Richter Jumps as FDA Approves Expanded Use of Blockbuster Drug

(Bloomberg) -- Gedeon Richter Nyrt., eastern Europe’s largest drugmaker, rallied the most since July after the U.S. approved the expanded use of its blockbuster anti-psychotic Vraylar.

Richter and Allergan Plc, which is responsible for marketing in the U.S., received permission to use the drug to treat bipolar depression, a broader condition that affects 11 million people in the country, the companies said in a regulatory statement.

Market Reaction:

• Shares reversed a decline of around 0.5% to trade as much as 6% higher after the announcement, the biggest rally since July; Stock pares this year’s decline to 3.3%, still underperforming the 3.3% gain in the benchmark BUX index

Key Insights:

• Vraylar has been Richter’s main driver of revenue growth after the use of its other blockbuster drug, Esmya, was limited by European authorities due to side effects
• Concorde Securities raises Richter price target to 6,300 forint from 5,800 on the news, offering almost 20% upside compared with spot price
  • Vraylar’s contribution to clean pharma EBIT may grow above 50% this year from almost 40% in 2018, Concorde analyst Attila Vago says by email
• Last year, Richter received 75.9 million euros in royalties related to the drug

Get More:

• Click here to see the statement
• Read a story on Richter’s latest earnings report

To contact the reporter on this story: Marton Eder in Budapest at meder4@bloomberg.net

To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Monica Houston-Waesch

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