Ljubljana related

21 May 2020, 10:33 AM

STA, 21 May 2020 - Slovenia's pharma group Krka Group saw its net sales revenue increase by 22% year-on-year to EUR 462.9 million in the first quarter as the coronavirus pandemic pushed up the demand for its products. Net profit rose by 21% to EUR 85.2 million.

The unaudited interim report for the first quarter released by Krka on Thursday shows the operating profit rising by as much as of 85% year-on-year to EUR 133.9 million, and earnings before interest, taxes, depreciation and amortisation (EBITDA) increasing by 62% to EUR 162 million.

The group generated 95% of sales outside Slovenia, with East Europe, its biggest market, accounting for 33.2% of overall sales. The region also saw the highest sales growth in absolute terms, increasing by EUR 31 million to EUR 153.1 million, chiefly owing to growth in Russia and Ukraine.

In its second biggest market, Central Europe, Krka generated EUR 113.7 million or 24.6% of its overall sales, followed by South East Europe, at EUR 63.8 million (13.8%), and overseas markets, at EUR 13.5 million (2.9%).

Sales at home, at EUR 23.3 million, accounted for 5.1% of the overall sales. Prescription drugs accounted for EUR 10.8 million as their sales rose by 12% year-on-year.

The group allocated EUR 14.9 million for investment, of which EUR 9.8 million in the controlling company.

As of the end of March, the group had 11,622 regular employees, employing a total of 12,791 people along with agency workers. This is 21 more than at the end of 2019. This year the company plans to increase its headcount by 3%.

The core company, which employs 5,898, generated EUR 434.9 million in sales in January-March period, one third up year-on-year. Operating profit nearly doubled to EUR 126.2 million and EBITDA rose by 74% to EUR 147 million as net profit increased by 28% to EUR 65.4 million.

The company said the sales growth was partly affected by an increased demand for Krka products as a result of the novel coronavirus. "Towards the end of the first quarter, the demand slowed down and is currently at the planned and anticipated level."

Considering the unpredictability of the pandemic and its aftermath, the Krka management said it continued to carefully monitor the developments in the countries they operate in.

The group sales revenue for 2020 is projected at EUR 1.52 billion, of which 94% is to be generated in foreign markets. The profit target for the year is EUR 210 million, while EUR 134 million is to be allocated for investment this year.

06 Feb 2020, 08:45 AM

STA, 5 February 2020 - Addressing the press on Wednesday amid continuing speculation about the plans of Novartis, representatives of the Swiss multinational's Slovenian subsidiary Lek said Novartis would continue a reform in Slovenia that included the transformation of production locations and more focus on innovative drugs along with generics.

"The changes that we feel the most are Novartis's ongoing portfolio changes. In this context I see Lek in Slovenia integrated to a greater extent in the innovative segment," Lek head Robert Ljoljo said.

"This does not mean that we're leaving generic products entirely ... but we'll definitely see a transformation of production locations and an additional increase in the number of innovative drugs produced," he added.

Lek started producing 10 innovative drugs last year, making for a total of 26. The development of generic pharmaceuticals is also continuing, with registration applications filed last year for 21, the development and research executive Uroš Urleb explained.

Novartis plans to continue with investment. Last year it expanded the development centre in Ljubljana and set up an automatised analysis lab, while this spring it expects to wrap up an investment into the development of biological medicinal products in Mengeš.

Commenting on the change of plans in Prevalje, where Lek built a new hall to then announce it was actually phasing out the production of antibiotics there, Lek management board member Raul Intriago Lombeida repeated this location would be part of Novartis's future global centre for technical operations.

As regards a potential sale of the newly built hall, Ljoljo said that talks with TAB, the Mežica-based maker of starter batteries for cars and industrial batteries, were still ongoing.

Meanwhile, Intriago Lombeida did not wish to comment directly on the visit of potential Chinese investors at the production unit for active ingredients in Mengeš. He said such visits by agency representatives, suppliers etc. were an everyday affair.

