Pricing Power and Local APIs: Why Investors Are Flocking to Nigeria’s Pharma Sector

The Nigeria pharmaceutical sector has emerged as a standout performer in 2025, with major listed “drug makers” reporting record-breaking top-line growth and improved profitability.

Investors are increasingly viewing these stocks as “attractive value” plays, balancing high double-digit revenue growth against the backdrop of a stabilizing foreign exchange environment and a pivot toward local production.

It appears drug makers’ stocks will remain attractive going into 2026, which presents an opportunity for value investors to  invest their money in firms whose earnings have been buoyed by healthy demand for their essential products.

Fidson remains the industry leader (for listed drug firms), reporting a 132% surge in Profit After Tax (PAT) to N7.97 billion for the nine months ended September 2025.

Revenue climbed 56% to N93.08 billion, driven by aggressive price adjustments and increased volumes in ethical and consumer healthcare segments.

May & Baker Nigeria reported a 43% revenue expansion to N10.23 billion in H1 2025, with PAT rising 150% to N876.6 million. Its gross margins improved significantly to 39%, reflecting operational efficiencies.

Neimeth International reported a 62% revenue jump to N5.01 billion, though its net profit growth was more modest at 9% due to high interest expenses on borrowings.

Emzor Pharmaceuticals revenue surged 34% to N51 billion in 9M 2025, fueled by its strategic shift toward Active Pharmaceutical Ingredient (API) manufacturing.

Fidson Healthcare Plc trades at a price to earnings ratio of 9.81 times (x) and May & Baker Nigeria Plc, (9.99x).

Investors have an unswerving conviction about drug makers’ future growth prospects and their ability to remain resilient even amid a challenging environment as evidenced in positive year to date.

It is noteworthy that Fidson is one of the star performers on the NGXASI index as the company shares have gained 177.58 percent since the start of the year, outperforming the All-Share-Index.

May & Baker, MerCure Industries Plc, and Neimeth International Pharmaceutical Plc have year to date returns of 89.36 percent, 262.59 percent, and 175.11 percent respectively.

Fidson Healthcare Industries Plc, May & Baker Nigeria Plc, MeCure Industries Plc, Emzor Pharmaceutical Industries Limited, and Neimeth International Pharmaceutical Plc posted a combined revenue of N238.72 billion in the first nine months of 2025, which is 60.58 percent higher than 2024’s N148.71 billion, according to data gathered by MoneyCentral.

The sales growth was propelled by anticipated growth in sales volumes, lower taxes, product innovation, and price adjustments that align with the prevailing macroeconomic conditions.

Of course, the suspension of import duties and value added tax (VAT) on essential medical supplies, including APIs, and other raw materials are expected to strengthen future profit and margins.

Analysts at Meristem Securities are of the view that the recent $1.20 billion investment in vaccine production in Africa through the African Vaccine Manufacturing Accelerator (AVMA) presents a significant opportunity for the Nigerian healthcare sector to reduce reliance on imports and boost local production capabilities in the medium term.

Drug makers’ aggressive expansion means they are poised to take advantage of a gradual economic recovery as the local currency is gradually strengthening against the foreign currencies while the weakening of the U.S. dollar is going to be a boon for Nigeria.

Emzor has been investing heavily in local Active Pharmaceutical Ingredients (API) production—a $23 million transformative investment—which is expected to reduce import reliance and potentially improve margins long-term.

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