Italy just the job for ProStrakan growth

Published on Saturday 22 August 2009 19:00

PROSTRAKAN, the fast-growing Borders pharmaceutical company, is establishing an office in Italy, the largest European market in which it does not yet have its own sales force.

The London-listed group, which last week reported a 40% rise in first-half sales, has appointed an Italian general manager and is recruiting 10 sales representatives for an office in Milan. ProStrakan has its own dedicated sales force in the UK, the United States and five continental European countries, but has until recently operated a joint venture in Italy with Keryos, a privately-owned group focused on selling chemicals but which also had a pharmaceutical business.

The owner of Keryos recently decided to pull out of the pharma market, after drugs it sold for AstraZeneca in a licensing deal came off-patent, hitting sales.

After considering buying the business from Keryos or forming a new joint venture, ProStrakan decided to go it alone.

Commercial director Abid Karim said Italy was an obvious target for expansion, as the fourth largest market in Europe behind Germany, the UK and France.

"It would be a shame to allow somebody else to take most of the profit when we have the competence to promote these products ourselves," he said.

The Italian sales force is set to begin work next month, promoting Tostran, a testosterone replacement gel, followed by Xomolix, a drug to prevent post-operative sickness.

ProStrakan plans to launch Abstral, a pill to counter acute pain in some cancer patients, in Italy in the first half of 2010.

Chief executive Wilson Totten said it would consider launching in other countries but not in the short term.

Galashiels-headquartered ProStrakan is focusing on a series of key product launches over the next three years and Totten said the group would also be seeking to acquire the "next generation" of drugs for its pipeline. It is looking to buy the rights to niche drugs which are at an advanced stage in their development and have strong sales potential late in the development phase. "The next steps are more products than geographies," Totten said.

Outside its key markets of the US and western Europe, ProStrakan has focused on securing out-licensing deals for third parties to sell on treatments.

The deals earned the group 2.6 million in revenues in the first half of 2009, a figure which will continue as sales rise and new products are launched.

The group last week launched an agreement with Bayer Schering, which extends the territories where the company can sell Tostran to 147 countries, up from 65 under the initial agreement.

Totten said ProStrakan was focusing on licensing the drugs to companies which have local knowledge of the approval process, and that all returns fed almost directly into earnings.

"As we grow, the advantage of licensing income is that it's just cash, just profit, we don't have to do anything to generate it."