Lek's results in 2019 were also not discussed concretely, with Ljoljo announcing they would be presented in the annual report, presumably in August. He did say the trends were in line with those for Novartis, which increased net sales by 9% while seeing a decrease net profit by 7% to EUR 11.7 bn.

31 Jan 2020, 12:34 PM

STA, 30 January 2020 - The group around the Novo Mesto-based drug maker Krka generated EUR 1.49 billion in sales revenue in 2019, or 12% more than in the year before, while net profit was up 39% to EUR 242 million, according to an estimate released by the management board on Thursday.

The group's operating profit was up by 18% to EUR 274 million, and pre-tax profit increased by 40% to EUR 283.7 million.

The core company generated EUR 1.39 billion in sales revenue, up 13% from 2018, and net profit more than doubled to EUR 248.1 million.

Last year, the Krka group generated EUR 481.2 million or 32.3% of total sales in East Europe, the largest market for Krka, with sales there increasing by 17% year-on-year. In Russia alone, sales were up by 13% to EUR 310.5 million.

Central Europe, comprising the Visegrad Group and the Baltic states, followed with EUR 339.6 million, or 22.8% of total Krka group sales. Sales there were up by 7% compared to the year before.

Sales to West Europe amounted to EUR 336 million or 22.6% of total sales, and were up by 17% compared to 2018. Germany, the Scandinavian countries, Spain, and Italy generated the strongest sales in the region.

With sales of EUR 191.3 million, South-East Europe represented a 12.8% share in total Krka group sales, and saw a 9% rise compared to the year before. Romania and Croatia were the largest markets, while the highest sales growth was recorded in Bulgaria and Serbia.

In Slovenia, sales were up by 4% to EUR 92.4 million, accounting for 6.2% of total sales. Product sales stood at EUR 52.9 million, while health resorts and tourist services yielded EUR 39.5 million.

In the overseas markets, the Krka group generated EUR 48.6 million in product sales, a 12% growth, which is 3.3% of total sales.

Commenting on the results, Krka chairman Jože Colarič noted that the group had posted its best sales result ever. Growth of sales was recorded in all regions and on the majority of markets, and sales were up in all groups of products and services, he added.

According to Colarič, the group plans to generate EUR 1.52 billion in sales and more than EUR 210 million in net profit this year. A total of EUR 134 million has been earmarked for investment in 2020, mostly in production and infrastructure.

Last year investments amounted to EUR 113 million, of which EUR 93 million was invested in the core company. Most of the funds went for modernisation of production and research, quality assurance and production and distribution centres.

In 2020, Krka plans to increase the workforce in Slovenia and abroad by a total of 3%, and is expected to have more than 12,300 employees at the end of the year, said Colarič.

The unaudited financial statements for 2019 for the group and core company will be published on 19 March, Krka said.

21 Oct 2019, 11:13 AM

STA, 19 October 2019 - The Maribor-based pharma company Marifarm is gradually implementing its strategy of becoming a drug manufacturer instead of just providing drug packaging as it used to. So far, they have been manufacturing drugs for other pharmas, but Marifarm wants to enter the market with their own drugs.

The company went private to avoid bankruptcy in 2016. It was acquired by Arterium International, a company registered in Amsterdam, which invested over EUR 11 million in three years.

At the end of August, the company got new owners - the Aquer GMBH group, established in Vienna, while Arterium International remains Marifarm's strategic partner.

Marifarm administration adviser Viktor Gryban told the STA that this shift in ownership had been planned and did not change the pharma's long-term strategy of manufacturing own drugs.

The company's drugs have already been developed and are now waiting for approval from relevant authorities to enter the market - a procedure that could take between three and four years.

To follow this goal and boost its business results, Marifarm has started working for other pharmas in drug manufacturing.

The company has been so far without profit and the owners are not expecting it this year either. Last year, Marifarm generated EUR 1.7 million in revenue and over EUR 3 million in net loss.

Although still in the red, the company has been improving its results and boosting its promotion at international pharma events.

Gryban expects the company to generate almost EUR 4 million in income this year and climb out of the red next year due to possible new business contracts.

