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June 21 (Reuters) - Hungarian drugmaker Richter said on Thursday its Romanian wholesaler subsidiary had been suspended for breaching distribution practices, wiping out 20 million euros ($23 million) of revenues per month and knocking its shares.
The Romanian National Agency for Medicines and Medical Devices (NAMMD) suspended Richter’s Pharmafarm SA subsidiary, pending an agreement on how to address the problem.
“The suspension of the business licence is expected to be revoked once the Authority approves the corrective and preventive measures proposed by the Company,” Richter said in a statement. First-quarter revenues came to 366.3 million euros.
“Pharmafarm is determined to work with NAMMD and provide a set of measures as required by the Authority,” Richter added. It did not specify why Pharmafarm’s licence was suspended.
The suspension is a new headache for Richter, which makes gynaecological, cardiovascular and central nervous system drugs, after European health regulators imposed restrictions on its flagship Esmya medicine to treat benign tumours of the womb.
Richter shares fell as much as 3.4 percent on the Budapest Stock Exchange. At 1137 GMT, the stock was down 2.2 percent at 5,100 forints, underperforming the blue chip index.
Richter spokeswoman Zsuzsa Beke told Reuters the suspension threatened the jobs of the 500 people employed at Pharmafarm. It also jeopardised access to oncological and HIV medicines supplied in the Romanian market by Richter, she added.
She said further analysis of the situation would be required to decide how to restart business at the Romanian subsidiary, which has a market share of about 6 percent.
Richter’s revenues from Romania rose by 11.9 percent in euro terms in the first quarter. The company’s shares have lost a quarter of their value in the past six months, underperforming the Budapest market, which have fallen 10 percent.
$1 = 0.8663 euros Reporting by Gergely Szakacs; Editing by Mark Potter