Gedeon Richter Media Richter publishes Q2 results
Richter publishes Q2 results
06/08/2024
Sustained double-digit growth and several strategic transactions in the first half of 2024
  • Pharma revenues grew by 16% to HUF 213bn in Q2 2024, bringing H1 2024 pharma revenues to HUF 413bn (EUR 1.06bn), up 14% YoY. FX-adjusted revenue growth was 12.5% in H1, as the weaker HUF provided some tailwind to the reported numbers
  • CNS, WHC and BIO segments sustained double-digit sales growth, while GenMed also improved significantly in Q2 2024
  • Net profit more than doubled to HUF 138bn in H1 2024, as unrealized, non-cash FX gains supported the results (vs. large FX losses a year ago)
  • Additional strategic transactions were concluded in Q2, bringing the number of major corporate deals to four to date in 2024
  • Full-year 2024 guidance is further reiterated for both Pharma revenues (EUR 2.15-2.25bn) and Clean EBIT (EUR 725-750mn) in light of the strong H1 results. M&A deals may add 1ppt to sales growth, but may have a small, around EUR 10mn negative impact on EBIT in 2024

 

Gedeon Richter Plc. (“Richter”) announced today its Q2/H1 2024 financial results.

Pharma revenues grew by 16% to HUF 213bn in Q2 2024, bringing H1 2024 pharma revenues to HUF 413bn (EUR 1.06bn), up 14% YoY. Excluding currency changes (ex-FX), revenue growth was 12.5% in H1, within the FY 2024 guidance range. The impact of the RUB weakness is slowly fading, while the weaker HUF provided some tailwind for reported sales in Q2, across all segments.

Three of the four business units (CNS, WHC and BIO) sustained double-digit sales growth, while GenMed also improved materially in Q2 2024 after a lackluster Q1.

  • CNS revenues increased by 22% YoY, as Vraylar sales by Abbvie continued to increase double-digit (+18% YoY in Q2), while Reagila® sales were up by more than 30% both in Richter’s own network and at other partners too. The stronger USD and weaker HUF also supported royalty revenues reported in HUF terms.
  • Women’s Healthcare was an outstanding performer with 15% revenue growth in H1 2024. The key brands (EVRA®, Drovelis®, Ryeqo® and Lenzetto®) remained the major growth drivers, but the traditional portfolio also performed well. Sales growth was particularly robust in LatAm and APAC (China), partly driven by the timing of shipments, while Western Europe also posted double-digit sales growth.
  • BIO revenues (ex-FX) increased by 20% YoY, as CDMO rose from a low base, while Terrosa® sales were supported by advance manufacturing and shipping to partners due to an early and longer production maintenance shutdown.
  • GenMed returned to double-digit sales growth in Q2. Seasonal factors disappeared, Eastern European sales started to catch up, price and volume/mix impact remained supportive helped by new launches and the FX impact also turned positive in Q2.
  • Changes in R&D pipeline affected RGH-706, as based on the preliminary data of the Phase II study, Richter decided not to pursue further development of the molecule in hyperphagia associated with Prader-Willi syndrome. On the other hand, the European Medicines Agency (EMA) has accepted Richter’s two marketing authorization applications (MAAs) for its proposed biosimilar to denosumab, a very important milestone for Richter, being the first biosimilar monoclonal antibody in the broadening portfolio.

Gross profit (pharma) grew by 15% to HUF 289bn and gross margin rose by 0.6ppt to 70.0% in H1 2024.

Clean EBIT (pharma) reached HUF 136bn in H1 2024 (EUR 348mn), up 21% YoY. If adjusting for FX (ex-FX) Clean EBIT reached HUF 133bn, up 18%. CNS, WHC and GenMed all contributed to the earnings growth, while BIO EBIT losses were broadly flat.

Reported EBIT came in at HUF 126bn in H1 2024, the difference to Clean EBIT mostly attributable to inventory impairment charges.

Net profit (attributable to the owners of the parent) amounted to HUF 138bn in H1 2024, around doubling YoY. The change continues to be driven by volatile exchange rate movements. In H1 2024 Richter booked HUF 21bn FX gains (nearly all of that non-cash, unrealized gain on working capital items) due to the weaker HUF, as opposed to large FX losses of HUF 49bn suffered a year ago.

Free cash flow (before M&A) amounted to HUF 111bn in H1 2024, more than doubling YoY, driven by the strong operating cash flow and the lack of FX losses this year. M&A deals used up all the cash generated and even more, as Richter spent over HUF 130bn on strategic acquisitions in H1 2024 (Formycon, Helm, Mithra, BCI). The regular dividend payment (HUF 78.8bn, or HUF 423/share) also took place in Q2 2024 and as a result the net cash position of the company declined substantially, by more than HUF 100bn.

Additional strategic transactions were announced during the second quarter (following the Formycon and Helm deals in Q1). Richter agreed to acquire world-wide rights related to Mithra’s lead platform, based on Estetrol (E4), a unique, native estrogen. Richter also took over Mithra’s R&D assets and its scientific team and acquired BCI, a Belgium-based biotech company, carrying out innovative research in a variety of Women’s Health conditions. These steps provide Richter with capability and know-how to set foot in original gynecological research and cover the whole WHC value chain.

 

Gábor Orbán, CEO commented the results:

“I am very pleased with our strong double-digit growth in 2024 in three of our four segments with General Medicines also catching up impressively during Q2. Profitability improved across the business and we remain well on track to meet our full-year ambitions and targets.

We have made major progress lately in our key Women’s Healthcare franchise. Acquiring Estetrol and a specialized R&D capability will allow us to sustain growth, solidify our leadership and continue to provide innovative solutions to women in areas of significant unmet needs.

EMA’s acceptance of our denosumab file reflects an important milestone in building the biosimilar portfolio. Half-way through the year we have already achieved a lot thanks to our dedicated and talented teams across the globe, and we are not done yet for 2024… stay with us!”

 

About Gedeon Richter Plc.

Gedeon Richter Plc. (www.gedeonrichter.com), headquartered in Budapest/Hungary, is a major pharmaceutical company in Central Eastern Europe, with an expanding direct presence in Western Europe, China, Latin America, and Australia. Having reached a market capitalization of EUR 4.3bn (USD 4.7bn) by the end of 2023, Richter's consolidated sales were approximately EUR 2.1bn (USD 2.3bn) during the same year. The product portfolio of Richter covers many important therapeutic areas, including Women's Healthcare, Central Nervous System, and Cardiovascular areas. Having the largest R&D unit in Central Eastern Europe, Richter's original research activity focuses on CNS disorders. With its widely acknowledged steroid chemistry expertise, Richter is a significant player in the Women's Healthcare field worldwide. Richter is also active in biosimilar product development.

 

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