Pliva: Europe is Not Enough
Buying Sobel Holdings makes Croatia's Pliva one of the first eastern European companies to buy into the US market. It's doing so cleverly, leveraging future revenues from its biggest product, azithromycin, to fund the deal, and executing it through a tax-efficient Hungarian subsidiary.
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After a fervent US expanstion capped by the surprise $150 million licensing of Indevus OAB treatment Sanctura, proprietary ambitions at the Croatian generics play Pliva may be stalling. Sanctura sales have disappointed, illustrating again the challenges of taking a specialist approach to primary care marketing. Pliva's best bet may be to switch growth engines to its promising biogenerics portfolio.
Pliva's not the obvious choice of US marketing partner for Indevus' overactive bladder drug Sanctura. With no primary care presence in the US, the company will likely face an uphill battle to commercialize the drug; more so given the stiff competition in OAB from some of the world's leading Big Pharma marketeers. Yet the deal's about more than success with Sanctura. It's about both parties moving up the value chain--Pliva into the US proprietary drugs arena and Indevus into sales and marketing.
The formation of Zentiva through the merger of Léciva and Slovakofarma-the leading pharmaceutical players in the Czech and Slovak markets respectively-propels the merged entity into the top ranks of the CEE pharmaceutical industry and gives the company a firm base upon which to expand internationally. Yet unlike the majority of its peers who are looking to the West to drive future growth, Zentiva is looking East. The plan: to tap into the rapidly growing and less crowded CEE markets and lead the consolidation of the industry across the region.