The EUR 11 million investment has gone into modernising equipment as well as hiring new employees. The company currently employs some 150 workers and is planning to raise this figure to 170 by the end of the year, according to its director Romana Fišer.

Marifarm's current production capacities are the highest ever and will continue to be expanded. The company cooperates with Slovenia's largest drug maker, Krka, as well as pharmas from Switzerland, Germany, Latvia, Ukraine and India.

02 Oct 2019, 10:30 AM

STA, 1 October 2019 - Krka, the Novo Mesto-seated pharmaceuticals group, has launched a new research and development centre to nearly double its R&D, and control and analysis capacities.

"With the new facility, which has state-of-the-art equipment for laboratories, analysis and technology, we've almost doubled Krka's development as well as control and analysis capacities, thus significantly improving R&D, which is at the core of Krka's vertically integrated business model," said Aleš Rotar, R&D director.

The Research and Control Centre 4 (RKC 4) is a EUR 55.6 million investment located on the outskirts of Novo Mesto, and is connected with a bridge to RKC 3 and then on to RKC 1.

The eight-storey building with 18,000 square metres of offices accommodates new control and analysis labs and R&D areas, CEO Jože Colarič said before Tuesday's inauguration.

Rotar stressed the centre was especially important for pilot development of solid pharmaceuticals as a key component in the development of new products.

The company believes RKC 4 will enable it to carry out advanced R&D tests at the very early laboratory stage and define the key features of a product in early stages.

At today's inauguration ceremony, Prime Minister Marjan Šarec labelled Krka as one of Slovenia's flagship companies, praising the company for its exports trends, development strategies, independence and its role in the local community.

He considers the investment an important milestone and an opportunity for development.

In the first half of 2019, the group posted a net profit of EUR 139.9 million, up 37% from the same period in 2018, on EUR 761.8 million sales revenue, up 12%.

The plan for this year is to finish with EUR 1.38 billion in sales revenue and EUR 172 million in net profit.

The group allocates 10% of its revenue for R&D and new technologies, and has more than 170 development projects for new products are under way.

It generates 29% of its sales with the new medicines which they have started selling over the past five years.

Related: Prevalje Will Be Lek’s Global Centre for Technical Operations, Antibiotics Production Will Go to Austria

01 Oct 2019, 14:18 PM

STA, 1 October 2019 - Lek, the Slovenian subsidiary of Swiss multinational Novartis, has announced phasing out the production of antibiotics in Slovenia's Prevalje in two years' time and moving it to neighbouring Austria. In the meantime, Prevalje will become one of the two locations of Novartis's emerging global centre for technical operations. 

The news comes a month after the company said it would not expand production in the northern town of Prevalje despite having just built a new facility there.

Along with Hyderabad in India, Prevalje will become one of the two locations of Novartis's new global centre which will support the multinational's entire production network, Lek's new director general Robert Ljoljo said on Tuesday.

"The centre will be a hub for logistics, the supply chain, purchases, quality control, production science and technology, and engineering," he told the press after today's meeting with employees.

The new centre in Slovenia will employ "several hundred people", mostly experts in logistics, quality control and production science and technology, he explained.

He said that by assuming an additional role within Novartis, Lek was consolidating its presence in Slovenia and "pledges to remain in Koroška".

All Prevalje workers will be given a chance to retrain for new jobs, explained Roman Burja, director of Antiinfektivi Prevalje, the name of Lek's Prevalje company.

As production is being phased out in the coming two years, new jobs will be created gradually and the production will be gradually moved to Austria's Kundl, he added.

Lek has 250 employees and another 70 agency workers at Antiinfektivi Prevalje.

Production has already been suspended and the employees are on a paid leave, coming to meetings with their bosses to discuss the company's future plans for Prevalje.

Lek managers also met the local authorities, with Prevalje Mayor Matic Tasič hoping "they realise in Ljubljana that Prevalje could well be the seat of the new centre".

