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Pharma news in brief

Our weekly round up of news from the pharmaceutical industry.

Share prices plummet on bad news

Irish pharma firm, Elan, saw shares more than halved after another case of a rare brain disease was reported in a third patient taking its multiple sclerosis drug, Tysabri.

Shares in the company have fallen by almost 90 per cent since trouble began with the drug last month. It was pulled from the market following the news that two patients had contracted the condition progressive multifocal leukoencephalopathy, after taking the MS drug.

Biogen, which developed the drug with Elan, has also faced a stock loss of more than 10 per cent and shed more than half its value since the withdrawal. Tysabri was viewed as the main engine of growth for both Biogen and Elan. Sales of the drug were expected to reach between $2bn and $3bn by 2007. Investors now fear the drug may not return to market.

Analysts believe Elan will struggle to make principal repayments of $1.1bn debt due in 2008 and could be forced into financial restructuring.

Pfizer leads the way

Leading pharmaceutical giant and the worlds largest drugmaker, Pfizer, will unveil cost-cutting plans that will interest the rest of the industry, as much as its investors.

A meeting with Wall Street analysts in New York will focus on cost saving plans for several years ahead while also laying the groundwork for new strategies to meet the challenges faced by the industry.

Profits for the company are likely to fall, or at least stall, as patent expiries increase possibly wiping out nearly a third of Pfizer's revenue - approximately $14bn worth of last year's sales.

Generally, the industry is looking to alleviate unprecedented pressures on pricing, safety and regulation, and government intervention. Pfizer's 10-year strategy to face the `cliff' of patent expiries - a problem that has scathed and fractured many companies ­- was its two big acquisitions of Warner-Lambert and Pharmacia.

Restructuring could yield savings of up to $3bn, according to analysts, and could trigger similar moves throughout the industry.

Shire makes a quick recovery

Shire Pharmaceuticals' chief executive, Matthew Emmens, reassured investors that US demand for its bestseller Adderall XR, was still strong.

Just last month, Health Canada pulled the drug from the Canadian market, following a safety data review which revealed 20 cases of sudden death among patients taking the drug. Investors feared the news may affect sales in the US, where Adderall sales are high.

Emmens told delegates at a global healthcare conference that the impact had been minimal. He also highlighted the successful launch of Fosrenol, a treatment for kidney disease, which had achieved a 15 per cent share of new US prescriptions after just 10 weeks on the market. Shire shares climbed 42.5p to 604.5p on the news.

EC blueprint to aid innovation

The European Commission will set out plans on Thursday to double its research budget to €70bn, bringing spending more in line with the US and Japan, in a move to increase growth, competitiveness and innovation.

As part of the transformation of the European Union, into a `knowledge-based economy', the seven-year blueprint for research and development aims to deliver a new range of high-tech innovations. Boosting R&D is central to the EU's lagging efforts to become the world's most competitive economy by 2010. Some of the potential projects the commission is expected to outline include work on diseases such as malaria and tuberculosis, research on the brain and ageing, and creating new `nano' products.

The Commission estimates that the doubling of funds will lead to near 1 per cent increase in economic growth by 2030 and possibly 1m more jobs.

30th September 2008

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