Shares in Solvay have taken a bashing as the Belgian drugs, chemical and plastics maker posted a disappointing showing for its pharmaceuticals division in the first half of the year.
The group’s total sales inched up 1% to just over 4.80 billion euros while net income was down 15%, due to a decrease of 51 million euros of non-operating items and higher taxes. The figures were hurt by a 5% decline in pharmaceutical revenues to 1.25 billion euros and operating profit at the unit sank 16% (and down 32% for the second quarter) to 205 million euros.
Solvay said that the fall was due to the weakness of the dollar and “significant pressure on prices in the European pharmaceuticals market, especially in France”. However the biggest factor was due to the expiration of marketing rights to the antiulcerant Pantoloc (pantoprazole), which had brought in 72 million euros in the first five months of 2006.
In terms of its other products, the cardiovascular drug fenofibrate, acquired along with Fournier in 2005, brought in 209 million euros, a fall of 8.7%, and sales were flat of Solvay’s Creon pancreatic enzyme replacement product (96 million euros). However, there was a 13% increase for the firm’s Androgel testosterone replacement therapy to 160 million euros, while sales of the synthetic cannabinoid Marinol (dronabinol), for the treatment of chemotherapy-induced nausea and appetite loss in AIDS patients, rose 14% to 57 million euros. Looking forward, Solvay said the implementation of its pharmaceuticals savings plan is “continuing as planned,” having set itself a goal of 300 million euros in annual cost savings by 2010.
Bifeprunox news due very soon
The company was also enthusiastic about its pipeline and has high hopes for the experimental antipsychotic bifeprunox. Promising Phase III data was published in December and the firm, with partners Lundbeck and Wyeth, is expecting to hear from the US Food and Drug Administration in August. If approved, annual sales should reach $1 billion. ABT335/SLV34814, a next-generation fenofibrate co-developed with Abbott Laboratories, is now in Phase III and a US submission is scheduled for the second half of 2007 and Solvay said it is also developing several combinations of fenofibrate with other molecules.
Solvay’s shares fell some 5.4% to 108.67 euros but the company is upbeat, saying that overall for 2007, “we confirm our confidence that we can achieve the excellent operating results of last year”.