REG - Beximco Pharma. - Response to media reports and update on BSEC order

Beximco PharmaceuticalsAnnouncement

21/03/2025 16:00

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RNS Number : 7346B  Beximco Pharmaceuticals Ltd  21 March 2025

21 March 2025

 

BEXIMCO PHARMACEUTICALS LIMITED

 

Response to reports in Bangladesh media and update on BSEC order

 

Beximco Pharmaceuticals Limited ("the Company"; AIM Symbol: BXP, LEI No.:
213800IMBBD6TIOQGB56), the fast-growing manufacturer of generic pharmaceutical
products and active pharmaceutical ingredients, has given the below statement
denying all media allegations of corruption in the Covid-19 vaccine
procurement process, which have circulated across the Bangladesh media on the
17 and 18 March 2025. The media reports follow the launch of an
Anti-Corruption Commission (ACC) investigation following a complaint submitted
to the ACC by Moidul Islam, an official of the Bangladesh Medical Research
Council.

 

The Company also provides a further update on the Company's previous
statement, dated 6 March 2025, on the Bangladesh Securities and Exchange
Commission (BSEC)'s proposed appointment of an additional nine independent
non-executive directors to the Company's Board of Directors (the "BSEC
Order"). Following an appeal from BSEC against the High Court's initial
decision, the Appellate Division of the Supreme Court of Bangladesh did not
uphold the High Court Stay Order, and directed the High Court to dispose of
the writ petition of the Company before 19 March 2025. However, the date of
the High Court hearing has now been postponed to after 20 April 2025 and is
expected to be heard by 20 May 2025. Further announcements will be made as
appropriate.

 

The Company's statement, reproduced below, was originally distributed to
Bangladesh media via the Company's local PR firm on 19 March 2025. Please
note, 1 Crore = 10 million.

 

Beximco Pharma rejects the allegations of corruption in Covid-19 vaccine
procurement and protests the misleading news involving it to a government fund
mismanagement.

 

Dhaka, 19 March 2025: Beximco Pharmaceuticals Ltd. (Beximco Pharma) is deeply
concerned and disappointed by the misleading and defamatory news published on
March 17 and 18, 2025 in several news portals, dailies and TV channels. These
reports alleged Company's involvement in the corruption during the procurement
of Covid-19 vaccines. The Company rejects these baseless allegations and
protests the sensationalized and slanderous headlines, that not only tarnished
corporate reputation as a globally known pharmaceutical manufacturer and
exporter but also confused thousands of its valued shareholders, especially
many foreign investors who currently hold more than 32% of company's shares.

 

Beximco Pharma was involved with the procurement of 15 million (1.5 crore)
doses of Oxford / AstraZeneca vaccine (Covishield) from Serum Institute of
India (SII), the world's largest vaccine producer, costing USD 60 million (BDT
480 crore) and Beximco Pharma received USD 1 (one) per dose totaling USD 15
million (BDT 120 crore) for supplying the same. Thus, the total cost incurred
for 15 million Covishield doses stood at BDT 600 crore while several media and
news portals clearly attempted to malign Beximco Pharma with headlines saying
the company is being investigated for BDT 22,000 crore corruption in
connection to Covid-19 vaccine purchase.

 

The reports claimed that The Anti-Corruption Commission (ACC) has decided to
launch an inquiry against a syndicate involving Salman F Rahman, Beximco
Pharma and others over alleged embezzlement of BDT 22,000 crore government
funds during the Covid-19 vaccine procurement process. It further alleged that
the government bypassed competitive bidding and negotiations by pursuing a
single source for vaccine procurement.

 

Company's response:

During the Covid-19 pandemic, wealthy nations had pre-booked nearly all
available vaccine doses, leaving low and middle-income countries like
Bangladesh in a precarious position. The Bangladesh government made desperate
efforts to secure vaccine doses from multiple sources, but the global
situation was very complex, and no manufacturer could guarantee doses.
Recognizing the urgency, Beximco Pharma focused on the AstraZeneca vaccine
(Covishield), which showed early promise in trial, did not require ultra-cold
storage like Pfizer or Moderna vaccines, and presumed to be relatively cheaper
as this was being developed by Oxford University. Beximco Pharma started
negotiations with SII, the world's largest vaccine producer and authorized
manufacturer of Covishield. In August 2020, Beximco Pharma and SIl agreed to
cooperate on Covid-19 vaccine, Beximco Pharma being the exclusive distributor
for Bangladesh to facilitate the need of Bangladesh government. Despite all
out efforts from government and private sector, there was serious shortage of
vaccine doses, and no potential vaccine manufacturer could commit any dose to
anyone. Bangladesh received the first consignment of 5 million Covishield
doses on 25 January 2021. Mass vaccinations began on February 7, 2021, ahead
of many developed countries. This achievement was made possible by Beximco
Pharma's professionalism, global reputation, and relentless efforts.

 

The reports also claimed that government procurement rules were not followed
in the vaccine purchase agreement between the government, Beximco Pharma, and
SII. Beximco Pharma was included as a third party without a valid reason,
leading Bangladesh to purchase the vaccine at a higher price than other
countries.

 

Company's response:

Despite repeated requests, SII was unwilling to deal with government directly
because of their inability to perform regulatory formalities in Bangladesh and
to avoid bureaucratic delays. Also, government do not purchase directly from
overseas manufacturers. Such requirements are always met by dealing with a
credible entity or organization. Beximco Pharma acted as a responsible
intermediary, ensuring delivery and distribution of vaccines.

