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Exports determine Egis performance in future

Exports will continue to determine the performance of Hungarian drug maker Egis Nyrt, while domestic sales grow at a slower pace, deputy-CEO László Marosffy told a press conference on Thursday after the publication of the company's Q1-Q3 report for its business year started October 1, 2005.
Egis expects domestic sales to increase just 9-10% in its 2005/2006 business year and 8-10% in its 2006/2007 business year, Marosffy said. He attributed the slowdown in sales to the slow expansion of Hungary's drug market, growing competition and the austerity measures recently announced by the government.
Egis expects exports to Russia and CIS countries to increase 35% in the 2005/2006 business year and 30% in the 2006/2007 business year. In Russia, Egis expects its products to remain on a list of drugs subsidized by the state. Egis targets a 13-15% increase in exports to Eastern Europe in the 2005/2006 business year, but slower growth in the following year. While exports to countries in the West are expected to slow in the 2005/2006 business year, growth is targeted in the following year.
On the domestic market, Egis expects changes to the drug subsidy system in force from July 1 to seriously affect its turnover, Marosffy said. Under the modified system, subsidies apply only to those drugs which are priced no more than 20% over a reference product picked by the state. Because of the measure, Egis lowered its prices an average 3% from July, which translates as an annual Ft 1 billionn fall in revenue. (Econews)