Please login to the form below

Not currently logged in
Email:
Password:

Swings and roundabouts

With a slowdown in UK consumption, it is unsurprising that interest rates have remained static. The UK is re-discovering thriftiness and as a result a rise in savings has been forecast.

With a slowdown in UK consumption, it is unsurprising that interest rates have remained static. The UK population is re-discovering thriftiness and as a result Morgan Stanley has forecast a rise in savings from just under 6 per cent of household income to 8 per cent by 2010.  

There are other reasons why consumers are tightening their belts; historically, unemployment has risen along with saving rates, manufacturing activity fell rather unexpectedly in March and David Blunkett is back in the cabinet overseeing work and pensions, refusing to rule out compulsory savings to fund the well-documented shortfall in retirement provision.

While UK consumers come to terms with increased debts and ailing property prices, the pharmaceutical and healthcare sectors have had their fair share of ups and downs, AstraZeneca, Takeda and Eisai among them. 

AstraZeneca shares dipped 1 per cent to £23.49 on news that the Anglo-Swedish firm had lost a contract, with an estimated value of £37m a year, to supply the US military with its ulcer treatment, Nexium. The US Department of Defense has said that it wants to buy cheaper generic versions of the drug to treat 140,000 soldiers and ex-servicemen in its care.

While Nexium is worth £2.1bn a year and the company's biggest selling drug, many critics claim it is no better than its now off-patent predecessor Losec (Prilosec in the US).

To add to its woes, drug buyers looking to reclaim profits made on Nexium are suing AstraZeneca in the US.

Proceed with caution
Investors reacted cautiously to news that Ray Gilmartin voluntarily stepped down as chairman and CEO of Merck & Co, but believe the appointment of Richard Clark is a safe inside choice: one that is unlikely to signal a radical shake-up of the company.

Clark's appointment as CEO and the decision to replace the position of chairman of the board - for between one and two years - with an executive committee of three directors: Lawrence Bossidy, William Bowen and Samuel Their, highlights the urgency with which Merck wants to deal with its current problems.

Merck has seen its earning stagnate over the last four years, a number of its top-selling drugs are nearing patent expiry and lawsuits over Vioxx just keep coming.

With the departure of chairman Baron Daniel Janssen next year, Belgian company Solvay has also unveiled changes to its senior management team. Christian Jourquin, who has been with the company for 34 years, will become the new chief executive while Alos Michielsen will take over as chairman from May 2006.

Cash in hand
Shares in Biocompatibles got a boost yesterday after receiving £17.6m from Abbott Laboratories following a court settlement. The sum, set a side by Biocompatibles on the sale of its cardiovascular unit to Abbott, was released following the final settlement of a patent dispute between the medical devices manufacturer and Isostent in the US.

The company said it plans to transfer the money from debt to cash on its balance sheet.

Slow growth
Analysts are predicting tough times ahead for top pharma companies in Japan, which are unlikely to improve on results from 2004 as major products mature and development costs eat into profits.

According to analysts, Takeda and Eisai are likely to experience only single-digit earnings growth in the year to March 2006 thanks to increased R&D costs and international pricing pressures.

The patent expiry on Mevalotin, Sankyo's flagship cholesterol drug, is expected to dent profits over the next 12 months, although some analysts are predicting increased growth longer term.

Astellas, the product of the merger between Yamanouchi and Fujisawa, is forecast to see an increase in profits thanks to cost-savings resulting from the deal.

With prescription drug market predicted to grow 5 per cent in 2005/06, Astellas is tipped to take the lead with Sankyo set to become the fastest growing company, given its pipeline in five years' time.

2nd September 2008

Share

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Hayward Medical Communications

Hayward Medical Communications has been supporting partners in every sector of the healthcare industry to deliver evidence-based, clinically relevant and...

Latest intelligence

blood
‘How is your day?’
The initiative that shows how plasma protein therapies improve lives...
women
Advancing women in healthcare
Fostering the next generation of leaders...
The Challenges Of UX In Healthcare: Technology To Change Lives
Blue Latitude Health Director and Head of Customer Experience Elisa Del Galdo explores the latest digital healthcare trends and reveals the innovations changing the sector today....

Infographics