Grunenthal sees core business sales grow 9% as EBITA leaps 147%

German family-owned drugmaker Grunenthal reported first-half 2012 revenues of 473 million euros ($597.6 million), a dip of 2.1% on the 483 million euros achieved in the like, year earlier period. However, when adjusted for divested businesses, core business grew by 9% in the current reporting period, the company noted.

Growth was driven by the continued success of Grunenthal's global pain brands, in particular Palexia (tapentadol prolonged release), sales of which were upo19 million euros, and Versatis, a lidocaine patch, which increased 16 million euros in Europe and Australia as well as increased royalty income for tapentadol, which Johnson & Johnson sells on the North American market under the trade name Nucynta (up 10 million euros). The growth of the innovative products more than compensated for the expected revenue decreases for mature and local products. Additionally, development of the business in Brazil and other countries as well as favorable exchange rate developments in the Latin American business also contributed to revenue growth in the first half of 2012, Grunenthal noted.

Significant increase of operational EBITA (earnings before interest, taxes and amortization) clearly shows the effect of the implementation of focusing strategy in 2011. Group operating EBITA rose to 41 million euros, an increase of 147%. Main drivers of this significant profitability increase are accelerated revenue growth of the core business which more than compensated for the loss of profit contribution of the divested businesses. In addition, after several market launches of Palexia (tapentadol, prolonged-release) in 2011, marketing and sales cost decreased in the first half of 2012. Savings in administration cost of about 14% in first half of 2012 further drove profitability.