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Pharmacos announce financial results

As volatility continues to sweep through global financial markets, pharma companies are announcing their results for the previous quarter

Amid ongoing financial turmoil, pharma companies from around the globe have begun to announce their financial results for the latest quarter. Overall, these results demonstrate that, though the pharma sector is relatively insulated from market fluctuations, the industry has nevertheless been subject to some of the pressures affecting the wider business world, including bankruptcy, cost cutting and unstable business relationships. Nevertheless, the outlook remains positive.

Canada-based Angiotech Pharmaceuticals reported a net profit of $58.6m; though this represents a decrease from the $61.9m recorded in Q2 2010. The company had announced in January that it would file for bankruptcy. In May, however, Angiotech ceased to be covered by creditor protection proceedings, eliminating the company's $250m 7.75 per cent Senior Subordinated Notes due in 2014, as well as $16m of related interest obligations in exchange for new common shares issued. This is anticipated to increase the company's cash flow in the future.

US company Arena Pharmaceuticals recorded revenues of $3.6m for Q2 2011, up from$2.5m in Q2 2010. However, partially due to ongoing cost-containment measures, R&D expenditure at the company continued to decrease, down to $14.7m in Q2 2011, compared with $20.5m in Q2 2010.

In Asia-Pacific, China Sky One Medical, an OTC company, reported a 7.6 per cent year-on-year decrease in revenue (to $37.7m). However, the company now markets just 101 products, compared with the 114 products marketed in the same period last fiscal year, a consequence of losing two distributor relationships in Q3 2010.

Array BioPharma also reported a greater loss compared with the same period last year: the US company reported a net loss of $21.8m on revenue of $19m for the most recent quarter, compared with a net loss of $15.8m on revenue of $18m for the same quarter in 2010. As part of cost-cutting measures, the company has narrowed its development focus to four clinical programmes, and will make approximately one-fifth of its workforce redundant.

At the other end of the spectrum is Parexel, which has announced Q4 and full-year financial results for 2011. With fourth quarter revenue of $310.5m and full fiscal year revenue reaching $1212.1m, the company has experienced record revenue this year. Consolidated service revenue for Q4 2011 increased 5.2 per cent to $310.5m compared with the same period in the previous fiscal year – fuelled by strong new business growth – although operating income decreased by 62.8 per cent year-on-year. On the basis of these results, the company has increased its forward-looking financial guidance.

Separately, Enobia Pharma, a Canadian biotech, has raised $40m through the placement of 13.7m new shares of common stock. The company was also recently awarded a $1.2m Food and Drug Administration (FDA) Orphan Grant. The funds will be used to support the company's research into hypophosphatasia, a rare and potentially life-threatening genetic bone disorder.

(All amounts, unless otherwise specified, are given in US dollars.)

10th August 2011

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