Risk factors

Sopharma Group faces various types of risks connected to regulations, political situations, international developments and industry dynamics.

How we face risks

Regulatory risks

• The Group is dependent on regulatory approvals.
• Government regulations affecting the Group's business may change, thus possibly increasing compliance costs or otherwise affecting its operations.
• Part of the Group’s revenue, in particular in Bulgaria, depends on the inclusion of the Company’s medicines on reimbursement lists.
• The production facilities and processes of the Company and the Group companies are subject to strict requirements and regulatory approvals that may delay or disrupt the Group’s operations.

Country risks

• The macroeconomic and political environment in Bulgaria and in the Group’s export markets, particularly in Bulgaria, Russia, Belarus and Ukraine, have a significant effect on the Group’s operations and position.
• The development of the Bulgarian legal system and of the legislation of some of the countries in which the Sopharma sells its products, in particular Russia, Belarus and Ukraine, could adversely affect the Group's operations.

Business and industry risks

• The Group faces significant competition.
• Part of Sopharma Trading’s revenue in Bulgaria is generated by sales to hospitals, which involve a higher degree of business risk

Financial risks

• The Group companies perform their operations with active exchange with foreign suppliers and clients and, therefore, they are exposed to currency risk.
• Sopharma Group has developed policy and procedures to assess, mitigate and monitor all financial risks such ad credit risks, liquidity risks and risks of interest-bearing cash flows.