Egyptian Drug Authority and Pharmaceutical Companies
Updated
Ebeco Company is one of the leading pharmaceutical companies in Egypt, with a long history of manufacturing and exporting medicines. Over the past two years, the company has benefited from therapeutic supply contracts to African countries through the United Nations and the African Union, which has led to significant growth in its revenues and profits.
Negative Impacts:
However, the company has faced some challenges in the Egyptian market over the past seven months due to the implementation of maximum price caps for medicines by the Egyptian Drug Authority. This decision has particularly affected Ebeco, as most of its profitable medicines are antibiotics and cough syrups, which are categories of medicines that have been included in the price cap.
Positive Impacts:
Despite these challenges, Ebeco has been able to compensate for some of its losses by expanding its operations into Central African markets through international export companies.
Short-Term Outlook:
In the short term, Ebeco's share price is expected to move in a trading range between 32 and 48 Egyptian pounds. This is due to investors waiting for the Egyptian Drug Authority's approval of requests from pharmaceutical companies to raise their prices.
Future Scenarios:
In case of approval to raise prices:
Share prices of all pharmaceutical companies are expected to rise significantly, in line with the percentage allowed for price increases.
This will lead to an improvement in Ebeco's financial performance and attract more investors to the stock.
In case of rejection by the Egyptian Drug Authority of requests to raise prices:
The scenario of a decline in the share price and a continued trading range is likely to continue until a new development occurs.
The company may face further challenges in the Egyptian market, which could negatively impact its financial performance.
Negative Impacts:
However, the company has faced some challenges in the Egyptian market over the past seven months due to the implementation of maximum price caps for medicines by the Egyptian Drug Authority. This decision has particularly affected Ebeco, as most of its profitable medicines are antibiotics and cough syrups, which are categories of medicines that have been included in the price cap.
Positive Impacts:
Despite these challenges, Ebeco has been able to compensate for some of its losses by expanding its operations into Central African markets through international export companies.
Short-Term Outlook:
In the short term, Ebeco's share price is expected to move in a trading range between 32 and 48 Egyptian pounds. This is due to investors waiting for the Egyptian Drug Authority's approval of requests from pharmaceutical companies to raise their prices.
Future Scenarios:
In case of approval to raise prices:
Share prices of all pharmaceutical companies are expected to rise significantly, in line with the percentage allowed for price increases.
This will lead to an improvement in Ebeco's financial performance and attract more investors to the stock.
In case of rejection by the Egyptian Drug Authority of requests to raise prices:
The scenario of a decline in the share price and a continued trading range is likely to continue until a new development occurs.
The company may face further challenges in the Egyptian market, which could negatively impact its financial performance.
Trade active
The latest thing that was expected was that the Authority would approve the decision to increase prices, and this would be in the interest of the entire drug sector. We will notice a strong recovery in the EGX70.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.