Business News summary

Cuts in the prices of prescription medicines have been blamed for the poor performance last year of Gehe AG's United Kingdom divisions, AAH Pharmaceuticals and Lloyds Pharmacy...[more]

Terry Norris, managing director of Numark Ltd, will retire in May, 2002...[more]

Boehringer Ingelheim (BI) is looking to three new products to carry the company through to 2005 as the company reported profits rising for the second year in succession...[more]

Two companies spun off from the schools of pharmacy at Bath and Nottingham universities have recently seen further developments of their businesses...[more]

News in brief
The Stock Market, a service by which pharmacists can sell or exchange short-dated or excess stock, has been taken over by Pharmstock. The business will continue to be conducted by fax. A mailing list will be e-mailed to traders.

The value of retail sales for February, 2001, under the classification of pharmaceutical sales, was up six points at 114. The classification of the retail sale of pharmaceutical, medical, cosmetic and toilet goods excludes National Health Service receipts. The figures are based on returns made by a number of large retail pharmacy chains, but exclude Boots the Chemists Ltd, which is classified under non-specialised retail stores. The figures are compiled by the Office for National Statistics.

Bayer AG reported that its pharmaceutical sales for the year to December 31, 2000, rose by 23 per cent to E6.1bn (£3.8bn) as a result of increases in North America and Japan. Ciproxin (ciprofloxacin) was the company's best selling product with sales of E1.8bn.

Shares in SR Pharma Plc fell by 77 per cent on April 11 after the company announced that its anticancer agent SRL172 had not shown any benefit over standard chemotherapy in a phase III trial in non-small cell lung cancer. The shares were worth 72.5p at close of market on April 12, valuing the company at £17.3m. SR Pharma recently reported a pre-tax loss of £2.2m for the year to December 31, 2000, 10 per cent up on the previous year.

Cuts blamed for AAH and Lloyds results

Cuts in the prices of prescription medicines have been blamed for the poor performance last year of Gehe AG's United Kingdom divisions, AAH Pharmaceuticals and Lloyds Pharmacy.

Speaking at a financial results press conference in Stuttgart, Germany, on April 24, Dr Fritz Oesterle, chief executive, Gehe, said that both AAH and Lloyds had been affected by price cuts imposed by the UK government through the Pharmaceutical Price Regulation Scheme and maximum prices for generics. This had been partially offset by the acquisition of further pharmacies in the UK and the strength of sterling against the euro.

Turnover at AAH rose by 11.1 per cent to E2.86bn (£1.78bn), or 3.2 per cent in sterling terms. Pre-tax profits for the AAH group, which includes operations in Ireland, were down 1.5 per cent at E63.9, an 8.3 per cent drop in sterling terms.

Turnover at Lloyds rose by 14.5 per cent to E1.54bn, representing growth of 4.8 per cent on a like-for-like basis. During the year 56 pharmacies were bought, 25 sold or closed and 31 relocated giving a year-end total of 1,320. Dr Oesterle said that many of the pharmacies being offered for sale had failed to meet the company's standards for location or staffing or were simply too expensive.

Mr Michael Ward, director for AAH and retail divisions, Gehe, told The Journal that high interest rates were having an effect on Gehe's UK divisions as they were still carrying around £700m of debt related to the purchases of AAH and Lloyds. He hoped that recent rate cuts would show up in the results for the current year. Around 85 per cent of the sales through Lloyds were either National Health Service prescription items or non-prescription medicines.

Mr Ward said that the UK government needed to address the remuneration system for community pharmacists so as to allow them to provide the quality of services which patients wanted. The government had to realise that if resale price maintenance was removed there would be pharmacy closures. Pharmacy manpower would also continue to be a problem. Lloyds had brought in around 75 pharmacists from South Africa but he wanted to see an expansion of the schools of pharmacy in the UK.

At the end of the year, Gehe had 1,403 pharmacies in the UK, Italy and the Czech Republic. Pre-tax profits for this group were up 19.6 per cent at E37.3m. Since then Gehe has acquired 28 pharmacies and seven new licenses in Norway, 84 pharmacies and two dispensaries in Milan, Italy, and two pharmacies in the Netherlands. Dr Oesterle said he believed that Gehe could avoid the problems which the Boots Co Plc had had in the Netherlands by acquiring existing pharmacies with licenses and using some of the retail skills of the Lloyds chain.

Overall, Gehe reported total group turnover of E15.3bn, up 12.8 per cent, and pre-tax profits of E256m, up 11.1 per cent.

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Numark MD to retire next year

Terry Norris, managing director of Numark Ltd, will retire in May, 2002, the company announced on April 30. Mr Norris will be bowing out after 13 years of running Numark. He will be succeeded as managing director by the current deputy managing director, David Wood, MRPharmS.

In its annual report, Numark declared profits of £6.57m, a 35 per cent increase on 1999. The average rebate per pharmacy for shareholders was £4,698, an increase of 37 per cent. The rebate is now almost eight times the annual management fee. At the year end, 1,394 pharmacies were in Numark membership, 54 more than the previous year, despite many pharmacies being sold during the year.

