According to the government decree on extra profit taxes, Richter Gedeon Nyrt. is expected to pay a windfall tax on pharmaceutical production of approximately 28 billion forints in 2022, the company said on the website of the Budapest Stock Exchange on Tuesday.
The statement recalled that the Hungarian government issued a decree on June 4 on new taxes on certain sectors, which was recently extended to the pharmaceutical industry on December 23. The tax is expected to be recognized under other expenses, thereby proportionally reducing the company’s operating profit for 2022 and its free cash flow ratios. Other elements of the 2022 public targets remain unchanged, the company announced in a statement. After the news broke, Richter’s share price plunged.
In any case, the leading Hungarian pharmaceutical actor is unlikely to have much trouble paying the extra tax, and Richter is expected to see even higher revenues in the future.
News has recently come from overseas that the U.S. Food and Drug Administration (FDA) has approved a product called Vraylar (cariprazine) as a treatment for Major Depressive Disorder (MDD). The drug was developed by Richter, and is going to be sold by AbbVie, Richter’s US commercial partner.
According to forecasts, by 2029, Vraylar will achieve sales of $741 million in the MDD market in the US, the five major European markets, Japan, and Canada. If this is indeed the case, Richter could expect at least $120 million in additional royalties from AbbVie.
Featured photo via Facebook/Richter Gedeon Nyrt.