Gedeon Richter Plc., Hungary’s leading drugs producer, has announced on Tuesday that it has entered into a license and distribution agreement with Bayer HealthCare to sell a contraceptive path of Bayer in the European Union.
Richter agreed with Bayer HealthCare to commercialize the low dose gestodene and ethinylestradiolcontaining transdermal contraceptive patch of Bayer in the European Union, in other European countries and also in certain Latin American countries under the trademark of Lisvy, Richter said in a statement on the website of the Budapest Stock Exchange (BSE).
National marketing authorizations have been gradually granted in the majority of European countries following the approval in the European Union in the first quarter 2014.
Under the terms of the agreement Richter shall make an upfront payment upon signature of the contract, and further milestone payments shall be made depending on the progress of the commercialization of the product. In addition, further sales related royalties will become payable to Bayer subsequent to the launch of the product.
In line with the agreement Richter shall be responsible for conducting and funding the PASS Study (Post-Authorisation Safety Study), as required by the European Medicines Agency's Pharmacovigilance Risk Assessment Committee (PRAC).
“This agreement is considered as a further step to enhance our existing branded female healthcare franchise worldwide, being a paramount strategic initiative for our Company", stated Erik Bogsch, Managing Director of Gedeon Richter Plc.
Chief Executive Erik Bogsch told Reuters on the telephone today that they expect the contraceptive patch to generate annual revenues worth 40-50 million euros in three to four years.
The news is positive as it enhances the gynaecology line, perhaps the strongest suit of Richter, via adding a strong brand to the domestic variety of Richter products. It is also good news that Richter picked Bayer as its partner for the sale of a product with great potential. The deal will initially be a cost item for the Hungarian group, which could further deteriorate the profit margin that is already depressed by the collapse of the Russian rouble. However, as sales will rise, Richter’s revenues will go up too. The EUR 40-50 m annual revenues mentioned by Bogsch is 3.5-4.5% of the consensus for 2015 and 3-4% of the 2017-2018 market consensus (according to Thomson Reuters Datastream forecasts).
The announcement has not really affected Richter's share price, although by now the paper worked off almost entirely the nearly 1% fall in the morning. The share price shows stagnation at present.
Charting is displayed using TradingView's technology, a platform, where you can build advanced charts,
spot upcoming trends in the stock screener, and find inspiration in multiple trading ideas
