Lek changes plans for Romania

The acquisition of Slovenian Lek Company by Swiss Novartis Group will entail a major reconsideration of the operations of the two companies in Romania: the newest Lek factory in Targu Mures will change its core business and the production of penicillin could be gradually relocated to other factories in the Novartis Group over the next few years, Metod Dragonja, Lek chairman told Ziarul Financiar.

Furthermore, Lek’s distribution division in Romania will be co-ordinated by a specialised Slovenian company wherein Lek holds stake. #leadend#

Lek was taken over by Novartis, one of the leading drugmakers in the world at the end of last year, with the strategy to integrate Lek’s operations with those of Sandoz (former Biochemie), Novartis’ generic drugs division, worked out over the last few months.

The decisions will make a major impact on the Romanian drug market, as well, where Lek and Sandoz may create the leading player on the generic segment and the second-leading player on the overall market.

“Lek and Sandoz’s brands will continue to exist separately on the Romanian market. The product portfolios of the two companies will be maintained and maybe broadened, even though they will overlap in certain therapeutic areas. We will see that these overlaps do not affect sales, ” Dragonja specified.

Lek is both an importer and a domestic producer, as well as a powerful player on the antibiotics market, while Sandoz was only operating through imports.

At the end of last year, Lek had come to account for 3.9% of the Romanian market according to the data provided by research company Cegedim Romania. It was the fourth leading player after GlaxoSmithKline (UK), Sicomed Bucharest and Pfizer (US).

Following the integration of Sandoz and Lek’s operations on the Romanian market, Novartis’ generic division outran Sicomed Bucharest. The group has actually become, that is if including the imports of brands (Novartis patent drugs) here, the second top player on the Romanian market, accounting for 7.1% of it. The market leader, GSK, accounts for 11.5%, Pfizer for 6.1%, while Sicomed for 5.5%.

The most important decision for Romania after the Lek-Sandoz integration is changing the production structure of the new drug factory Lek is building in Targu Mures, to join the old one it came to hold following takeover of Pharmatech Targu Mures.

Lek bought 90% in Romanian producer Pharmatech from several Romanian investors three years ago, following a $9.5 million deal.

Lek’s new factory in Romania, a nearly $13 million investment, will become operational next year and will no longer make cephalosporins, as initially planned, but macrolyde antibiotics instead.

“Sandoz already has a significant cephalosporin productive capacity, though not the same can be said about macrolydes. This is why it was decided to have the new Lek factory in Targu Mures change its specialty and become Novartis’ most important macrolyde factory in Europe. This and the high technology to be put to work will lead to exporting more than 90% of the total output,” Metod Dragonja said.