NN&I - June 2010

Business 18 Nephrology News & Issues June 2010Subscribe to our free eNewsletter at www.nephronline.com PROD/SERVICES 4/12/10 5/12/10 Change% ChangeAngioDynam (ANGO)$15.66 $15.95 $0.29 1.85%BaxterIntnl (BAX)$58.15 $44.88 -$13.27 -22.82%CantelMedical (CMN)$19.71 $20.48 $0.77 3.91%Covidien (COV)$50.78 $46.41 -$4.37 -8.61%C.R. Bard (BCR)$85.08 $84.23 -$0.85 -1.00%DaVita (DVA)$65.67 $63.70 -$1.97 -3.00%DialysisCorp (DCAI)$6.41 $11.20 $4.79 74.73%Fresenius (FMS)$56.11 $49.50 -$6.61 -11.78%MannKind (MNKD)$6.95 $6.80 -$0.15 -2.16%Medtronic (MDT)$45.43 $43.30 -$2.13 -4.69%MesaLabs (MLAB)$26.25 $23.95 -$2.30 -8.76%Nephros (NEPH)$0.96 $0.74 -$0.22 -22.92%NxStageMed (NXTM)$11.97 $13.89 $1.92 16.04%RockwellMed (RMTI)$5.65 $5.80 $0.15 2.65%SpireCorp(SPIR)$3.95 $3.82 -0.13 -3.29%PHARMAAbbottLabs (ABT)$52.67 $49.15 -$3.52 -6.68%Affymax (AFFY)$22.70 $24.84 $2.14 9.43%AMAGPharma (AMAG)$34.93 $33.90 -$1.03 -2.95%Amgen (AMGN)$60.37 $56.60 -$3.77 -6.24%AmylinPharma (AMLN)$23.29 $18.15 -$5.14 -22.07%Exelixis (EXEL)$6.31 $6.27 -$0.04 -0.63%GenzymeCorp (GENZ)$52.84 $51.96 -$0.88 -1.67%Hospira (HSP)$56.11 $53.36 -$2.75 -4.90%ImpaxLabs (IPXL)$17.17 $20.13 $2.96 17.24%Roche (RHHBY)$40.92 $37.41 -$3.51 -8.58%Sanofi-Aventis (SNY)$37.49 $32.94 -$4.55 -12.14%Shire (SHPGY)$66.70 $66.22 -$0.48 -0.72%TevaPharma (TEVA)$63.17 $58.67 -$4.50 -7.12%WatsonPharma (WPI)$42.34 $43.38 $1.04 2.46% Taking StockForecast: Global drug sales to top $1 trillion by 2014Worldwide pharmaceutical sales are expected to reach $1.1 trillion in 2014 as growth in emerging markets helps offset the impact of generic competition for many of the world's top selling drugs, according to a forecast released April 20 by IMS Health, a leading provider of drug prescrip-tion data. The 5% to 8% compound annual growth rate for pre-scription drugs expected over the next five years translates into sales growth of nearly $300 billion, IMS said. Worldwide pharmaceutical sales growth of 4% to 6% is expected this year, which is in line with the previous forecast by IMS. But that represents a decline from the 7% growth to $837 billion seen in 2009.Products with sales of more than $142 billion are ex-pected to face generic competition in major markets over the next five years, reducing prescription drug spending by $80 billion to $100 billion through 2014.Patent expirations in the United States will peak in 2011 and 2012, when six of the 10 current largest-selling products are expected to face generic competition. Branded drugs quickly lose around 90% of sales when faced with com-petition from much cheaper generic versions, IMS said. Somewhat offsetting the pinch from generic competition will be the double-digit sales growth expected in emerging markets, like China and Brazil, which are expected to grow at a 14% to 17% pace through 2014, compared with a 3% to 6% growth rate seen for developed markets, IMS said. Eli Lilly says health care reform caused Q1 revenue to dropEli Lilly and Co. in April became the first large drugmaker to report its quarter report in the wake of U.S. health care reform. And they said that their 5% first-quarter net-income drop was caused directly by the passage of the Patient Protection and Affordable Care Act. Eli Lilly said health reform will cause its business to "incur substantial costs," thus causing the company to lower its 2010 financial forecast. Lilly said it will lower earnings by approximately $.35 per share in 2010, thanks to a one-time tax charge of $85.1 million in the first quar -ter. Higher governmental rebates are expected to reduce revenue by $350 million to $400 million this year. Excluding the charges from the U.S. health care reform, earnings came in at $1.18 a share compared with $1.20 in the same quarter of 2009. Revenue rose 9% to $5.49 billion. The company said it estimates that health care reform will cut $600 to $700 million in revenue. Jon LeCroy, senior analyst at Hapoalim Securities USA. Pharmaceuticals, told Forbes April 19 that analysts were not modeling that kind of impact. "Lilly is going to be impacted the most by patents expirations," says LeCroy, noting the company does not have a lot of drugs in their pipeline to offset patent protection loss. "We expect Lilly to have negative earnings growth in the future, while most pharmaceuticals will have flat earnings." Business0610_7.indd 18 5/14/10 2:06:07 PM