Big Pharma Outlook Still Bearish After Mixed Earnings
pharmaceutical companies are facing some major profit downers in 2011, as the industry deals with regulatory reform from the health care bill passed last spring, and as major pharmaceutical companies face patent expirations that will send multi-billion-dollar drugs to generics this year.
Bristol-Myers Squibb and Novartis both missed with earnings, but Bristol by a much narrower margin, preventing its stock from sliding into the red. It gained 1.6% in trading Thursday to $26.34. Bristol said sales of its Plavix drug, a blood-thinner, increased 6% in the fourth quarter.
Swiss healthcare manufacturer and drug company Novartis reported a 6% decline in net profit, due to one-time gains in 2010 including sales of the H1N1 vaccine, and restructuring costs, of $1.14 per share. Operating income decreased 6%. Analysts expected $1.25. Novaris shares were down 2.7% Thursday at $56.39.
Novartis mentioned 16 major submissions in its pharmaceutical pipeline in 2010, along with its merger with eye-care company Alcon, which is expected to close in the first quarter of 2011. The company said Alcon sales were $1.8 billion for the fourth quarter, offset slightly by currency exchange losses. Revenue from drug sales should grow in 2011, particularly in emerging markets, where sales contributed a 12% sales boost in 2010. Reported sales will be lower than 2010, however, due to healthcare reform and patent expirations.
Eli Lilly reported a net profit of $1.17 billion for its fourth quarter, or $1.05 per share. Excluding special items like restructuring costs, earnings were $1.11 per share, beating the analyst consensus by a penny. Lilly lists its antipsychotic drug Zyprexa among those that will lose their patents this year.
Lilly said healthcare reforms and patent losses may account for $400-$500 in 2011 sales, and to increase operating expenses by as much as $200 million. Shares in Eli Lilly were up 1.4% Thursday at $35.46.
Procter & Gamble also topped Wall Street’s expectations for its fourth quarter earnings with profits of $1.11 per share, up 10% from last year. The company, which sells a mix of healthcare, beauty and household products, says its market share has grown over the last year, thanks in part to product successes in emerging markets.
Volumes grew 6% globally during the fourth quarter. The company also cited higher commodity costs, however, when it set its fiscal year guidance for 2011 to include 3-5% net sales growth and earnings per share between $3.89 and $3.99, in line with analyst expectations.
P&G shares were down 4.3% Thursday, trading at $63.24.
Germany heeds call to block lethal injection drug supply
The German pharmaceutical industry has agreed to a request by the country’s Health Minister to block exports of the anaesthetic drug sodium thiopental to the US, where the drug is used to execute criminals.
Amid reports of impending shortages of sodium thiopental for use in lethal injections, Hospira, the only producer of sodium thiopental in the US, announced on 21 January it would no longer manufacture the product. Shortly after the news, German health minister Philipp Rösler issued an appeal to German firms not to supply sodium thiopental either directly to US prisons or indirectly through other distributors for use in executions. The German Medical Association subsequently issued a strong statement in support of Rösler’s call.
Sodium thiopental can be used in hospitals as an anaesthetic, but when used in executions is usually injected before two other drugs, which halt breathing and stop the heart. But in some US states sodium thiopental is used alone in high dosages for executions.
Susan Knoll, of Germany’s Association of Research-Based Pharmaceutical Companies (VFA), tells Chemistry World that no member of the organisation supplies such drugs to the US for use in executions, nor will they in future. ‘For members of the VFA, this is an ethical duty,’ she says.
Wolfram Koch, executive director of the German Chemical Society (GDCh), says the society fully supports Rösler’s recommendation. ‘The GDCh position is very clear,’ he says. ‘According to our code of conduct, in which the GDCh and its members commit themselves against the misuse of chemistry, using chemicals to end people’s lives, be it criminals or not, is certainly a misuse and unethical.’ He adds: ‘For us, this is not a question of freedom of trade, but of ethical behaviour.’
Koch says he does not expect any negative consequences for the German chemical or pharmaceutical industries.
Hospira had intended to switch production from North Carolina to Italy, but dropped the plans because it could not guarantee that sodium thiopental produced in Italy would not be used in executions. In a statement, the company said it ‘has never condoned’ the use of sodium thiopental in executions, adding: ‘We regret … that our many hospital customers who use the drug for its well-established medical benefits will not be able to obtain the product from Hospira.’
The UK in November put sodium thiopental under export controls, but in recent months there has been extensive media coverage of a small pharmaceutical company in London that has been supplying the US with the product for use in lethal injections.
