Mixed fortunes for CEE pharma firms
producing both generic and branded drugs and active pharmaceuticals
- post results this week. Their results suggest CEE firms should
focus on foreign markets as pricing constraints bite at home,
writes Phil Taylor.
Croatian pharmaceutical company Pliva benefited from its charge into Western Europe in the first quarter of the year, with a near-50 per cent hike in revenues in the region to $56.5 million (€46.6m).
Western Europe now accounts for nearly 12 per cent of the total group turnover, double the level in the first quarter of 2003, suggesting that the company is achieving its objective of tapping the growing market in the European Union for generic drugs. The market for generics in Europe is expected to rise from a current level of around 50 per cent to 75 per cent in 2007, as countries put measures in place to cut escalating healthcare costs.
The growth in Western Europe was driven by Italy and Spain, two countries which are only just starting to embrace generics and which recorded growth of +128.4 per cent and +106.9 per cent, respectively.
Overall, group sales at the company, which makes generic drugs and pharmaceutical chemicals, rose 4.8 per cent rise to $284 million. The increase in sales was primarily driven by the performance of the pharmaceuticals division, which posted a solid growth of 11.1 per cent to $185.2 million, although pharmachem decreased 1.1 per cent to $36.5 million
Royalty income decreased 20.0 per cent to $39.8 million as a result of a decrease in sales of Pfizer's antibiotic Zithromax (azithromycin). Azithromycin sales increased 3.9 per cent to $31.6 million, while other pharmachem lines plummeted by nearly a quarter to $4.9 million.
Gross profit at Pliva was flat at $167.1 million, and Pliva's margin shrank to 58.9 per cent from 62.1 per cent recorded in 2003, held back by lower royalty rates and an increase in the cost of goods sold (COGS).
Meanwhile, Hungarian pharmaceuticals manufacturer Richter Gedeon has posted an 8.1 per cent drop in first-quarter 2004 net income to HUF 7.5 billion (€29.9m), while operating profit slumped 15.2 per cent to HUF 6.6 billion.
Reported sales for the quarter remained relatively flat, down 1.3 percent to HUF 28.2 billion, which the company put down to an 8.4 per cent negative impact of currency exchange rates.
Revenues were buoyed by the continuing robust performance of Richter's gynaecology unit, which achieved sales growth of 32 per cent for the quarter. The unit supplies finished contraceptives and bulk hormone ingredients.
In the domestic market, turnover dropped 11.1 per cent to HUF 7.9 billion, which Richter claimed was a direct result of the Hungarian government's recent measures to control drug pricing and reduce national reimbursement costs.
In other news, the government's state privatisation agency, the APV, has initiated the sale of its quarter stake in Richter.
