Demand for generics keeps soaring


Zagreb – Consolidation of the generic-drug business is focusing on eastern Europe. So far in 2006, at least eight deals have been announced, including Barr Pharmaceuticals‘ US$2.5-billion acquisition of Croatia‘s Pliva, completed at the end of October. Generic-drug makers are caught between soaring demand and falling prices. At the same time, competition from low-cost players in India and China is intensifying as they shift from supplying only raw materials to actual manufacturing. As a result, generics players are losing their sources of cheap ingredients and gaining a new competitors in the process.
So why is big pharma heading east? Demand for generic drugs in Russia, for instance, is growing between 30% and 40% a year, compared with 7% in the U.S. Another big attraction: the dominance of so-called ‘branded generics’. These copies of off-patent prescription drugs are marketed under brand names and sell for more than commodity generics. While consumers in the region can’t afford high-priced brand-name formulas, they are willing to pay more for the perceived higher quality associated with branded generics.
Pliva also excels at what is perceived as the next big frontier in the pharma business: biosimilars, or off-patent versions of genetically engineered biotech drugs. Moreover, the deal gives Barr better access to Central and Eastern Europe and Russia.
Barr isn‘t the only active player in the region. Novartis‘ Sandoz, the world‘s second-largest generics maker by sales, bought Slovenia‘s Lek four years ago. Over the past two years, Actavis has snapped up eastern European generics makers, including Hungary‘s Kéri Pharma, Bulgaria‘s Higia, the Czech Republic‘s Pharma Avalanche, and Romania‘s Sindan. In March, French Sanofi-Aventis paid US$565 million for a 25%-stake in Czech Zentiva. Even Indian players are getting in on the action: In March, Ranbaxy spent US$374 million for a majority in Terapia, Romania‘s largest generic company.
Next up: Slovenia’s Krka is one possible target, although its US$2 billion-plus market cap is likely to attract only deep-pocket players. Another possible target is Hungary‘s Gedeon Richter, the No. 1 generics player in Russia. With operating margins of 28% and a lucrative niche in women’s health, Gedeon Richter is expected to post annual sales growth in excess of 15% through to 2010. Poland‘s biggest generics company, Pol­pharma, might also be in play, and the rest of Zentiva could also be up for grabs.



Ljubljana – Slovenian drugmaker Krka d.d. turned in a solid performance in 2009, with total sales reaching EUR950m, similar to turnover in 2008. Profits rose by around 10% year-on-year to EUR173.7m. The results announced at the...



Ljubljana – Pharma giants Warner-Lambert and Pfizer have withdrawn their lawsuit against the Slovenian generic manufacturer Krka d.d over the infringement of two patents concerning their US$12bn blockbuster drug Lipitor...



Ljubljana – BIA Separations d.o.o., the Slovenian specialist for downstream processing of biologicals using monoliths, has received an EUR8m cash injection from the European Investment Bank (EIB). EIB president Philippe Maystadt...



Ljubljana – The most talented young synthetic biologists currently seem to be coming from Eastern Europe. After its success in 2006, a team of young undergraduate chemists from the University of Ljubljana has once again won the...



Belgrade/Lund – Swedish developer of probiotic bacteria Probi AB (Lund) has signed a distribution agreement with Serbian pharmaceutical company Proton System (Belgrade). The agreement gives Proton System the right to sell one of...



Ljubljana/Brussels – Slovenia, which took over the EU presidency from Portugal in January, will put its health-care focus on improving the management of cancer, representatives announced on the presidency website...

Germany, SloveniaSlovenia


Zagreb – Barr-PLIVA d.d.’s German subsidiary AWD.pharma GmbH & Co. KG. has signed an agreement to acquire O.R.C.A.pharm GmbH (“ORCApharm“), a privately owned specialty pharmaceutical company focused on the oncology market in...



Ljubljana – Slovenia’s national prevention scheme has led to a very low rate of new HIV infections. According to Slovenias’ health minister, Andrej Brucan, fewer than one in 1000 people is infected with the AIDS virus.



Zagreb – In the bidding race between the Icelandic Actavis Group and US Barr Pharmaceuticals Inc. for the takeover of the Croatian biogenerics producer Pliva d.d., the company ultimately opted for Barr’s offer. Both companies’...



Ljubljana - Lek, the wholly-owned Slovenian subsidiary of Sandoz, Novartis' generics business, will once again cut up to 50 jobs through the course of the year. The redundancies are expected to hit all departments except R&D and...

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