Hungarian Richter has a bold strategy to remain world leader in pharmaceutical and biotechnology sectors
Richter’s new long-term strategy aims to double revenue by 2035, CEO Gábor Orbán said on Wednesday.
The new long-term strategy, Richter 2035, approved by the board of directors, envisages that the company’s non-CNS revenues will rise by 7-8pc a year on average to EUR 3.2-3.5bn by 2035.
Péter Turek, head of the women’s healthcare division, said the aim is to double revenue and R+D investments and significantly boost profitability by 2035 by maximising potential in Richter’s current portfolio and introducing innovative products. In the next decade, women’s healthcare will be the biggest revenue- and profit-generating division, he said.
Kristóf Kóczián, head of the neuropsychiatry division said Richter will strive to maximise the value of its key product cariprazine until its patent expires in 2029, while also ensuring that the division will remain a value-adding business in the 2030s and 2040s. The existing unmet needs, the enormous social cost of mental disorders, the ever-increasing demand for treatments and promising innovations continue to make original research in neuropsychiatry an attractive proposition, he said. He identified the US as the most important market, where Richter is developing and selling products with partners.
Richter also expects to double revenue from generic medicines by 2035, achieve over 20pc clean EBIT margin much earlier while increasing the freshness index of its portfolio (the ratio of products introduced in the past five years) to over 15pc and raise R+D spending to 7pc of revenue, Bence Kovacs, head of the General Medicines division said. The division had annual growth of 6pc in the region in recent years.
Biosimilar products are the fastest-growing subsegment in pharmaceuticals, currently Richter’s smallest division, division head Erik Bogsch said. The expected multiple product launches and the expanded contract manufacturing and development capacity will also make biotechnology Richter’s fastest-growing business, with strong double-digit growth by 2035. Key therapeutic area focus includes attractive markets of immunology and musculoskeletal therapies. Richter aims to reach profitable operation in the business by 2027. Four new products will be launched in the next 18 months, he said.
Gábor Orbán said based on the financial outlook for 2025-35, Richter sees an EUR 200m annual base dividend as sustainable even with the expiry of the cariprazine patents, with a significant upside to dividends in the first half of the period.
In an investor presentation Richter said that it plans to pay out 30pc to 50pc of its adjusted net income, providing upside to dividends, particularly in 2025-2030 and would also avoid accumulating cash beyond 15pc of total assets by paying out excess cash as dividends.
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