Verdict
Liven Pharma Limited’s audited year ended 30 June 2026 shows a real improvement in manufacturing economics, but not yet a completed turnaround. Sales declined 16.9% to PKR 105.81 million, while gross profit rose 48.4% to PKR 26.65 million because cost of sales fell faster than revenue. The gross margin expanded to 25.2% from 14.1%. Even so, the company remained loss-making: the operating loss was PKR 77.14 million and the loss after tax was PKR 31.14 million.
The headline loss narrowed 94.7% from PKR 584.46 million, but that comparison needs context. FY2025 carried a PKR 327.80 million non-cash listing expense arising from the reverse-merger accounting. FY2026 also benefited from PKR 12.22 million of other income and a PKR 35.18 million tax credit. The cleaner conclusion is that the underlying cost base improved sharply and gross margin recovered, while the current revenue scale remains too small to absorb operating costs.
This analysis uses the audited financial statements for the company itself. Liven’s 5 October 2026 correction changed the year stated in the Statement of Compliance from 2025 to 2026 and corrected AGM wording from “Six Months” to “Annual.” It did not revise the financial statements or the audit opinion.
Results at a glance
• Audited period: year ended 30 June 2026.
• Sales: PKR 105.81 million, down 16.9% from PKR 127.27 million.
• Gross profit: PKR 26.65 million, up 48.4% from PKR 17.96 million.
• Gross margin: 25.2%, up 11.1 percentage points from 14.1%.
• Operating loss: PKR 77.14 million, narrowed by 84.3% from PKR 490.90 million.
• Loss after tax: PKR 31.14 million versus PKR 584.46 million.
• Loss per share: PKR 0.28 versus a restated PKR 7.11.
• Dividend: none.
• Operating cash flow: PKR 8.99 million inflow versus a PKR 20.72 million outflow.
• First export sales: PKR 14.15 million, equal to 13.4% of revenue.
• Capacity utilisation: 0.72 million units produced against 12 million installed units, or 6%.
AlphaGen model scores
The following are AlphaGen model outputs, not company-reported financial figures: Alpha QoQ Score 82.01; TTM Performance Score 81.95; 3Y Business Perf Score 65.64; Sector Leadership Score 51.29.
The model’s quarterly and trailing series are not used to construct an implied fourth quarter here because their period mapping does not reconcile cleanly with the audited annual statements. The article therefore anchors every current-period financial conclusion to the official annual report and avoids unsupported quarter-on-quarter comparisons.
What improved
The strongest change was at gross-profit level. Sales fell by PKR 21.47 million, but cost of sales declined by PKR 30.15 million to PKR 79.16 million. That produced PKR 8.69 million more gross profit despite lower revenue. The arithmetic points to better production economics, product mix or pricing relative to direct cost, but the filing does not quantify how much came from each factor. It would be speculation to assign the improvement to any single driver.
Exports are a useful early signal. Management reported its first export sales of PKR 14.15 million, representing 13.4% of annual sales. That diversifies the revenue base at the margin and gives Liven a route to use more of its idle capacity. It is still too early to treat exports as a durable growth engine: the filing gives no order backlog, geography-by-geography margin, repeat-order data or forward volume commitment.
Operating expenses also fell substantially. Administrative and general expenses dropped to PKR 37.71 million from PKR 378.56 million, mainly because the prior year contained the reverse-merger listing expense. Selling and distribution costs declined to PKR 9.76 million from PKR 17.61 million. These reductions, together with the gross-margin recovery, cut the operating loss to PKR 77.14 million from PKR 490.90 million.
Cash generation improved as well. Net cash from operations was PKR 8.99 million, compared with a PKR 20.72 million outflow a year earlier. This is a meaningful direction change, equivalent to about 8.5% of sales. It should not be confused with sustainable free cash flow, because the company also paid PKR 29.66 million for property, plant and equipment and made large movements into short-term investments.
What weakened / needs attention
Revenue scale is the central weakness. Installed production capacity was 12 million units, but actual production was only 0.72 million units, implying utilisation of just 6%. At that level, even a much better gross margin cannot cover the fixed and semi-fixed operating cost base. The FY2026 operating loss was still roughly 72.9% of sales.
Customer concentration compounds the scale risk. Management disclosed that two customers accounted for 58.98% of total sales. The loss or delayed payment of either could materially affect revenue, working capital and plant utilisation. Trade receivables were PKR 11.12 million at year-end, while the income statement included a PKR 11.58 million expected-credit-loss charge on trade debts.