Mr Norris told The Journal that Numark now had both an intranet for its members and a website for its customers (www.numarkpharmacists.com). Numark intended to use the intranet to send out pricing information and to provide staff training on matters such as smoking cessation. The internet site would not be used to sell medicines but disability aids, medical devices and anti-allergy bedding would be sold for delivery through Numark pharmacies.

Mr Norris said that it was clear that the future of pharmacy lay in embracing information technology. The Government would be driving members of the public, and thus pharmacy contractors, to make more use of IT. The subject would be discussed at Numark's conference in the United States this month.

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Boehringer Ingelheim looks to three new products as profits rise

Boehringer Ingelheim (BI) is looking to three new products to carry the company through to 2005 as the company reported profits rising for the second year in succession.

Speaking at a financial press conference in Ingelheim, Germany, on April 25, BI's chairman, Professor Rolf Krebs, said that the success of the company's recently launched products, particularly in the United States, had pushed sales up by 22 per cent to E6.2bn (£3.8bn). Pre-tax profits were up 27 per cent at E772m. Products launched since 1995 generated 31 per cent of sales. Sales of Atrovent (ipratropium bromide) and Combivent (ipratropium bromide and salbutamol) together reached over E1.1bn.

Professor Krebs noted that BI, like other pharmaceutical companies, was becoming dependent on the US market. Sales in the US (36 per cent of the total) were greater than for the whole of Europe (31 per cent) last year, the reverse of 1999.

Professor Marbod Muff, finance director, BI, said that spending on research and development would rise from around E900m in 2000 to around E1bn next year. Spending on new research and production facilities would remain at E500m a year.

Dr Alessandro Banchi, director of pharmaceutical marketing and sales, BI, told The Journal that the company would be concentrating its marketing efforts on three main products; Micardis, Metalyse and Spiriva. The company needed these products to be successful so that it could enjoy continued growth and profits and remain one of the top 20 global pharmaceutical companies. It is currently 17th in the world.

Micardis (telmisartan) is a once-daily angiotensin II receptor antagonist being co-promoted with GlaxoSmithKline Plc. A new trial of telmisartan alone or in combination with ramipril, an angiotensin converting enzyme inhibitor, is being set up to assess whether telmisartan offers the same protection against cardiovascular events as ACE inhibitors. It plans to enrol 30,000 patients over the next five years.

Metalyse (tenecteplase) is a thrombolytic which can be given as an intravenous bolus injection rather than as an infusion. It will be launched in the United Kingdom this year, having been approved by the European Medicines Evaluation Agency. Dr Banchi said that it might be possible to give the drug to patients with myocardial infarctions before they reached hospital, if local regulations allowed.

BI is setting great store by Spiriva (tiotropium), its replacement for Atrovent in chronic obstructive pulmonary disease. The product is due to be launched next year and will be co-promoted by Pfizer Inc. Dr Banchi said that Spiriva could be given once daily and had been shown to improve lung function and reduce hospital admissions in COPD patients.

Parallel imports were a big problem for BI in the United Kingdom. The recent strength of the pound made importing more attractive financially, but there was little the company could do to limit imports, Dr Banchi said. Sales in the UK rose by 6 per cent to E175m, with rapid uptake of the non-nucleoside reverse transcriptase inhibitor Viramune (nevirapine).

Looking ahead, BI intends to license in more compounds to boost areas such as urology and HIV medicine where it has existing medicines. It has acquired the rights to tipranavir, a new protease inhibitor which is showing good in vitro activity against resistant viruses.

The Journal attended this press conference with assistance from Boehringer Ingelheim.

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Success for university spin-offs

Two companies spun off from the schools of pharmacy at Bath and Nottingham universities have recently seen further developments of their businesses.

Vectura Ltd is based on the campus of the University of Bath. It is developing drug delivery techniques based on research undertaken at the Centre for Drug Formulation Studies, formerly part of the Bath school of pharmacy and pharmacology. The company recently raised £10.55m from a number of private equity and venture capital companies. The university, which is a major shareholder in the company, and Vectura's management invested £1m.

Professor John Staniforth, MRPharmS, has been appointed chief scientific officer at Vectura following the successful fundraising. He was formerly professor of pharmaceutical technology at Bath. He told The Journal that many of the company's 60 research staff were pharmacists. The £10.55m would keep the company going for around three years.

Vectura is working on four drug delivery techniques. PowderHale is aimed at producing a dry powder inhaler with equivalent properties to metered dose inhalers. Accustar is a project to produce a portable device to deliver drugs to the mouth for patients who have problems swallowing conventional tablets and capsules. Emulsys is a project to develop stable emulsion systems for the oral delivery of poorly soluble drugs by interlinking oil and water phases with surfactant materials. Pandermal aims to produce unit-dose transdermal patches based on existing tablet production methods. If successful, they will be licensed to pharmaceutical companies.

Pharmaceutical Profiles Ltd, a spin-off of the school of pharmacy at Nottingham university, recently had its new £2.5m headquarters building at Ruddington Fields, Nottingham, opened by the Science Minister, Lord Sainsbury of Turville.

The new facility is three times the size from the company's old building on the university's campus. It has three clinical imaging suites, a manufacturing facility built to good manufacturing practice standards, research laboratories and offices.

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