Gedeon Richter, which is by far the largest Hungarian-owned pharmaceuticals company and the biggest domestically-owned drug
manufacturer in Eastern Europe, has been setting the pace for the sector overall. The company has made acquisitions in Switzerland
and Germany, with a focus on gynecology products and oral contraceptives.
Gideon Richter is also building a follow-on biologics plant in Debrecen in eastern Hungary with the aim of marketing biosimilars
in Europe in two years. In late 2010, the company entered into a collaboration agreement with Mochida of Japan on the development
and marketing of Richter's follow-on biologics in Japan.
Approximately 90% of Richter's €992 million ($1.4 billion) sales in 2010 came from abroad, mainly from Russia (22%), Poland,
and Romania. The company's approach for remaining competitive in the long term is to maintain a portfolio of high-added value
"We are able to adopt this new strategy because we have the freedom of being an independent company without being owned by
an international pharmaceutical company," says Zouzsa Beke, Richter's communications director. "We are also doing it without
the backing of a strong government industrial policy like that in other EU countries. There are R&D incentives from the government
but they are not significant, and capital allowances only apply to large investments."
Some of the Hungarian subsidiaries of international companies, such as Egis, which is majority-owned by Servier of France,
are also planning to enter the follow-on biologics sector, although not necessarily as producers initially.
Hungary's National Economy Minister Gyorgy Matolcsy stated last month that the government wants the country to be one of the
top 10 leading biotechnology centers in the European Union by 2020–2025.
However, small biopharmaceutical companies, which make up most of the fledgling biotech sector outside the multinational firms,
complain about lack of funds from Hungarian financiers.
"The few venture capitalists are not interested in biotechnology because they don't understand it, and the banks are even
more reluctant to invest in what they see as high risk innovations," explains Zsolt Lisziewicz, chief operating officer of
Genetic Immunity, Budapest, a biopharmaceuticals start-up in nanomedicine immunotherapies. "We would like to build a plant
in Hungary once we have a commercial product, but we may have to do a NASDAQ floatation to get the funds."
Hungary, which is outside the euro zone, is still gripped by a credit squeeze after having to be rescued by the International
Monetary Fund (IMF) four years ago. With easier access to funds, its pharmaceuticals sector might be performing even better
in the European markets.
Sean Milmo is a freelance writer based in Essex, UK.