 

The complaint further claimed that if the government had procured the vaccine
directly from the Serum Institute, the savings per dose could have been used
to secure an additional 6.8 million doses.

 

Company's response:

The vaccine purchase agreement (available for viewing at
https://beximco-pharma.com/cdn/bpl/bdesh-signed-purchase-agreementdt.18.12.2020.pdf
(https://beximco-pharma.com/cdn/bpl/bdesh-signed-purchase-agreementdt.18.12.2020.pdf)
) was signed on December 13, 2020 with the vaccine price settled at USD 4
(four) per dose. There was an exceptional clause in the agreement saying if
SII sells the vaccine at a lower price in India, Bangladesh would pay the
lower price, and if the Indian price is higher, Bangladesh would still pay USD
4 (four) per dose. Although the supply agreement was done for a total of 30
million (3 crore) doses, SII eventually delivered 15 million (1.5 crore) doses
costing USD 60 million (BDT 480 crore). Beximco Pharma received USD 1 (one)
per dose totaling USD 15 million (BDT 120 crore) for supply of 15 million (1.5
crore) doses. Thus, the total cost incurred for 15 million Covishield doses
stood at BDT 600 crore while several media and news portals clearly attempted
to malign Beximco Pharma with headlines saying the company is being
investigated for BDT 22,000 crore corruption in connection to Covid-19 vaccine
purchase.

 

The USD 1 (one) distribution service fee per dose was given to Beximco Pharma
for rendering its services that included completion of aII regulatory
formalities, importation, storage, and distribution of vaccines nationwide
strictly maintaining cold chain in every step. This also included risk
coverage during transportation (damage due to mishandling, temperature
fluctuations during storage etc.). Beximco Pharma also took full financial
liabilities in the absence of the insurance coverage. This service fee was
very much in compliance with local regulatory authority (DGDA) norms for
imported medicines.

 

With a total cost of USD 5 (BDT 400) per dose, this was the lowest price paid
by Bangladesh Government for any Covid-19 vaccine. Beyond the agreement terms,
Beximco Pharma also supported the government by storing and distributing
nationwide an additional 32 million doses of Pfizer, Moderna, Sinopharm,
Sinovac vaccines, absolutely free of any charge. For its outstanding role in
combating the pandemic, Beximco Pharma won the highly prestigious CPhl Pharma
Awards 2020 in the category of "lnnovation in Response to Covid-19" competing
against top pharma companies from around the world. While such a remarkable
accomplishment truly represented Bangladesh and its pharma industry to the
world, especially for its positive role during the unprecedented humanitarian
crisis, it's really heartbreaking to see Beximco Pharma has now become a
target of malicious media trial in its own country.

 

Beximco Pharma firmly asserts that it conducted all transactions with
necessary approvals from the regulatory authorities. As a company listed on
the AIM of London Stock Exchange, Beximco Pharma maintains full transparency
in its operational and financial disclosures. The company has never been
involved in any corruption, rather it has been making significant contribution
to economy being the largest exporter of medicines in the country with a
global footprint in more than 60 countries and winning the National Export
Trophy (Gold) a record nine times.

 

The allegations that came out in the media are entirely baseless, distorted,
and part of a smear campaign. Beximco Pharma reserves the right to take
appropriate legal action against such defamatory reporting as it hampers
Company's reputation. The Company urges media to exercise responsibility
professionally and verify facts before publishing. Beximco Pharma remains
committed to transparency and is always available to provide clarifications or
additional information as needed.

 

For further information please visit www.beximcopharma.com
(http://www.beximcopharma.com/)  or enquire to:

 

 Beximco Pharma

 Mohammad Ali Nawaz, Chief Financial Officer

 Tel: +880 2 58611001, Ext. 20030

 Mohammad Asad Ullah, FCS

 Executive Director & Company Secretary

 Tel: +880 2 41060531, Ext. 10140

 SPARK Advisory Partners Limited (Nominated Adviser)

 Mark Brady / Andrew Emmott

 Tel: +44 (0)20 3368 3551 / 3555

 SP Angel Corporate Finance LLP (Broker)

 Matthew Johnson

 Tel: +44 (0) 20 3470 0470

 FTI Consulting

 Simon Conway / Sam Purewal

 Tel: +44 (0)20 3727 1000

 

Notes to Editors

 

About Beximco Pharmaceuticals Limited

Beximco Pharma is a leading manufacturer and exporter of medicines based in
Bangladesh. Since its inception in 1976, the Company remains committed to
health and wellbeing of people across all the continents by providing access
to contemporary medicines. Company's broad portfolio of generics encompasses
diverse delivery systems such as tablets, capsules, liquids, semi-solids,
intravenous fluids, metered dose inhalers, dry powder inhalers, sterile
ophthalmic drops, insulins, prefilled syringes, injectables, nebuliser
solutions, oral soluble films etc. The Company also undertakes contract
manufacturing for multinational and leading global generic pharmaceutical
companies.

 

Beximco Pharma′s state-of-the-art manufacturing facilities are certified by
global regulatory authorities of USA, Europe, Australia, Canada, GCC and Latin
America, among others and it has a geographic footprint in more than 50
countries. More than 6000 employees are driving the company towards achieving
its aspiration to be among the most admired companies in the region.

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