Polpharma planning break into German market
The country's biggest generic drugs firm, Polpharma, is currently negotiating the acquisition of a German company which, if concluded, will make it the first Polish pharmaceutical to make an acquisition in Western Europe. This could lead to further expansion into super-competitive European markets.
In the three years since its privatization, Polpharma has gone from a struggling state-owned concern to a dynamic company with grandiose plans for the future. Following a 17 percent jump in sales in 2002, the company is now the generic drugs market leader in terms of sales volume and second in terms of value, according to market research company, IMS Health.
The company's future plans focus on Russia and key markets in Western Europe such as Germany, France and the UK. Polpharma is planning to acquire majority stakes in companies already present on those markets.
Jerzy Starak, president of the Polpharma supervisory board and majority stakeholder, declined to name the potential acquisition targets, adding, however, that one of the companies is an active player on the German market.
"The company we're interested in in Germany provides an excellent growth platform into the EU," he says.
The consolidation in the sector by innovative pharmaceutical companies has, over the last few years, produced strong global competitors like GlaxoSmithKline and Aventis. Now, according to Jerzy Starak, the time has come for generic companies to consolidate in Europe.
Some analysts have doubts about Polpharma's chances of success on the German market, "It's a very competitive market," says Britta Hold, analyst at international ratings agency, Fitch Ratings, London, "I can't see any strategic advantage in this move whatsoever."
Experts at managing consultancy, Cap Gemini Ernst and Young (CGEY), however, are more sanguine.
"It could make sense if they are taking steps to cover themselves on both the client and the sourcing side," says Dariusz Zbytniewski, CGEY pharmaceuticals analyst. He says that an effective business model for Polpharma would be to import fine chemicals from countries where they are produced more cheaply, such as India and China, process them in Poland, and then sell on the German market.
Despite Mr Starak's ambition to make Polpharma a household name in the EU, Polpharma itself is the first to recognize that even success on the German market is no ticket to the rest of Western Europe.
"We are already at the first stage of integrating into the EU, which is preparing to enter EU markets by securing compliance with existing regulations," says Paweł Mirowski, President of Polpharma. He goes on to say, however, that each EU domestic market represents a completely separate challenge in terms of the key success factors such as government reimbursement policies.
"Europe is certainly a big challenge," says CGEY's Dariusz Zbytniewski. He adds however, that the drug firm's plans are a welcome sign of a maturing domestic market.
In the three years since its privatization, Polpharma has gone from a struggling state-owned concern to a dynamic company with grandiose plans for the future. Following a 17 percent jump in sales in 2002, the company is now the generic drugs market leader in terms of sales volume and second in terms of value, according to market research company, IMS Health.
The company's future plans focus on Russia and key markets in Western Europe such as Germany, France and the UK. Polpharma is planning to acquire majority stakes in companies already present on those markets.
Jerzy Starak, president of the Polpharma supervisory board and majority stakeholder, declined to name the potential acquisition targets, adding, however, that one of the companies is an active player on the German market.
"The company we're interested in in Germany provides an excellent growth platform into the EU," he says.
The consolidation in the sector by innovative pharmaceutical companies has, over the last few years, produced strong global competitors like GlaxoSmithKline and Aventis. Now, according to Jerzy Starak, the time has come for generic companies to consolidate in Europe.
Some analysts have doubts about Polpharma's chances of success on the German market, "It's a very competitive market," says Britta Hold, analyst at international ratings agency, Fitch Ratings, London, "I can't see any strategic advantage in this move whatsoever."
Experts at managing consultancy, Cap Gemini Ernst and Young (CGEY), however, are more sanguine.
"It could make sense if they are taking steps to cover themselves on both the client and the sourcing side," says Dariusz Zbytniewski, CGEY pharmaceuticals analyst. He says that an effective business model for Polpharma would be to import fine chemicals from countries where they are produced more cheaply, such as India and China, process them in Poland, and then sell on the German market.
Despite Mr Starak's ambition to make Polpharma a household name in the EU, Polpharma itself is the first to recognize that even success on the German market is no ticket to the rest of Western Europe.
"We are already at the first stage of integrating into the EU, which is preparing to enter EU markets by securing compliance with existing regulations," says Paweł Mirowski, President of Polpharma. He goes on to say, however, that each EU domestic market represents a completely separate challenge in terms of the key success factors such as government reimbursement policies.
"Europe is certainly a big challenge," says CGEY's Dariusz Zbytniewski. He adds however, that the drug firm's plans are a welcome sign of a maturing domestic market.
