German drugmaker Stada has posted healthy increases in revenues and profits in the first half of 2011 on the back of increased international sales and the expansion of its branded products business.
The group posted a 7% rise in operating profit to 154 million euros, on record sales up by the same margin to 830 million euros. Most of the revenue increase came from international sales, which advanced 15% thanks to a strong showing in Russia, the firm's second-largest market after Germany.Russian sales rose 25% to 121 million euros, backed up by gains in Belgium, Spain and Italy. Turnover in Germany fell by 10% to 233 million euros however, thanks to "the ongoing difficult local framework conditions for generics" in the country, said Stada in its interim statement.
The German government has embarked on a series of cost-containment measures aimed at reducing its drugs bill, including price reductions resulting from discount agreements. A new law was passed in November 2010 which limits the amount that pharmaceutical companies are allowed to charge for new prescription drugs.
International expansion has been a key objective for Stada in recent years, and sales outside Germany now account for 72% of its business.
Increasing its portfolio of branded products has been another objective. Stada chairman Hartmut Retzlaff said contracts signed recently on the purchase of new brands in Central and Eastern Europe as well as in the Middle East "will help reduce our historic dependence on the German market even further in the future."
Branded products recorded a sales increase in the first half year of 2011 of 14% to 231 million euros, and now account for nearly 28% of total group sales. Stada said it remains on track to achieve its target of 2.15 billion in group sales in fiscal 2014.