October 7, 2010 / 9:19 AM / 9 years ago

UPDATE 2-Richter buys Swiss PregLem for up to $461 mln

* Richter’s largest expansion to date

* Esmya drug could hit European market in 2012

* Revenue potential of 100-200 mln euros a year

* Shares gain 4.8 pct, at 4-yr highs

(Adds comments from Richter CEO, updates market)

BUDAPEST, Oct 7 (Reuters) - Hungarian drug maker Richter GDRB.BU said it has bought Swiss-based PregLem for up to $445 million Swiss Francs ($461 million) to expand its female healthcare product portfolio and develop its European markets.

Later on Thursday Richter said PregLem’s new Esmya drug, which completed Phase III clinical trials in June, had a revenue potential of 100 million to 200 million euros ($134 million to $278 million) a year from 2014. [ID:nBUS002188]

Richter said its purchase of a 100 percent equity stake in PregLem Holding SA — its largest expansion to date — included an initial cash consideration of 150 million Swiss francs and further milestone payments of up to 295 million.

The deal values PregLem at up to 445 million francs.

Richter said it would invest at least 100 million francs in PregLem — which is focused on treatments for gynaecological conditions and infertility — in 2011-2013 to assist the commercial development of its product portfolio.

“PregLem will provide a further high added value pipeline to Richter’s existing female healthcare product portfolio, which itself has been based on well established steroid chemistry knowledge,” Richter said in a statement.

“This acquisition will develop Richter’s presence in main European markets and, in addition, Richter’s sales force will sell PregLem’s products in CEE (central and eastern Europe) and CIS (Commonwealth of Independent States) countries.”

PregLem’s lead product, PGL4001 Esmya, for the treatment of uterine myoma, Richter said, adding that PregLem had five products in clinical and preclinical development.

Richter Chief Executive Erik Bogsch told a news conference that PregLem planned to submit a registration request for Esmya this year and, if approved, the new drug could first hit the European market in 2012.

“If registration of the product is successful and the various national insurance authorities approve it, then our estimates for this indication are about 100-200 million euros per year after a run-up period of about 2-3 years,” Bogsch said.

Richter shares were up 4.8 percent at 49,205 forints by 1239 GMT at four-year highs and outperforming the Budapest stock market .BUX which was up 0.8 percent.

U.S. MARKET EYED

Bogsch said the 100-200 million euro annual revenue potential, achievable after a run-up period of three years, applied to the European Union market only and the company would later try to launch the product in the U.S. market as well.

“PregLem has already made steps to find a licensing partner who would do the necessary clinical trials in the U.S. and Canada, and the drug could be sold by a licensing partner subsequently on that market,” Bogsch said.

Richter, which still has about 180 million euros equivalent in cash after the transaction, plans to retain PregLem’s management and for the time being there are no further expansion targets in sight, Bogsch said. (Reporting by Gergely Szakacs; Editing by Mike Nesbit and Karen Foster) ($1=0.9654 Swiss Francs) ($1=.7149 euros)

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