Challenging Industrial Environment
Industry related problems that accumulated slowly over past decades suddenly broke out. Issues such as lengthy product development, increasing regulatory hurdles and exposure to constraints of national healthcare budgets underlined the vulnerability of the pharmaceutical business.
New social phenomena such as aging population and substantial changes in the lifestyle of the urbanized Western societies have also called for adequate responses from the pharmaceutical industry. Certain disease groups such as elderly dementia, Alzheimer disease or obesity gained more attention. At the same time younger generation requires new, non-oral approaches to contraception such as patches or hormone releasing devices. Generally speaking new delivery technologies (sprays, etc.) are well received by lifestyle driven patient groups.
Following the wide success of therapies across a number of cardiovascular diseases there is an increased demand to focus on oncologic and immune deficiency conditions, a demand which can be best addressed implementing high complexity novel technologies like nanotechnology or biological products.
Choosing a strategy
Many of the generic companies which found themselves impacted by the double constraints of increasing peer competition and restrictive (national) budgetary environments were to select different strategies aimed at securing their future presence on the pharmaceutical market. One of the choices was to become global and retain margins through improving economies of scale. This goal could be achieved by conducting intense M&A activities which has resulted in an unprecedented concentration of the industry worldwide. The other way to secure margins and EPS growth was the implementation of a more complex, specialty driven, high added value business model.
Richter, having preserved its original research over the past century and having invested significant resources in building up one of the widest female healthcare portfolio worldwide, was a natural candidate for the latter strategy, i.e. go specialised.
Pillars of growth
The previously detailed challenges encouraged Richter's Management to implement a high added value driven specialty pharma business model with a primary focus on organic growth strategy complemented with selected acquisitions primarily in field of Women's Healthcare. Consequently Richter has invested significant resources in building up one of the widest Women's Healthcare portfolio worldwide, it preserved its original research founded over a century ago and – uniquely in Central and Eastern Europe – it established biosimilar development and manufacturing facilities to address the changing demand for oncological and immunological diseases.
Furthermore, it is the company's strategic objective is to rebalance its geographic exposure. Richter intends to penetrate the fast growing markets of Latin America and China to compliment its decade-long presence in Central Eastern Europe and the CIS. Beginning in the middle of the 1990s, the company strengthened its position in the US through long term agreements. In addition, the acquisition of Grünenthal's women's healthcare portfolio in 2010 provided an opportunity for Richter to establish its own sales network in Western Europe.
Innovation and high added value
One of Richter's most important niche areas is its Women's Healthcare business. The Company has unique and long-term experience in this field dating back to when its founder, Mr Gedeon Richter, a pharmacist, started to conduct research into steroids. This was at a time when they had complete novelty. Since then the Company has consistently utilised its pharmaceutical manufacturing facilities to undertake the required complex and lengthy development processes which result in high quality gynaecological products. Richter makes available one of the world's broadest range of Women's Healthcare products while still continuing to extend its product portfolio. Further details
Original Research – Focus on Central Nervous System
Research of new chemical entities has always been of paramount importance to our corporate strategy. Since 1998 major changes have occurred in the structure of Richter's research organisation. State-of-the-art laboratories have been built in the area of neuropharmacology, molecular biology, kinetics and metabolism and during the late 1990's pharmacological facilities have also been upgraded, while a new chemical-analytical research centre that meets the highest quality and technological requirements has also been constructed in 2007. In addition to modernisation of the technological infrastructure, a restructuring strategy has been implemented to ensure that the quality of science, innovation and speed are critically important factors in our research and to increase the opportunities for the research system to deliver high quality compounds. Following a major review of our research pipeline and resources, a strategic decision was taken to focus our original research activities exclusively on the CNS area. Further details
Biosimilar product development
Biopharmaceuticals (often referred to as 'biologics') have taken a significant share of the global pharmaceutical market in the last two decades. Within the European Union, every third new drug authorisation is of biotechnological origin. In 2015, globally, seven of the top ten selling drugs were biopharmaceuticals. Biologics account for just under 50 percent of all products at clinical phases within development pipelines of pharmaceutical companies globally. Further details