In 1999 Lek achieved sales objectives set

14. 1. 2000

Sales growth highest in Poland and Slovenia – Outstanding international sales growth of Lek top product Amoksiklav – Breakthrough of Amoksiklav on the EU markets in 2000 Ljubljana, 14 January – Despite tough conditions in certain markets, the Slovene pharmaceutical company Lek d.d. achieved its sales objectives set for the year . In this period Lek realized sales to the amount of SIT46.5 billion, whereby it achieved a slight growth of its total sales as compared to the previous year. By operating effectively in the domestic market and in the markets of Central and Eastern Europe, Lek managed to compensate for the loss due to the slightly lower sales in the markets of Croatia, Russia and the USA. Last year Lek’s top product was Amoksiklav reaching in 1999 an extremely high sales growth in foreign markets, while this year Lek is planning to start its sales in the EU markets.

In the domestic market Lek realized sales to the amount of SIT12.9 billion (which accounts for 27.7% of Lek’s total sales), in Central and East-European countries and in Croatia the sales reached 34.3% of Lek’s total sales, in the countries of former Soviet Union 11.6%, in developed countries 10.1%, in developing countries 9% and in South-Eastern Europe 7.3% of Lek’s total sales.

Last year Lek increased its sales volume in two key markets: in Slovenia by almost 9% and in Poland by about 18%.

The largest share in Lek’s total sales is accounted for by prescription drugs for the use in human medicine, namely 88.6% (of which 69.3% is accounted for by pharmaceutical products, and 12.2% by active pharmaceutical ingredients), followed by self-medication products (OTC) to the amount of 7.1%, animal health products with 4.6% (with the highest sales growth), cosmetics with 4.3% and medical devices with 2.5%.

For the present year Lek is planning sales to the amount of SIT52 billion which represents a 12% growth as compared to the last year. In 2000 Lek’s major business challenges will be: sales growth in 5 key markets (Slovenia, Poland, Croatia, Russia, USA), starting sales of Amoksiklav in the EU markets, coming back to the US market with some finished products, and successful operation of the new joint venture Sanofi-Synthelabo – Lek d.o.o. in the domestic market and in the market of former Yugoslavia.

In 2000 Lek will reinforce its presence in the Chinese market, where it obtained the registration for the product Tamicin (cephalosporin antibiotic used in treatment of severe infections), while in the markets where Lek has its associated companies, it is planning to increase its market shares.

Lek will try to achieve its strategic objective of building a leading position in the key markets through acquisitions of other pharmaceutical companies. In Poland Lek has therefore joined the process of privatization of the Polish pharmaceutical company Polfa Tarchomin. .Lek has submitted to the Polish Department of the Treasury a binding offer for the acquisition of a majority ownership share in this pharmaceutical company. .The offer has been formed in accordance with Lek’s strategic objectives and it envisages a high level of re-structuring of Polfa-Tarchomin. In its offer Lek has assumed a role of a strategic investor and not that of a financial investor.

On 12 January 2000, the Polish Department of the Treasury issued a notification saying that it had granted the exclusive right to negotiation on the acquisition to another offerer, yet it pointed out that this does not imply that the co-operation with Lek in this project is over. After the expiration of the exclusive negotiation position, the Department of the Treasury will announce its decision about further course of events in the privatization process of this company.