* To pay several million euros upfront to Bayer -CEO
* Sees later milestone payments worth several million euros
* European post-approval study to cost 40 mln euros over 5-6 yrs
* Shares marginally stronger, outperform wider market (Adds more comments, detail, market reaction)
BUDAPEST, Jan 27 (Reuters) - Hungarian drugmaker Richter agreed a licence and distribution deal with Bayer HealthCare to sell a contraceptive patch in Europe which it expects to produce annual revenues of 40-50 million euros.
The product, sold under the Lisvy trademark, could be launched in Europe in the third or fourth quarter of this year, Chief Executive Erik Bogsch told Reuters on Tuesday.
“We expect about 40-50 million euros in annual sales within three to four years,” Bogsch said.
Richter, which makes gynaecological, cardiovascular and central nervous system drugs, earned 35 percent of its revenues in the female healthcare market in the most recent nine months.
Last month the company, which has a market capitalisation of $2.6 billion, warned of a significant loss in the fourth quarter as the declining value of the Russian rouble hit turnover and operating profit.
“We will pay several million euros upfront (to Bayer) upon signing the agreement and further several million euros in milestone payments later, as well as royalties,” Bogsch said.
The water-resistant patch, which delivers hormones into the body via the skin, has to be changed once a week in a three-week cycle, a company spokesman said.
Bogsch said a so-called Post-Authorisation Safety Study required by the European Medicines Agency would cost Richter about 40 million euros ($45 million) over the next 5-6 years.
At 1004 GMT, Richter shares traded 0.7 percent higher at 3,815 forints ($14) on the Budapest Stock Exchange, outperforming the blue chip index, which gained 0.2 percent.
Bogsch said Lisvy would not entail additional distribution costs as Richter could sell it through its existing network.
He added that Richter raised prices “wherever possible” as of January in its crisis-hit Russian market, where it makes most of its turnover.
As part of efforts to reduce its reliance on places like Russia, the company announced a positive result from a final stage clinical trial of cariprazine to treat schizophrenia in adults.
Bogsch said that outcome was a “breakthrough,” which could help set the medicine apart from rival products.
He said that cariprazine could be the first product that treats the depressive symptoms associated with schizophrenia.
“Cariprazine is the first product that proves on the basis of existing clinically accepted protocols that it is effective,” Bogsch said. “This gives us a very serious chance to differentiate cariprazine from other products in the market.” ($1 = 275.84 forints) ($1 = 0.8856 euros) (Reporting by Gergely Szakacs; editing by Jason Neely)