Ljolja meanwhile also said that TAB Mežica, a local maker of starter batteries for cars and industrial batteries, was interested in buying the recently-built Lek production facility.

A letter of intent has already been signed, he said, but would not disclose any other details.

Lek also expects some of its Antiinfektivi Prevalje employees to get jobs at TAB, which is planning to branch out into production of lithium-ion batteries.

19 Feb 2019, 10:25 AM

STA, 17 February 2019 - Innovation is the main engine of Novartis's growth and Slovenia will continue to play a crucial role in innovative technologies, chairman of Novartis-owned pharma company Lek, Zvone Bogdanovski, told the STA in an interview. He highlighted Lek's centre for the production of active substances for innovative medicines in Mengeš.

The pharmaceutical industry is undergoing many changes due to digitalisation and population ageing, and Novartis is responding with a new strategy that focusses on the core business, optimisation, investment in ground-breaking transformative therapies and increasing profitability, Bogdanovski said.

Novartis, which owns Lek, Novartis Pharma Services and Sandoz in Slovenia, is betting on innovation. The Swiss multinational has decided to focus on individualised therapies - cell and gene therapy, and the radionuclide therapy used in cancer treatment, which are costly but effective.

"That's the future, not just for Novartis, but for the entire pharmaceutical industry," the Lek CEO said, adding that the future was also in digitalisation underpinned by big-data analysis, artificial intelligence and biological simulations, which could gradually replace clinical studies.

Novartis's generics division, Sandoz, aims to become a leading producer of generic biological drugs, differentiated generic drugs, drugs with added value and a leader in digital therapeutics, Bogdanovski said.

Since competition in generics is tough, "we won't play where we're not competitive, it does not make sense to slowly wither away."

Bogdanovski believes specialised products with high added value produced on a lower scale are the future. "We're not running away from basic generics, we're only shifting our focus."

He gave a drug that was developed in Prevalje last year, a child-friendly, rapidly dissolving Amoksiklav pill, as an example of Sandoz's drug with high added value. "These are the things we'll be working on in the future," he said.

"The pressure on prices is a global fact, so we're increasing our efficiency and productivity in Slovenia as well."

Sandoz and Novartis appreciate the Slovenian know-how and experience. "So far, we've proved we can master certain ground-breaking technologies and contribute to further growth."

Bogdanovski pointed to the construction of the EUR 38m facility for the production of new biological drugs in Mengeš north of Ljubljana, which is to become operational in a year and a half. "This puts us on Novartis's map as a centre for biotechnology."

Ljubljana boasts one of Sandoz's leading development centres. "It's the largest and best equipped development centre that Sandoz has. The knowledge of the experts working there is exceptional. The centre creates more than 20 new molecules a year and launches them around the world. In recent years, we're talking about over a hundred of the most demanding new drugs."

In Prevalje, where Sandoz has a production facility for its flagship product Amoksiklav, a new factory has been built, but is currently on hold. The decision on the continuation of the project in Prevalje has not been made yet but everything should be clear in the coming months.

Last year, two famous brands of Lek's over-the-counter drugs, Persen and Neopersen, were sold to Alvogen, a US pharmaceutical company, but Bogdanovski could not speak of any other potential sales.

"Sandoz's focus is on biosimilars, crucial generic products with high added value, so on the areas we are good at, where we have a competitive edge and cover the key therapeutic areas."

Bogdanovski also said that the sale of Persen and Neopersen and the separation of the generics section in the US were not in preparation for the sale of Sandoz.

While he would not reveal last year's results of Novartis in Slovenia, Bogdanovski said that both revenue and profit were projected to have increased.

With more than 70 drugs in haematology, oncology, cardiology, immunology, dermatology, neurology, pulmonology and ophthalmology, Novartis held a 14.8% market share on the Slovenian pharmaceuticals market last year.

"We're second biggest provider of generic prescription drugs and we're the leader in over-the-counter drugs," Bogdanovski said.

Novartis employed 4,152 people in Slovenia last year, which is 370 more than in 2017. In the last seven years, the headcount increased by more than 2,000.