Tibotec Signs Multiple Agreements With Generic Manufacturers to Provide Access to New HIV Treatment
CORK, Ireland, Jan. 27, 2011 /PRNewswire/ — Tibotec Pharmaceuticals today announced that it has granted multiple non-exclusive licenses to generic manufacturers including Hetero Drugs Limited, Matrix Laboratories Limited (a Mylan company) of India and Aspen Pharmacare of South Africa to manufacture, market and distribute the investigational non-nucleoside reverse transcriptase inhibitor rilpivirine hydrochloride (TMC278), pending its approval for use with other antiretroviral agents in the treatment of treatment-naive HIV-1 infected adults. The generic pharmaceutical manufacturers in India will have rights to market the product in sub-Saharan Africa (SSA), Least Developed Countries (LDCs) and India. Aspen will have rights to market the product in SSA including South Africa. Under the agreement, the generic manufacturers will be entitled to manufacture once-daily 25 mg TMC278 as a single agent medicine and a fixed-dose combination (FDC) product. Fixed-dose combinations contain multiple medicines formulated into one tablet helping to simplify HIV therapy and are preferred by public health treatment programs. Tibotec has chosen to collaborate with multiple manufacturers in order to ensure the widespread and sustainable access to, and supply of, TMC278 in areas of high HIV burden and to support generic competition.
Tibotec specializes in the research and development of new medicines for infectious diseases including HIV. It plays a key role in the Johnson & Johnson Global Access & Partnerships Program, which is committed to improving and saving lives by addressing unmet medical needs and ensuring the availability of HIV medicines to patients in need. The Program is already working, through existing agreements with generic manufacturers Aspen of South Africa and Emcure Pharmaceuticals Ltd of India to broaden access to the medicines darunavir and etravirine in SSA and LDCs and to darunavir in India.
“We believe that voluntary licensing is an important mechanism by which to expand access to our HIV portfolio, including our newest medicines,” said Will Stephens, Vice President of Global Access & Partnerships for Janssen Global Services, LLC. “Multiple licenses in place for TMC278 with generic manufacturers made before final regulatory approval in the U.S. and Europe underscore the seriousness and speed with which we’re working to ensure that all patients in need, not just those in Western markets, will have timely access to the most current regimens.”
Tibotec will provide the generic manufacturers with the technical information and knowledge to allow them to manufacture the single agent product. The generic manufacturers will pay royalties ranging from two to five percent. The generic manufacturers will be responsible for timely regulatory filing for generic TMC278 and for seeking pre-qualification from the World Health Organization (WHO) and ANDA approvals. To keep medicines affordable, the generic manufacturers are required to limit their gross profit margin on the sale of TMC278. Prior to the signing of these agreements, Tibotec submitted TMC278 for regulatory approval in the U.S., Europe, Canada, Switzerland, Australia, Russia and South Korea. Upon approval, it is expected that TMC278, in combination with other antiretroviral medicinal products, will be indicated for the treatment of HIV-1 infection in treatment-naïve adult patients.
The agreements cover the manufacture of TMC278 as a single agent medicine and a license to develop an FDC product using TMC278 with 300 mg tenofovir disoproxil fumarate and 300 mg lamivudine.
In July 2009, Tibotec announced that it had entered into a license and collaboration agreement with Gilead Sciences, Inc. for the development and commercialization of a new, once-daily, fixed-dose antiretroviral product containing Tibotec’s investigational non-nucleoside reverse transcriptase inhibitor (NNRTI) TMC278 (rilpivirine hydrochloride) and Gilead’s Truvada® (emtricitabine and tenofovir disoproxil fumarate). Tibotec and Gilead are committed to working together to make the fixed-dose combination of TMC278 and Truvada available in the developing world and are working towards a separate agreement for these countries.
Tibotec Pharmaceuticals, based in Cork, Ireland, is a pharmaceutical research and development company and one of the companies that compose the Janssen Pharmaceutical Companies of Johnson & Johnson. Tibotec is dedicated to the discovery and development of innovative HIV/AIDS drugs and anti-infectives for diseases of high unmet medical need. The Company’s main research and development facilities are in Beerse, Belgium with offices in Titusville, NJ.
Tibotec has developed a Global Access & Partnerships Program to facilitate access to its antiretrovirals for patients living with HIV/AIDS in developing countries. The Global Access & Partnerships Program for darunavir and etravirine includes access pricing, registration, medical education for appropriate use and voluntary licensing.