(Source: Business Wire)
According to Fitch Ratings' new Global Pharmaceutical R&D Pipeline, credit quality remains stable for the global pharmaceutical sector while large firms modestly grew revenues in the second quarter despite economic turbulence. Global pharmaceutical net sales quickly reversed the decrease from the first quarter with overall average year-over-year growth of 0.6% in the second quarterly period. Foreign exchange rate fluctuations continue to depress revenue growth of U.S.-based drug developers in a range of 3% to 10%.
The second quarter proved to be busy for the drug agencies as eight new medicines were approved by the U.S. Food & Drug Administration (FDA) and seven were cleared for marketing by the European Medicines Agency (EMEA). Moreover, drug developers covered in the report may receive regulatory clearances for marketing nearly 20 new molecular entities (NMEs) in the U.S. or Europe prior to the end of 2009.
Nearly one-half of the 15 European and U.S. drug marketers covered in the report achieved positive sales growth of their pharmaceutical portfolios for the second quarter. Novartis and Roche topped the list with each reaching double-digit constant current revenue increases. Only two U.S.-based pharmaceutical marketers, Eli Lilly and Bristol Myers Squibb, were able to achieve respectable reported net sales growth in the second quarter in spite of the foreign currency headwind. Bristol-Myers Squibb and Eli Lilly switched positions from the first quarter with Bristol-Myers Squibb achieving leading revenue growth of 4.3%.
At mid-year, a brief look back at the goals set for 2009 for the pharmaceutical developers in the report shows that only two of 15 companies may achieve original regulatory filing targets - AstraZeneca plc and Schering-Plough Corp. Currently, 11 drug candidates may be registered with the FDA or the EMEA prior to year's end.
Continuing the trend from 2008 and into the first quarter of the year, pharmaceutical companies significantly reduced share repurchases in the second quarter. The 15 drug developers in the report collectively bought back a modest $554 million of common shares. Dividends are the current preferable vehicle for shareholder returns as a total of $16.71 billion was distributed in the second quarter, including Pfizer's halved dividend resulting from the pending acquisition of Wyeth, and Roche's and Sanofi-Aventis' dividend payments for the first six months of 2009.
For detailed late-stage R&D pipeline developments, recent commercialization, significant near-term patent expirations, and a second-quarter review of the global pharmaceutical sector, the special report, 'Global Pharmaceutical R&D Pipeline - Second Quarter 2009' is now available on Fitch's web site at www.fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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