All our stories on the pharmaceutical industry in Slovenia can be found here

30 Jan 2019, 12:39 PM

STA, 30 January 2019 - The Slovenian pharmaceutical company Lek, a subsidiary of the Swiss giant Novartis, has announced that it had a very successful 2018 compared to the set objectives, while failing to reveal concrete business results. It did say that it employed an additional 370 people last year to increase the workforce to 4,085.

Lek, which is headquartered in Ljubljana, said in a press release on Wednesday that it was expanding the range of production of healing agents for innovative pharmaceuticals.

Last year, the company launched at the Mengeš location the production of three healing agents for innovative pharmaceuticals, which will enter the market in the coming years.

At other locations in Slovenia, Lek launched the final phases of production of innovative biopharmaceuticals, the press release says.

In Mengeš, located some 10 km north of Ljubljana, the company is building a EUR 38m facility for the production of biological agents, which "will boost the role of the location as a key Novartis centre for biotechnology".

Since 2003, Novartis has invested more than EUR 2.3bn in Slovenia, with more than half intended for development, and the rest to modernisation and expansion of the production facilities.

Lek also announced that it employed an additional 370 people last year, with the number of employees standing at 4,085 at the end of 2018, while "continuing to optimise and adjust the production network in Slovenia."

"By increasing the market share to 30.1% in 2018, Lek has solidified its position as the second largest provider of generic drugs in Slovenia and strengthened its position of the market leader in the non-prescription drug segment," the release reads, the full text of which can be read here.

18 Dec 2018, 10:20 AM

STA, 17 December 2018 - Swiss group Kuehne + Nagel inaugurated on Monday one of its largest pharmaceutical logistics centres near Ljubljana's international airport. The 88,000 square-metre complex, which was launched earlier in the autumn, has almost 38,000 square metres of warehouse space.

Kuehne + Nagel did not reveal which company it is servicing, but it is known this is Swiss multinational Novartis, for which this is the largest warehouse in Europe and one of the largest in the world.

The centre is designed for storing and distributing end products and materials for the pharmaceutical industry around the world. Drugs from it travel to 120 countries around the world, mostly by sea and land, but some also by air.

The centre is currently operating at some 70% of its capacity, but should be in full swing by the end of March.

As the Swiss logistics group expects further growth in Slovenia, it has already started building a new high-tech distribution centre nearby.

The centre will be built in three stages, with the first one encompassing some 4,500 square metres of warehouse areas.

Since it does not require controlled temperature and humidity, it is seen as less demanding than the pharmaceutical complex.

Borut Vrviščar, the CEO of Kuehne + Nagel Slovenija, did not want to disclose the value of the investments as he addressed reporters today.

But he did say the group's Slovenian subsidiary planned two-digit growth as well as growth in the number of employees.

There are currently 180 employees working in Brnik, but the figure is expected to rise to around 250 by the end of 2019.

Well-trained and motivated staff part of the appeal of Slovenia

Hansjoerg Rodi, regional manager at Kuehne + Nagel Europe, said that well-trained and motivated staff made Slovenia a good market for investments.

He explained Kuehne + Nagel had decided to invest in the Brnik facility because of a certain deal, but the group now saw new opportunities for growth in the pharmaceutical industry and in other areas, so it kept investing.

Meanwhile, Vrviščar said a new logistics centre Austria's Cargo-partner is building near Kuehne + Nagel's complex was no direct competition as the Austrians were involved in a different segment of the logistics industry.

However, he said they would all benefit from the Slovenian government building a rail link to Ljubljana's Jože Pučnik Airport.

Kuehne + Nagel's new facilities are built by Austria's developer Invest4See and then rented by the Swiss logistics group.

06 Jul 2018, 09:39 AM

STA, 5 July 2018 - Drug maker Krka posted a net profit of EUR 101.4m for the first half of the year, up 11%, on the back of sales that reached an all-time high of EUR 680.5m, an increase of 4% on the year before, the company revealed at Thursday's annual general meeting. 

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