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Investor Relations

Objectives

The Rekah Group is very active in the Israeli pharmaceuticals market and has vast experience in the main segments of the health market. The group’s extensive experience in the fields of development, manufacturing, marketing, distribution and sale of pharmaceuticals, vitamins and health products is a unique essential asset which enables it to implement a long-term growth strategy while maintaining its relative advantage in Israel’s generics market.
Rekah strives to ensure access of each and every individual to essential pharmaceuticals and health products, of the highest standards and at affordable prices. Consequently, the Group intends to develop and expand its line of products; to develop product innovation; to promote a healthy lifestyle in Israel; to expand its activities to overseas markets; and to establish the Group’s position as a central and professional pharmaceuticals industry in Israel, while meeting the strictest of standards and offering maximal value to its customers, business partners and shareholders.
The Group believes that the main road to significant medium and long range growth is through its in-depth involvement in the field of research and development (with an emphasis on product innovation), and by building infrastructure that suits the expansion of its activity to overseas markets.
To make this vision a reality, the Rekah Group has set itself a number of main objectives for the short-term:

  • Expanding its production capability in order to meet the demand for the Group’s products.
  • Expanding the marketing and sales capabilities while focusing on and specializing in the Group’s core fields.
  • Establishing and expanding the “Derech Haim” brand, while entering new activity fields related to this brand.
  • Expanding the sales of Rekah’s main products in the private market (OTC and dermo-cosmetics) while strengthening the Group’s marketing and sales capabilities in these fields.
  • Establishing activity in the field of vitamins in the private market (pharmacies and natural product stores) in Israel.
  • Entering new marketing, sales and distribution activity - through additional representation agreements and import agreements for pharmaceuticals and medical preparations.
  • Focus and Reorganization - With an emphasis on leading the Group’s synergetic processes, streamlining production processes and reducing satellite activities that are not profitable.


Strategies

Two main objectives were defined as infrastructure processes for the Group’s strategy for the mid-range:


Leading the Group’s R&D, on two channels:

  • Generic Research - Development of advanced and complementary products in the production of the division’s core fields (OTC and RX).
  • Unique Research - identification, research, development, and commercialization of innovative medications that rely on innovative new combinations, reformulations and expanding the indications for existing medications.


Creating infrastructure for export with an emphasis on:

  • Modifying the production process for products that can be exported.
  • Registering the Group’s products in foreign markets.
  • Promoting cooperation with foreign pharmaceutical companies and distributors.


The Group’s marketing strategy relies on its ability to create a diverse and attractive basket of products and services for Israel’s pharma market. Such a basket would combine consumer goods (OTC, dermo-cosmetics, toiletries) at affordable prices with a series of brands sought out by the Israeli consumer. Long term relations with pharma customers in Israel as well as high sales capability will serve as the Group’s additional growth engine for the coming years.
In addition to this strategy, the Group is promoting its short and mid-range objectives.
The group is increasing its production capability and modifying the production departments in order to meet international standards that will enable the regular supply of all the demand for the Group’s products in the Israeli market and its future marketing overseas.
Moreover, the Group is working to strengthen cooperation with overseas companies (know-how acquisition, import agreements, registering products) and to promote unique generic research and development in order to accelerate the Group’s R&D processes based on strategic targets that were set.
The Group also promotes organizational changes, in order to ensure maximum efficiency and to adapt the work processes to the Group’s strategic targets and growth directions.
Concurrently, the Group examines business opportunities for the acquisition of existing pharmaceutical manufacturing plants in Israel and overseas (particularly in Europe and the U.S.), in order to accelerate the process of expanding the product portfolio and to strengthen the export capability of the existing production, marketing and distribution platforms.
In the event that business opportunities are made available to the Group in the future, it will consider raising capital from various sources, including fundraising through additional IPOs.
Note that the processes of obtaining the aforementioned authorizations and registration of the products are long and complex and their outcome is dependent upon the relevant authorities overseas to a large extent. Moreover, even if all the relevant authorizations are received, the Group must locate buyers, marketers and/or distributers for its products in the said markets and adapt their production capability by purchasing equipment and expanding infrastructure.

