Login | Register
Profile | Log out
logo

  • Home
  • News
  • Opinion
  • Satire
  • About
  • Contact Us
    • Contact
    • Get Covered
  • Subscribe
Submit An Article

Latest Articles

  • Miners set to tumble as Commodities take a hit
    Miners set to tumble as Commodities take a hit
    • Market Update

  • Fastest growing allied health group welcomes 16 new Partners
    Fastest growing allied health group welcomes 16 new Partners
    • News

  • Ingenia delivers despite challenges, holiday business bounces back
    Ingenia delivers despite challenges, holiday business bounces back
    • News

  • Getting taught a lesson from Doctor Copper
    Getting taught a lesson from Doctor Copper
    • Opinion

  • Novatti eyes blockchain partners following US tour to promote AUDD at top crypto conference
    Novatti eyes blockchain partners following US tour to promote AUDD at top crypto conference
    • News

  • Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield
    Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield
    • News

  • Desperate millennial bails on drinks to stay up till 12.01am and lodge tax return
    Desperate millennial bails on drinks to stay up till 12.01am and lodge tax return
    • Satire

  • Market consolidate on GDP update
    Market consolidate on GDP update
    • Market Update

  • There are no scorpions involved in this company’s latest cancer drug
    There are no scorpions involved in this company’s latest cancer drug
    • News

  • AML3D engaged by ExxonMobil for 3D printed machinery
    AML3D engaged by ExxonMobil for 3D printed machinery
    • News

Palla Pharma blamed market conditions for their collapse. How did they sink in a billion dollar market?

  • In News
  • June 9, 2022
  • Samantha Freidin
Palla Pharma blamed market conditions for their collapse. How did they sink in a billion dollar market?

Opioid based medications are paradoxical. Whilst an incredible pharmacologic solution to serious pain, opioids can be addictive with their overuse often proving detrimental.

America is often held up as the poster child for what not to do when it comes to their opioid epidemic which has seen more than 263,000 people die from prescription opioid overdoses between 1999 and 2020, leaving a big question for policymakers and medical professionals as to how we fix the epidemic without leaving chronic pain patients behind. 

The answer may lie in alternative analgesia prescribed to combat post operative pain. New developments in the analgesia market have seen a marked decrease in opioid prescription rates, especially in the US. A report released by the American Medical Association (AMA) revealed a 44.4% decrease in opioid based medicine prescriptions in the past decade. 

The UK and Australia have seen similar trends with safe opioid prescription and pain management at the forefront of doctors’ and regulators’ agendas. This trend may have been the nail in the coffin for Palla Pharma (ASX: PAL), one of three licensed poppy processors in Australia, creating finished medicines from opiate based Narcotic Raw Material. 

Collocated in Australia and Norway, the Company had an international reputation for high quality products at competitive prices. Their reputation looks a little different now after entering voluntary administration in December 2021.

The embattled company cited COVID impacts on elective surgery volumes as the reason behind declining sales. That being said, there is still a booming market for opioid analgesia with the global market size at a whopping USD $4.4 billion in 2020, and growing. 

After ironing out the finer details with administrators for several months, the Company has today provided an update to shareholders deeming their shares worthless. “The Liquidators declare there are reasonable grounds to believe shareholders will not receive a distribution,” the announcement reads. Ouch. 

The decision to liquidate came after a review of the Company’s strategy and operations in September 2021 following poor financial performance for 1H21 which included a dramatic increase in overhead costs by 14.9% and significant drops in revenue of -42.3% as well as operating EBITDA (-$4.3m) and gross profit (-$5.2m). 

For Palla, it was a perfect storm of regulator delays pushing back the launch of their products in the UK, reduced poppy seed revenue as a result of a reduction in domestic harvest growing area and a slowing of elective surgeries, decreasing demand for post operative analgesia. 

Despite providing shareholders with a refreshed plan and route to market, the financial results triggered a mass sell off well before results were released with the Company requesting more time to finalise their results, hinting to clued in investors that something was off. 

Whilst the writing was on the wall, the Company made one last attempt at reclaiming something with the sale and lease back of their Coolaroo facility. The Company didn’t admit to collapsing in on itself, announcing that they had sold the facility for $33 million, but had signed a lease to retain access for a further 18 months. The Company even received an ASX price query letter on December 9th, following a significant increase in volume of shares traded and dramatic price drop. Palla responded, effectively saying there was nothing to see here but just weeks later, the Company entered into voluntary administration. For the shareholders left behind, all they get is the tax loss.

It’s unclear whether poor leadership, market demands or COVID was the ultimate undoing of Palla Pharma, given that there is still significant demand for opioids, but hopefully the story reminds other listed companies that transparency is key, and that investors are paying more attention than you think.

  • About
  • Latest Posts
Samantha Freidin
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
Latest posts by Samantha Freidin (see all)
  • Ingenia delivers despite challenges, holiday business bounces back - July 1, 2022
  • Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield - June 30, 2022
  • There are no scorpions involved in this company’s latest cancer drug - June 29, 2022
  •  
  •  
  •  
  •  
  • narcotic raw material
  • opioid crisis
  • opium production
  • palla pharma
  • pharmaceuticals
  • News

Leave a Comment

You must be logged in to post a comment.

  • About
  • Latest Posts
Samantha Freidin
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
Latest posts by Samantha Freidin (see all)
  • Ingenia delivers despite challenges, holiday business bounces back - July 1, 2022
  • Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield - June 30, 2022
  • There are no scorpions involved in this company’s latest cancer drug - June 29, 2022

Login or register for free to access unlimited reading

Register Now!
  • About
  • Latest Posts
Samantha Freidin
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
Latest posts by Samantha Freidin (see all)
  • Ingenia delivers despite challenges, holiday business bounces back - July 1, 2022
  • Cobram to drizzle 9.5 million litres of olive oil over dishes across Australia after exceptional harvest yield - June 30, 2022
  • There are no scorpions involved in this company’s latest cancer drug - June 29, 2022
  • News

  • Opinion

  • Satire

  • About

  • Contact Us

  • Subscribe

Copyright © 2020 The Sentiment. All rights reserved.