Pliva posts 9-month net loss of $34 million

By Wai Lang Chu

- Last updated on GMT

Related tags: Generic drug, Pharmaceutical industry

Pliva released its financial results for the first nine months of
2005, which revealed a net loss of $34 million, as the drug maker
tries to recover from its loss-making drug launch in the US. This
is despite posting higher revenues of $282 million (€241 million),
up 15 per cent from last year.

Pliva's drug, hit the pharmaceutical company's profits hard as its venture into the United States plunged it into considerable debt. The drug, Sanctura, is a treatment of overactive bladder (OAB) with symptoms of urge urinary incontinence, urgency and urinary frequency.

Last May, Pliva​ sold the drug having decided to focus entirely on the generic drug business, concentrating in particular with erythropoietin products, which are fast approaching a marketable phase.

Pliva launched a generic version of the red blood cell stimulator erythropoietin (EPO) in its home market and has two strategic partnerships with Mayne Pharma and Barr Laboratories for biogenerics.

Revenue rose to $934 million from $804 million compared to 2004. Revenue excluding royalties rose to $760 million from $676 million a year ago.

Pliva said that Azithromycin sales, whose patent expires in the US this November, would be the last period in which the company will report on Azithromycin revenues. It was currently making Pliva approximately $150 million a year.

The company recently stated an interest in breaking into the embryonic market for generic versions of biologic drugs.

To counter the loss of this revenue Pliva said it planned to launch a large number of generic drugs in the coming years to offset the decline in royalty revenue from next year.

East Europe's largest drugs maker by sales posted a net loss in the first half of 2005 amounting to $83.1 million.

Despite the third quarter performance, the company confirmed its end-year outlook of sales growth at about 10 per cent and operating profit within the range of $170 million to $180 million.

September saw Pliva sign a three-year agreement with Pfizer for the bulk supply of azithromycin, the active ingredient in the antibacterial drug Zithromax.

Pliva's Pharma Chemicals division recorded sales of $31 million, up 43 per cent over last year driven by both strong bulk Azithromycin sales, up 28 per cent to $22m. Non-Core sales also posted an increase of 10 per cent to $13m.

Pliva aims to join the top 10 global generic drug producers in coming years, and reported a 12 per cent hike in generic sales in the first half of this year to $383 million.

And if its ambition in biogenerics is fulfilled, it could get an early start in a market tipped to grow from practically zero at present in North America and Europe to $16.4 billion by 2011, according to consultancy firm Frost & Sullivan.

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