ICN Polfa Rzeszow becomes exclusive Valeant representative in Europe after global restructuring. An interview with Mariusz Gajowniczek, CEO of ICN Polfa Rzeszow

2010-02-24

After a three-year restructuring process, ICN Polfa Rzeszow, the Polish subsidiary of the US corporation Valeant Pharmaceuticals, has strengthened its position within the global organisation and become the exclusive representative of Valeant in Europe. In addition to the development of sales and production in Poland, the firm has also acquired Valeant subsidiaries in the Central European region and recently started operations in Romania and Bulgaria. In an interview with Pharma Poland News, Mariusz Gajowniczek, the company’s CEO, divulges the details of the company’s latest developments and future ventures.

Anna Skoczylas-Ligocka Pharma Poland News: Could you describe the latest changes at ICN Polfa Rzeszow after Valeant’s global restructuring process?

Mariusz Gajowniczek: First of all, I have to clarify that, over the last three years, the whole corporation has undergone a process of geographical restructuring, during which five separate subsidiaries have been established: the US, Canada, South America, including Mexico, Europe and Australia. As a result of this process, ICN Polfa Rzeszow has become the exclusive Valeant representative for the whole of Europe and has its headquarters in Warsaw. The company now has Valeant subsidiaries in the Czech Republic, Slovakia and Hungary and is currently their exclusive owner. Later developments involved the acquisition of Emo-Farm, a Polish manufacturer of dermocosmetics as well as medical and medicinal products in gel forms, in April 2009, and the launch of new subsidiaries in Romania and Bulgaria at the beginning of 2010.

ASL: So we can say that the Polish representative’s position in the global organisation has been significantly strengthened. Why did the corporation decide to choose Poland as its European Centre?

MG: ICN Polfa Rzeszow has not only been the largest European subsidiary of Valeant but has also had the best management team. I think that this was a natural choice of sorts.

ASL: Has the global restructuring changed the manufacturing operations of ICN Polfa Rzeszow?

MG: Since the acquisition of Emo-Farm in 2009, our production involves two manufacturing locations: Rzeszow and Ksawerow near Lodz, where Emo-Farm’s production is based. The vast majority of our production takes place at the Rzeszow plant, which manufactures drugs for Valeant subsidiaries all over Europe and also to the third party companies in several countries of the world, including those in the UK, Ireland, Germany, Belgium, Austria, but also Australia and Middle East. We are now in the last stages of preparation for deliveries to Japan and Brazil. At present we produce approximately 60 million packets per year.

ASL: For 2009 the company forecast a 10% increase in sales revenues...

MG: And we have overachieved this goal. Including Emo-Farm revenues, ICN Polfa Rzeszow in Poland recorded solid year-on-year growth of 22 % in 2009 to $123m (15% without Emo-Farm), whereas in Europe we earned annual sales revenues of $157m, which was 17% more than a year before.

ASL: There have been some comments about the debut of Valeant on the Warsaw Stock Exchange...

MG: Two years ago there were such plans taken into consideration, but finally they have been abandoned.


ASL: We know that ICN Polfa Rzeszow was trying to acquire Ozone of Romania...

MG: Yes, in 2009 we were trying to acquire Ozone, a Romanian manufacturer of branded Rx generic and OTC drugs, as we thought that having a domestic partner was a convenient way of entering the market. However, we finally abandoned this because of Ozone’s too complicated organizational and ownership structure. We decided to open a new subsidiary and now we are in the process of starting operations in Romania with a new firm, Valeant Romania. In Romania and Bulgaria we have already obtained marketing authorisation for 25 products, mainly Rx drugs, and started to recruit. Bulgarian business, for the moment, is planned to be a branch of Romanian’s one.

ASL: What about further expansion?

MG: We are eager to strengthen our position in the CEE region, and indeed, all over Europe, as soon as possible. At the moment we are examining the foreign markets for potential acquisitions, but no decisions have yet been taken.
We also have certain plans for the development of our portfolio, including the launch of several products in a new therapeutic areas and the expansion of the group of oncological products.


ASL: We have leaned that the company also bought the rights to several prescription drugs and dermocosmetic products from a privately-owned Polish pharmaceutical firm...

MG: We already have a portfolio of dermocosmetics after acquiring Emo-Farm, in addition to two other brands, Daylong and Excipial, produced by the Swiss manufacturer Spirig.. We are also examining the dermatological portfolios of two other companies acquired by our corporation in the States and Australia. With regard to the deal with the Polish manufacturer, this is a work in progress, and no details can be disclosed until it has been formally concluded.

ASL: Finally, how would you evaluate the effects of the restructuring of Valeant?

MG: The aim of the three-year restructuring process was to improve the corporation’s performance and discard those parts which did not fit its future structure. I am confident that we succeeded in this, and that the success can be clearly measured in the tripling of the value of Valeant’s shares over the last three years to $37 per share.