The Budapest Municipal Court has ordered, in a first-instance ruling, Ceva-Phylaxia Rt to pay a license fee and interest of Ft 277 million to Phylaxia Pharma Rt for vaccines it sells under a contract signed in 1991.
The court also struck a section in Ceva-Phylaxia's articles of incorporation under which the rights to use the vaccines were transferred. An appeal may be lodged against the decision until June 14.
Hungarian vaccine maker Phylaxia set up a joint venture to produce animal vaccines with the predecessor of France's Ceva Sante Animale, the owner of Ceva Phylaxia, at the start of the 90s. At the same time, Phylaxia converted into a company limited by shares, called Phylaxia Pharma, and limited its production to animal medicines and nutritional supplements.
Phylaxia Pharma had losses of Ft 126.3 million in 2005, compared to losses of Ft 119.4 million in the previous year. Although the company's exports quadrupled, they were not enough to offset falling domestic sales: total revenue fell 15% to Ft 656.6 million.
Phylaxia Pharma is 58.9% owned by foreign institutional investors. Its majority owners are AD TISA Novi Knezevac with 19.91%, Faran Laboratories S.A. with 9.33%, Finance Service Partners Ltd with 7.8% and Noveco Inc with 5.4%.
Ceva-Phylaxia controls a quarter of Hungary's market for veterinary products. Exports, to Asia and the Middle East, as well as Central and Eastern Europe, account for 60% of its sales.