- Richter to pay 190 million Swiss francs in cash for Finox
- Richter CEO Bogsch sees return on investment in 5-6 years
Gedeon Richter Nyrt. expects the acquisition of Swiss biotech company Finox Holding to boost revenue for Hungary’s largest drugmaker by as much as 80 million euros ($89 million) in three years, Chief Executive Officer Erik Bogsch said.
The company is paying 190 millions Swiss francs ($194 million) in cash for Finox, which produces Bemfola, a biosimilar product that stimulates ovaries to treat infertility, it said in a statement on the Budapest Stock Exchange Thursday. The acquisition complements Richter’s women’s health-care product line and the company expects a return on the investment over the next five to six years, Bogsch said on a conference call following the announcement.
"We feel that there’s no need for additional sales force in western Europe following this transaction and this should make the transaction EPS accretive for Richter,"Bogsch said.
The largest producer of contraceptive pills in central and eastern Europe is counting on exports to western Europe, China and Latin America to counter sales woes in Ukraine and eastern European Union member states. In coming years, sales of the gynecological drug Esmya and the anti-psychotic agent Cariprazine are expected to prop up the company’s revenue, which the management projected will decline 5 percent in 2016.
"Finox’s Bemfola product is an excellent match for Richter’s gynecological product portfolio and we see a good chance for Richter’s traditionally strong European sales force to successfully position it on the market," analysts at Budapest-based brokerage Equilor Zrt. said in an e-mailed note.
Richter shares gained as much as 1.7 percent and traded 0.9 percent stronger at 5,615 forint by 10 a.m. in Budapest. The stock has advanced 2 percent this year, compared with a 11.9 percent rise in the benchmark BUX index.
Richter obtained global rights for Bemfola, which was granted marketing authorization in the EU in May 2014 and is currently sold in more than 20 countries. The deal excludes sales rights in the U.S.
Richter expects to consolidate Finox in the second half of 2016, Bogsch said.