LITHUANIAN GROUPS PROTEST LICENSE REGULATIONS; SANITAS REPORTS RESULTS

Local pharmaceutical groups have criticised recently introduced Lithuanian regulations, which allegedly prevent new companies from obtaining import licenses, as well as making wholesale permits prohibitively expensive. The new European Union-compliant legislation was approved last month, and reportedly obliges would-be licensees to prove that suppliers meet certain strict criteria.

The new framework is likely to prove a further burden for the local manufacturing sector, which has contracted severely over the last 18 months, as the financial costs of modernisation have been beyond the means of many smaller local drug firms.

Despite the apparent threat to import-focused local companies, local drugmaker and leading exporter Sanitas has posted a 39% increase in sales for 2004, to some LTL43.3mn (US$16.42mn). Sales in 2003 totalled LTL31.15mn (US$11.95mn). The company reported that its historically strong export orders had grown sharply in the year, rising 41% in the first 10 months alone. However, 2005 performance is expected to be less robust, with operating sales forecast at LTL38 million (US$14.41mn) and net profit expected to total LTL6mn (US$2.28mn). Much of the expected decline has been attributed to accounting changes at Latvian partner Grindex, although Sanitas expects to maintain its order levels in the year.

Despite the encouraging results, the company's recent activity has underlined the local manufacturing sector's ongoing consolidation. Sanitas has carried out a number of regional acquisitions in recent months, in an attempt to broaden its international profile. The company's purchase of Lithuanian-Norwegian drugmaker Altisana has effectively concentrated the sector between Sanitas and leading rival Valentis.