Investment Plan

The Rekah Group has a modular investment plan that reflects a number of alternatives based on the availability of the capital at the Group’s disposal in the next five years.
The following are the main investments planned in the production division for 2013-2016:

  • Adapting the production infrastructure to changes in the regulatory environment and preparing the infrastructure for exporting the Group’s product overseas
    The Group adapts its production departments to meet international manufacturing standards. These modifications will enable the registration and marketing of the Group’s pharmaceuticals and products on the U.S. and European markets.
    To this end, the Group is expected to invest in the enhancement of the appropriate ERP - information management systems, assimilation of quality assurance and control and advanced manufacturing methods, writing procedures and documents, adapting the production portfolios to the European standard (CTD Format).
    These processes will require investment in the field of information systems, quality assurance and the registration and regulation department.

  • Expanding the Production Capability
    Due to the increase in demand for the Group’s products, the regulatory changes and preparing the infrastructure for the export of the Rekah Group’s products overseas, the Group intends to invest in the expansion of the production capability in the following fields:
    1.Antibiotics Department:: Separation between the penicillin department and the cephalosporin department. This separation is required to ensure that the Binyamina plant continues to meet Good Manufacturing Practice – GMP and meets the local demand for the production division’s products in these areas. Consequently, the construction of 4 designated production lines is scheduled, which will enable the continuous production of the division’s antibiotics, with a considerable expansion of its production capability. The plans are in the process of receiving authorization from the Ministry of Health and the group expects their implementation to commence during the course of 2014.
    2.Sterile Production Department: Ophthalmology - In light of the change in the regulation specifications, the Group is expected to upgrade the sterile production department in the field of ophthalmology. The process is also expected to expand the division’s production capability in the field and to enable future export of the department’s products. The Group has begun to implement the upgrade process in this field and is scheduled to complete the process during the course of 2014.
    3.The Designated Tablets Production Line: The Group is promoting steps toward upgrading the dedicated tablets line, which serves for production of one of the division’s core products. The process will enable the Group to meet the regulation conditions and the future export of the product to overseas markets.
    4.Promoting the mechanization process: In some of the division’s departments, it is possible to expand the production capability by upgrading the existing equipment, purchasing state-of-the-art equipment with faster production capabilities, and through automation of the manual functions. The Group has taken these steps during the past few years and intends to continue this process in the coming years. The process is expected to lead to the expansion of the division’s production capability, conservation of resources and enhancing operational efficiency.

  • Upgrading Research and Development Capabilities
    Accelerating the Group’s development processes and new development agreements requires the expansion of the R&D infrastructure. As part of this process, a designated R&D laboratory is planned, as well as the recruitment of additional personnel for the R&D Department and the establishment of a registration and regulation department that specializes in the Group’s fields of development.

  • Upgrading the Registration and Regulation Capabilities
    In the coming years, the Group intends to set up the infrastructure necessary for expanding its activity overseas. This process, in addition to the changes in the field of regulation in Israel, requires the expansion of the Group’s registration and regulation capabilities. Consequently, the Group intends to establish a designated registration and regulation department which will specialize in regulation changes, coordinate the process of registering the Group’s portfolios in Israel and overseas, accompany the division’s research and development processes (unique and generic), and assist with the process of registering the Group’s import portfolios.

  • Upgrading the Information Systems
    The Group intends to enter a multi-year plan to assimilate new computerized systems in the production division (ERP). The process is expected to be spread out over a number of years and, in its initial stages, will include the characterization of needs, definition of work methods and internal procedures as infrastructure for the characterization of the future computerized system. Concurrently, the Group plans to assimilate information management systems (business intelligence) that will enable improvement in the division’s work processes and in operation efficiency. This expansion will increase the plant’s production capability, its ability to receive international authorizations and the possibility of expanding the Group’s product marketing to overseas markets.
    The information featured in this paragraph and in the following paragraph forecasts the future as defined in paragraph 32a of the Securities Law and is offered in accordance with the Group’s assessments that are based on the data currently available to the Group. There is no certainty that this assessment will indeed come to fruition due to the dependence upon factors and circumstance that are not related to the Group, such as: dependence on the demand for the Group’s products, exposure to risk factors, availability of capital for investment, etc.

 

Financial Report

Financial Report 2013/H1

Financial Report 2012

Link to MAGNA

Investor Presentation 2014

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