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<p align="center"><b>PLIVA acquires a 66.67% stake of LACHEMA, Czech pharmaceutical |
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company</b></p> |
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<p>PLIVA has announced that it has signed agreements for the purchase of a 66.67% |
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stake in Lachema, the Czech pharmaceutical company, for a cash consideration |
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of USD 26.5 million from the companys institutional investors. The transaction |
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was made via its subsidiary, PLIVA Krakow. The closing of the transaction is |
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expected to take place within 30 days. In accordance with Czech law, PLIVA Krakow |
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will also make a public offer to the remainder of Lachemas shareholders. It |
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is estimated that the total cash consideration for the acquisition of a 100% |
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stake will be between USD 32 and 33.5 million.</p> |
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<p>PLIVA CEO, Zeljko Covic, commented: PLIVAs strategy to consolidate its position |
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in Central and Eastern Europe is confirmed by the acquisition of Lachema, one |
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of the leading companies in the stable, attractive and growing Czech market. |
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This acquisition will bring new synergies between PLIVA Zagreb and PLIVA Krakow. |
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Lachemas portfolio and its position on the Czech market will additionally strengthen |
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PLIVAs presence in the region. Furthermore, as one of the first CEE candidates |
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for admission into the European Union, the Czech Republic offers additional |
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opportunities for expansion into Western European markets and the greater internationalisation |
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of PLIVAs activities.</p> |
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<p>Lachema, which is based in Brno, is one of the leading pharmaceutical companies |
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in the Czech Republic. It develops, manufactures and markets pharmaceuticals, |
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as well as diagnostic preparations and fine chemicals. For the year ending 31 |
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December 1999, the companys revenues are expected to be approximately USD 28 |
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million, and net assets are expected to be USD 32.3 million.</p> |
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<p>Lachemas strength lies in the development, manufacturing and marketing of |
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cytostatics. Cardiovascular drugs and antivirotics complete the companys current |
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portfolio. Lachemas range of generic cytostatic products and a brand new facility |
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for injectable cytostatics, which recently passed German BGA - Bundesgesellschaft |
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für Arzneimittel (Federal Drug Institute) inspection, will enable PLIVA to continue |
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its further expansion in this attractive niche market. In addition, Lachemas |
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generic product, Enalapril, one of the most commonly prescribed ACE inhibitors |
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in the CEE region, will add to PLIVAs important cardiovascular franchise. Lachema |
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is also the producer of Enalapril as an active ingredient.</p> |
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<p>With this acquisition, PLIVA is expected to become one of the major players |
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in the stable, attractive and sizeable Czech pharmaceutical market (assessed |
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at USD 712 million in 1998). In 1998, 34% of Lachemas total sales were exports, |
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mainly to Slovakia, Germany and Poland. PLIVA believes that the registration |
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of Lachemas products in PLIVAs other markets, and their active promotion in |
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14 countries, will lead to further, long-term growth and will increase the proportion |
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of PLIVAs revenue gained internationally. The quality of Lachemas cytostatic |
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portfolio and of its new facility also offers a solid basis for expansion into |
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other Western markets. In addition, Lachemas role as the producer of a range |
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of active pharmaceutical ingredients used in the production of finished cytostatic |
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forms, further strengthens the strategy behind the transaction.</p> |
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<p>PLIVA will work quickly to maximise the synergies between PLIVA and Lachema |
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in the areas of marketing, distribution, product registration and production. |
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Lachema is not expecting profits this year, however an aggressive restructuring |
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process and significant cost reduction program is intended to improve the companys |
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growth prospects, both in sales and net income. Lachema is expected to become |
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a positive contributor to PLIVAs long-term earnings.</p> |
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<p>PLIVA is the largest pharmaceutical company in Central and Eastern Europe. |
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PLIVAs strategy is to focus on research, development, manufacturing and marketing |
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of prescription drugs and over-the-counter products. Among the most prominent |
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of PLIVAs discoveries is azithromycin, a new generation antibiotic that has |
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been licensed to Pfizer. International revenue represents 60% of PLIVAs total |
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revenue. In October 1997, PLIVA acquired Polfa Krakow, one of the leading pharmaceutical |
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companies in Poland, the most attractive CEE market. </p> |