Inventory quality also deserves scrutiny. Stock-in-trade declined to PKR 92.90 million from PKR 123.33 million, which is constructive, but the year included a PKR 36.76 million provision for obsolete finished goods. That provision alone equals about 34.7% of annual sales. It suggests that historical product or demand assumptions did not fully convert into saleable inventory.
Other expenses of PKR 53.77 million remained large relative to revenue. Besides the inventory provision and credit-loss charge, the company recorded a PKR 5.16 million impairment on advances to suppliers. Those items explain why the gross-margin recovery did not translate into operating profitability. They are non-cash in the current period, but they represent real deterioration in previously recognised assets.
Finance cost rose to PKR 2.54 million from PKR 0.79 million, an increase of about 223%, although the absolute burden remained modest relative to equity. Other income of PKR 12.22 million helped the result, and the PKR 35.18 million tax credit reduced the after-tax loss materially. Before that tax credit, the loss before tax was PKR 66.32 million. Readers should therefore not treat the PKR 31.14 million net loss as the run-rate operating deficit.
Cash flow and balance sheet
The balance sheet strengthened mainly through new capital and asset revaluation rather than retained earnings. Liven issued 20 million right shares in January 2026 for PKR 200 million gross and paid PKR 8.70 million of issuance costs. Paid-up capital increased to PKR 1.13 billion. A PKR 188.91 million revaluation surplus also lifted equity, while the annual loss increased the accumulated deficit. Total equity reached PKR 985.46 million, up from PKR 633.86 million.
Total assets rose to PKR 1.22 billion. Property, plant and equipment increased to PKR 918.17 million, partly reflecting revaluation. Current assets were PKR 293.08 million against current liabilities of PKR 111.27 million, a current ratio of about 2.63 times. However, PKR 163.30 million of current assets consisted of short-term investments, so liquidity depends partly on their accessibility and value.
Cash and bank balances rose to PKR 18.25 million from PKR 7.88 million. The operating cash inflow and the rights proceeds funded PKR 29.66 million of capital expenditure and a net shift into short-term investments; investing cash flow was a PKR 185.81 million outflow. Net financing cash inflow was PKR 187.19 million. The year-end cash increase of PKR 10.37 million therefore reflects capital raising and portfolio allocation as well as operating improvement.
Interest-bearing obligations appear modest relative to equity: long-term financing was PKR 2.52 million, the current portion of long-term liabilities PKR 4.18 million, and running finance PKR 9.12 million. But not all funding risk is captured by bank debt. Director loans of PKR 15.28 million were unsecured, interest-free and repayable on demand. The filing also says title to land remains in the names of two directors until related bank financing is settled. Both warrant continuing governance and liquidity attention.
What to monitor next
First, utilisation needs to rise meaningfully above 6% without sacrificing the recovered gross margin. Revenue growth that merely consumes cash or recreates obsolete inventory would not complete the turnaround. The best evidence would be repeat export orders, higher domestic volumes and sustained gross profit after normal production costs.
Second, watch whether the exceptional charges normalise. Obsolete-stock provisions, receivable credit losses and supplier-advance impairments consumed more than the year’s gross profit. A profitable result requires both better sales absorption and tighter controls over inventory, customer credit and procurement.
Third, regulatory execution matters. Management says it is pursuing a dry-powder injectable facility and had paid PKR 2.82 million of DRAP product-registration fees for which certificates had not been issued by the reporting date. It also described technology-transfer and API-manufacturing initiatives with Chinese counterparties. These are opportunities, not yet earned revenue; milestones should be judged by approvals, commissioned capacity, disclosed orders and cash returns.
Fourth, separate operating progress from balance-sheet support. The rights issue gives Liven runway and the revaluation lifts book equity, but neither proves recurring profitability. The next result should be tested for higher sales, continued gross-margin discipline, lower asset-quality charges, positive operating cash flow and reduced customer concentration.
Evidence coverage and limitations
The audited annual statements support the period, reporting basis, audit opinion and principal financial figures. The filing does not provide a quantified bridge for price, volume and product mix, nor segment margins, export destinations or a management forecast. Those causal claims are therefore omitted. The official annual data also do not support a reliable discrete-quarter comparison, so this review evaluates FY2026 against FY2025 and states the limitation rather than forcing an implied quarter.
Primary sources
• Liven Pharma FY2026 audited annual report (PSX).
• Liven Pharma correction notice dated 5 October 2026 (PSX).
• Liven Pharma company page (PSX).
• Liven Pharma financial statements page.
This is a results analysis, not investment advice.