The Serbian pharmaceutical market is expected to grow at a 5Y CAGR of 8.72%, Market Research reported yesterday. The value of the market is expected to top RSD 113.77bn (US$ 1.69bn) in 2013 versus RSD 74.9bn (US$ 1.28bn) in 2008. The main characteristics of the Serbian pharmaceutical market are an advantageous geographical position with good access to the rest of Europe, a largely untapped pharmaceutical market, and a low cost and abundant supply of skilled labour. Due to limited financing available for healthcare in general (both in the private and public spheres), generics and over-the-counter (OTC) medicines are forecast to post the strongest gains in the years ahead. In July 2009, Macedonia’s leading pharmaceutical manufacturer Alkaloid AD announced plans to begin drug production in Serbia. The € 4m project, which will be realized in co-operation with Serbia’s Infarm, will eventually result in the manufacture of 19 types of drugs. According to Alkaloid, which already operates a subsidiary in Serbia – Alkaloid d.o.o – the portfolio will target export markets, primarily Russia. At the same time, the government announced the planned sale of local drug producer Galenika in October 2009. The majority stake will be sold via tender rather than through the initial offer of stocks as previously planned. Greek company Alapis, which owns a drugmaker and a wholesaler in Serbia, has already been linked with the Galenika purchase, although other European generic players are likely to join in the bidding.
Our view:
We expect this news to have a neutral impact on Alkaloid’s trading since the market was already aware of the expansion into the Serbian market.