Europharm, the second largest local pharmaceuticals producer with more than EUR100 million in yearly revenue, was the British group’s export platform and up until the announcement, there had been no clue as to the plant leaving GSK’s network.
Moreover, the officials of the group even said four years ago that they planned to take Europharm’s exports to $300 million. The plant is currently making mostly anti-depressants and drugs used to treat HIV/AIDS.
Europharm is one of the more than 70 plants that Glaxo operates throughout the world and made 36 million pill packs in 2012, while its capacity is 90 million.
GSK is trying to sell the plant and says it is in talks with several parties interested, but if negotiations fail, it will close it.
The plant in Brasov is the not the only one of the UK group affected by its decision to streamline its global operations. GSK got an offer for its thrombosis drug business and for its plant in Notre Dame de Bondeville (France) this summer.
The group made the decision to start closing plants after reviewing their oral drug production capacity and deciding it was too high. What sealed the Europharm plant’s fate was its size, in that it was too small compared with others and “just happened” to have the same capacity as the owner was seeking to downsize.
How did GSK end up having to do it?
The company officials explained that patents for certain products, including one made in Brasov, had expired, so sales had gone down, while the trend on the global pharmaceutical market is to go for injectable drugs not pills as Europharm makes.
It has recently announced there is a lot of interest in the plant and the potential buyer search ended at the beginning of November 2013. GSK is now conducting talks with the investors interested, which should be completed in the first quarter of 2014, the company said.
If Europharm is closed, production of local drug producers, mostly owned by multinationals, will go down 20%.
Brief Europharm history
Europharm is a business started by entrepreneur Mihai Miron in the early nineties, who then sold it to GSK in several stages beginning 1998.
GSK has invested more than $100 million in Europharm since 1998. Europharm posted EUR104 million revenue and EUR11 million net profit last year, according to Trade Registry data.
These results put it on the second place among local pharmaceutical producers behind Terapia Ranbaxy.
Europharm is one of the largest local pharmaceutical exporters, selling 60% of its production abroad.
It started exports in 2008 and GSK transferred products like the Seroxat anti-depressant and Retrovir for HIV/AIDS treatment to the plant. Europharm’s products reached about 80 countries, among which Denmark, Turkey and Italy, in 2011.
(English version by Loredana Fratila-Cristescu)