Financial crisis and drug production output

The first effects of the financial crisis had a minor impact in pharmaceutical producers’ turnover, at least for the moment, yet the profit margins were severely crippled.

“I believe the 2008 financial results are no longer the yardsticks to determine the companies’ dynamics for this year. The domestic landscape has changed dramatically and as of fourth quarter 2008, this has impacted the issuers’ earning results”, said Andreea Gheorghe.

Romanian pharmaceutical companies, she added, remain responsive to factors like depreciation of the exchange rates, (that can majorly damage the profit margins, especially in the event of a low export share of total output).

“For the moment, the companies’ turnovers were not affected. The rising costs on local currency depreciation, lending costs and the dwindling value of stakes held (in case of BIO) have led to a reduction of profitability”, said Mirela Maxim.

So far, we’ve seen a mild increase of operating profit at Antibiotice and Biofarm until the release of fourth quarter results in 2008, when the companies marked down losses.

“At Biofarm, the financial losses were so big that that the company recorded a negative outcome in the last quarter, mainly because of the basket made up FIC shares set up in late 2007, when the shares neared record-highs”, said Paul Brendea.