Almirall 2011 outlook poorer than expected
This article was originally published in Scrip
Pricing pressures and austerity measures took their toll on the Spanish pharmaceutical company Almirall and its 2010 net sales and income, as expected in the firm's previous guidance. However, Almirall's outlook for 2011 is below analysts' predictions.
The firm's 2010 normalised net income dropped by 5.9% down to €136.7 million while net sales for 2010 totalled €882.4 million, down by 4.7% compared with 2009. The firm said this was because of healthcare reform in Spain, which brought in obligatory price cuts.
This meant that sales generated in Spain, the country's largest market, fell by 7.6% to €495.3 million. However, a strong performance from key brands including Parapres (candesartan + hydrochlorothiazide) and the ramping up of new products Efficib (sitagliptine plus metformine) and Tesavel (Sitagliptine) helped offset generic competition affecting other key brands, including Prevencor (atorvastatin).
Nevertheless, international sales were up, driven by growth in Mexico, the UK, Germany and France. International business in Europe and the Middle East grew by 1.6% to €288.7 million and sales in America, Africa and Asia Pacific grew by 1.2% to reach €70.5 million.
Meanwhile, expenditure on R&D was up by 19.8% to reach €144 million, which the firm said was driven by development of aclidinium bromide and LAS100977, a long acting beta agonist inhaled bronchodilator for treating asthma and COPD, which is in phase II.
The firm's SG&A expenses for 2010 were down by 6% thanks to "cost discipline and productivity gains" as well as operational efficiencies, including streamlined back-office structure.
2011 worse than expected
Almirall says its 2011 corporate development priorities will centre on partnering its key pipeline products, aclidinium bromide and LAS100977, going after new in-licensing opportunities and continuing to evaluate certain acquisitions.
The firm is forecasting a high single digit decline in net sales due to the 2010 pricing pressures, which is somewhat higher than the 4.6% decline expected by Jefferies. Although Almirall says it will be focusing on costs, it expects high single digit growth in R&D spending as it invests in its late stage pipeline to create sustainable shareholder value. Both factors will lead to a mid-teen digit target for decline in normalised net income.
Almirall expects to file its aclidinium bromide monotherapy for chronic obstructive pulmonary disease in both the US and EU this year and hopes to take its combination therapy, aclidinium bromide plus formoterol in to Phase III trials this year.