Pliva, the largest drugmaker in Eastern Europe, saw revenues drop 19% in the fourth quarter of 2005, as it bore the brunt of the loss of patent protection in the USA for azithromycin, an antibiotic sold by Pfizer as Zithromax.
The loss of royalties from Zithromax as the blockbuster surrendered to generic competition contributed to a 71% drop in royalty revenues at Pliva to $18 million, out of total group sales of $264 million for the quarter. On the plus side, Generic sales rose 13% to $209 million.
And while the top line was hit by the patent expiry, profits were also impacted by charges related to the sale of Pliva’s proprietary pharmaceutical businesses as it strips down to a generic drug pure-play. Earnings before interest and taxes fell to $1 million, as Pliva booked $74 million in charges during the period. Overall, Pliva posted a net loss of $41 million in the quarter.
The Croatian drugmaker said it expects the azithromycin patent expiry to continue to affect the business this year, although group sales should increase by about 10%, driven by its generics activities which should see sales growth of 15%.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) is forecast at around $180 million for 2006.