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Generic drug focus helps local companies weather the storm

by Pavel Gramatikov

The pharmaceutical industry in the SEE region is continuing to show growth contrary to the general trend in Europe, bolstering the notion that it is one of the most resilient sectors. Even in the EU periphery, pharmaceutical companies enjoyed growth and immunity to the region’s slower recovery helped, again, by its core focus on generic medicines, or cheaper copies of branded drugs.

SEE TOP pharmaceutical manufacturers 2012

Two Slovenian generic drugs makers dominated the top five companies this year, namely Krka, which makes the majority of its sales revenue abroad, and Lek d.d., part of Swiss Novartis’ generics arm Sandoz. Krka, which occupies the first place in our ranking, boosted its 2012 sales by 6.0% to 1.06 billion euro. It sold 148.1 million euro worth of products in 2012 in Southeast Europe, representing some 13% of its total sales. This is a slight increase from the 146 million euro registered in 2011. In Romania, the region’s biggest market, the company made 47 million euro and some 35.2 million euro in Croatia. Krka also achieved double digit growth in Serbia and also boosted its sales in Bosnia and Herzegovina, Macedonia, Kosovo and Bulgaria. At home, the company booked sales of 91 million euro. Its peer, which came second, Lek d.d., also benefited from the increased adoption of generic drugs, boosting its revenue to 697.9 million euro from 639.6 million euro in 2011 and its net profit to 75.9 million euro from 73.9 million euro.

Pliva Hrvatska d.o.o., a unit of Israeli generics major Teva and the only Croatian pharmaceutical firm to find its way into the top 10 regional players grabbing the third spot, benefited from an investment by its parent, raising its 2012 revenue to 439.5 million euro and its net profit to 89.7 million euro from 366.6 million and 55.5 million euro registered in 2011, respectively. Last October, Teva decided to inject 200 million U.S. dollars, one of the biggest investments in Pliva’s history, intended for the construction of wastewater and process gas treatment facilities and the expansion of multipurpose synthesis plants as well as the building of a new factory for finished dosage forms in Zagreb.

In Serbia, Hemofarm AD, controlled by German generic drugs maker Stada Arzneimittel, managed to turn in a 24.6-million-euro net profit in 2012 from a loss of 53 million euro, getting to the fourth spot in the ranking. Last year, Hemofarm started direct sales to pharmacies, thus avoiding some wholesalers which had failed to pay for deliveries. Its revenue inched down to 220.9 million euro from 224 million euro in 2011.

A newcomer to our annual ranking is the Romanian pharmaceutical company Europharm SA which is also focused on manufacturing generic medicines. It succeeded in doubling its 2012 net profit to 11.1 million euro and boosting its revenue to 119 million euro from 112.6 million euro registered in 2011, taking the fifth spot in the ranking.

All other entrants which made it to the top 10 managed to generally keep their revenues and profit in line with their 2011 figures. Romania’s copycat pharmaceuticals maker Terapia SA, at number six, improved its 2012 revenues to 109 million euro from 100.6 million euro. However, its net profit slightly decreased to 21.9 million euro from 22.2 million euro in 2011. Bulgaria’s Balkanpharma Dupnitsa, standing at number seven in the ranking, boosted its revenue to 108 million euro from 85.5 million euro, as well as its net profit – to 12.7 million euro from 10.8 million euro. The company is part of generics drugs major Actavis. Sopharma’s net profit rose to 20.9 million euro from 20.8 million euro. However, its sales fell to 107.5 million euro from 115.5 million euro. The company ranks eighth and is the biggest Bulgarian public pharmaceutical company. It has 12 domestic manufacturing facilities and three plants in Russia, Ukraine and Serbia. Earlier this year, the company inaugurated its biggest production facility yet with a capacity of 4.0 billion pills a year.

Macedonia’s Alkaloid occupied the ninth position in our ranking with figures in line with its performance in 2011. Last year its revenue stood at 94 million euro with a net profit of 9.9 million euro. The revenue of Bulgarian veterinary drug maker Biovet in 2012 placed it tenth with 91.6 million euro, up by 43% yearon-year. The company raised its net profit more than three times to 4.2 million euro.

All companies in the top 10 were profitable in 2012.

In total, Bulgaria had three companies in the ranking, followed by Romania and Slovenia with two each. Croatia, Serbia and Macedonia placed one company each in the chart.

 

The performance of the distributors and wholesalers was also satisfactory, with the majority of them increasing their revenue and profit. The top four places were occupied by Romanian companies with Mediplus Exim SRL reaching the first place with 2012 revenues of 730.5 million euro and net profit of 14.2 million euro. This compares to 646.3 million euro and 13 million euro registered in 2011, respectively. It was followed by Farmexpert D.C.I. SA, Polisano SRL and Roche Romania SRL. The only company in the top five to book a drop in its net profit was Polisano. It generated a net profit of 6.4 million euro against 9.8 million euro back in 2011.

Croatia’s Medika d.d., which came fifth, booked a rise in both its revenues and profit, while its domestic peer Phoenix Farmacija d.d., even managed to return to profit in 2012, thus getting to the seventh place. The only Slovenian company in the top 10, Kemofarmacija d.d., saw its revenue and net profit drop and it took the sixth place in the ranking. Another two Romanian firms demonstrating solid performance also found their way into the ranking – Fildas Trading SRL and Farmexim SA. Bulgarian Sopharma Trading AD came tenth with revenues of 238.6 million euro and a net profit of 3.8 million euro. By comparison, it registered revenues of 228.6 million euro and a net profit 3.3 million euro in 2011.