Lek Acquires the Polish Pharmaceutical Company Argon SA
Ljubljana, February 16, 2001 – Lek d.d. (Lek) the Slovenian pharmaceutical company announces signing a contract to acquire an 89.45% share of the Polish pharmaceutical company Argon SA (Argon). This step in the acquisition of the Polish company needs to be finalized by the approval of the Polish government and the Argon shareholders.
Both companies recognize the advantages of their merger on the Polish market since their products for the treatment of cardiovascular diseases and their non-prescription drugs are complementary. Establishing a home base in Poland assures Lek’s future growth and expansion in the Polish market.
The pharmaceutical company Argon based in Lodz, concentrates on the manufacture of pharmaceutical products and ingredients and non-prescription drugs. The company was established in 1945. The present company is the result of the 1976 merger of the chemical companies Argon and Organika into a state owned company called Zaklady Chemiczne Organika-Argon. In 1996, the employees formed a joint stock company Zaklady Farmaceutyczny Argon. In November 1999, the employees together with other financial partners signed a ten-year lease of the liquidated state company Zaklady Chemiczne Organika – Argon.
The Polish market offers one of the most important opportunities for the pharmaceutical industry in the world. The pharmaceutical market in Poland grows at an annual rate of 11%, compared to 6 to 7% growth worldwide. In the year 2000, the Polish pharmaceutical market accounted for 2.5 billion EUR. Lek’s sales were 45.9 million EUR, translating into a 1.8% market share. Argon sales reached 14.8 million PLZ (3.5 million EUR). Lek estimates that together with Argon their share of the Polish market in 2001 would reach 56 million EUR.
Lek has been established on the Polish market for over thirty years. In 1991, Lek established one of the first foreign owned pharmaceutical subsidiaries in Pruszkow, near Warsaw. Lek employs over 150 people in Poland.
The acquisition of Argon strengthens Lek’s position in the Polish market, giving it a home base and the competitive edge required for this challenging market. Lek’s operations in Poland will be maximized through gradual consolidation of production lines and business enterprises.
Lek and Argon expect to complete the acquisition by mid 2001 and to have Lek Polska and Argon legally merged into one company by the end of 2001.
Their combined product portfolio is expected to increase the sales of non-prescription drugs and products for the treatment of cardiovascular diseases. This will fulfill Lek’s main objective in Poland.
Acquisition of Argon also means expansion of Lek’s product line for the treatment of cardiovascular diseases. New products, such as isosorbide mononitrate, will be added to its existing line. The sale of this drug, which is used in the treatment of angina pectoris, has been increasing in Poland and elsewhere. Lek plans to successfully market this and similar drugs internationally while continuing to expand sales in existing markets.
Metod Dragonja, the president of Lek emphasized the following upon signing the contract: “Establishment of a home base in Poland gives Lek a solid foundation to continue developing and growing successfully, so that we can expect to improve our competitive advantage in the rapidly expanding Polish market."