Hungarian Firms To Privatize By Year-End

The Hungarian drug industry is waiting for a fresh wind to blow in some definite direction in 1996 as privatization moves forward. The government has made clear that it will offer 20% of the capital of Richter Gedeon, one of the three main pharmaceutical firms, before the end of 1995 and expects to find a major strategic investor for Egis by the end of the year.

The European Bank for Reconstruction and Development has a 30% stake in Egis, while the UK banking group NatWest Markets has a 28% share. Sources close to current negotiations told the Marketletter that talks are underway with a number of French, German and American drug companies, and there were prospects of a conclusion before December 31, 1995.

The classical position of Hungarian drug companies as prewar discoverers of major drugs and Cold War suppliers of 25% of the former Soviet Union's drug requirements have changed radically. The future pattern is being established by Chinoin. Founded in 1910, Sanofi of France acquired 40% of the firm in 1991 and has increased this stake to 51%. Chinoin's president, Milos Gyoergy, says that when Sanofi arrived, the research teams hoped to get considerable resources and to take part in international conferences.