced capacity to meet interest obligations through operating profits and reflects the Company's strengthened earnings profile. The higher coverage level also provides an additional cushion against potential fluctuations in financing costs or operating performance, supporting the overall stability of the Company's financial risk profile. Overall, the improvement in cash flow generation and debt-servicing capacity underscores PL's strengthened financial position and its ability to maintain adequate liquidity while supporting future growth initiatives.

As of FY26, the Company's debt profile remained predominantly concentrated in short-term borrowings, which accounted for 99% of total debt, compared to 98% in FY25. This composition reflects PL's continued reliance on short-term financing facilities to support its liquidity and operational requirements while maintaining financial flexibility. Despite the concentration of borrowings in the short-term segment, the Company continues to maintain a highly conservative capital structure. PL's leverage ratio, measured as total debt relative to equity, declined significantly to 2% in FY26 from 9% in FY25. The substantial reduction in leverage was primarily driven by lower outstanding debt levels and reflects the Company's prudent approach to balance sheet management. The improvement in capitalization metrics highlights PL's commitment to financial discipline and risk management. A lower leverage profile enhances the Company's financial flexibility, reduces exposure to financing risks, and strengthens its capacity to absorb potential market or operating challenges. Furthermore, the strong equity base and minimal reliance on debt provide a solid foundation to support future expansion plans and investment initiatives, while preserving the overall stability of the Company's financial position.