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Orion Pharma taking actions to improve operational efficiency

The market conditions for the domestic operations of Orion Pharma, the core business division of the Finnish Orion Group, are changing essentially in consequence of the introduction of generic substitution in Finland in April. In order to minimise the impacts of the new pharmaceutical legislation on the profitability, a negotiation proposal will be presented today to the personnel representatives of Orion Pharma concerning adjustments and rearrangements in the domestic marketing and sales organisation. An initially estimated need to reduce personnel by around 70 persons will be dealt with in the negotiations. The change of the Finnish pharmaceuticals act will affect the sales of most off-patent prescription drugs. In Orion Pharma these products represent close to EUR 50 million, or a 10% slice of the total 2002 net sales. 
In addition to the above, long-term efforts incorporating all the operations are being taken by Orion Pharma to improve the ability to generate profits and to achieve cost savings. The goal of these actions is to raise the operating profit to the level of 20% of net sales. For 2002, this figure came to 13.7%.  Over the past four years, the operating profit of Orion Pharma has gone downwards annually while considerable investments have been made in the research and development of proprietary new drug innovations and in the building-up of international market coverage. The recently announced decision to discontinue the clinical studies with deramciclane due to insufficient efficacy is also a weighty reason for Orion to reconsider the situation and revisit budgets.
Orion Corporation
Jukka Viinanen                       Risto Miettunen
President and CEO                 Executive Vice President
Contact persons:
Jukka Viinanen, President and CEO, Orion Corporation, phone +358 10 429 3000
Dr. Risto Miettunen, President, Orion Pharma, phone +358 10 429 4299