QUOTE AND NEWS
Benzinga  Jul 28  Comment 
In a report published Monday, Morgan Stanley analyst David R. Lewis reiterated an Equal-Weight rating on Hospira (NYSE: HSP). In the report, Morgan Stanley noted, “Potential acquisition of Danone's medical nutritional business may provide...
MarketWatch  Jul 28  Comment 
The latest proposed inversion transaction makes even France a better corporate destination, writes Steve Goldstein
FiercePharma  Jul 28  Comment 
The string of pharma M&A deals fueled by the lure of cutting taxes continues and Midwest-based Hospira is now said to be about to take the plunge. Its vehicle of choice is the medical nutrition business of France's Danone, which sources say it...
TheStreet.com  Jul 28  Comment 
NEW YORK (TheStreet) -- Shares of Hospira Inc. are up 3.79% to $53.68 on heavy trading volume this morning after it was reported that Danone  is in talks to sell its medical nutrition business to the company, a provider of injectable drugs and...
Forbes  Jul 28  Comment 
Hospira reports its second-quarter earnings on Wednesday, July 30, 2014, and the consensus earnings per share estimate is 56 cents per share.The consensus estimate hasn't changed over the past month, but it's up from three months ago when it was...
Forbes  Jul 28  Comment 
The Financial Times reported on Sunday that French food group Danone is in talks with Hospira of the United States to sell its medical nutrition activities in a $5 billion deal. This follows earlier reports this year that the group had mandated JP...
Wall Street Journal  Jul 28  Comment 
Hospira has emerged as a bidder for Danone's medical-nutrition unit in a deal that could be worth about $5 billion and mark the latest in a flurry of so-called inversion deals.
MarketWatch  Jul 27  Comment 
Hospira Inc. is in talks to buy Danone S.A.'s medical-nutrition unit in a cash-and-stock deal that could be worth nearly $5 billion, the Financial Times reported Sunday, cited unnamed sources familiar with the situation. The move would allow...
Market Intelligence Center  Jul 23  Comment 
After Tuesday’s trading in Hospira Inc (HSP) the algorithms behind MarketIntelligenceCenter.com's Artifical Intelligence Center picked out a trade that offers a 3.26% or 6.68% (for comparison purposes only), while providing 14.18% downside...




 

Hospira (NYSE: HSP) is a global specialty pharmaceutical and medication delivery company that is focused on products that improve the safety and efficacy of patient care in the acute care setting. Hospira is a global leader in manufacturing specialty injectable pharmaceuticals and medication delivery systems that deliver drugs and intravenous fluids. Hospira is also a leading provider of contract manufacturing services to pharmaceutical and biotechnology companies for formulation development and filling and finishing of injectable pharmaceuticals. Hospira's U.S. product line is based on five categories: Specialty Injectable Pharmaceuticals, Medication Delivery Systems, Injectable Pharmaceutical Contract Manufacturing, Sales to Abbott, and Other. Other includes sales to non-hospital customers and sales of critical care products. Specialty Injectable Pharmaceuticals and Medication Delivery Systems generate the majority of Hospira's base revenue. Hospitals, alternate site clinics, home healthcare providers, and long-term care facilities use Hospira's broad portfolio of products. Hospira is benefiting from healthcare legislation in the U.S. which allows pharmaceutical manufacturers to produce generic versions of biotech drugs. However, Hospira is struggling with a large backorder volume and shortages of chemicals from suppliers.

Business Growth

Hospira has benefited from strong U.S. sales of docetaxel and gemcitabine, two major oncolytic pharmaceuticals.[1] Hospira has also recently decreased its backorder volume and increased manufacturing efficiency from the Project Fuel optimization initiatives. However, a joint-venture arrangement related to the production of docetaxel and higher research and development expenses associated with new product development programs have weighed on the company's earnings.

Trends and Forces

Generic biotech drugs benefit from new U.S. healthcare legislation

The Affordable Care Act, signed into law in 2010, authorizes the Food and Drug Administration to approve "biosimilar" forms of brand-name biotech drugs. Biosimilars have been unavailable in the U.S. because they were not part of the 1984 landmark Hatch-Waxman law, which allowed for cheaper generic drugs from chemically derived products.[2]

Biotech drugs are some of the most expensive medications. The new health law requires extensive clinical trials before biosimilar drugs are approved. In Europe, patients enjoy savings of 20-30% on biosimilar drugs over the brand-name alternative.[2] Hospira sells Retacrit, a biogeneric version of Epogen, in Europe to patients with renal dysfunction who have anemia. Hospira has begun a clinical trial of its biosimilar version of Epogen in 20 U.S. hemodialysis centers. Hospira will benefit from the new biosimilar market opportunity in the U.S.

Backorders on drugs can harm Hospira's business

Some cancer drugs have been in short supply in recent months. Hospira is one of two major suppliers in Canada of a drug that is made abroad and is in short supply. The one that appears to have the most sensitivity is carboplatin, used mainly when solid tumours have been diagnosed.[3] Reasons for the shortage include shortages of the active pharmaceutical ingredient and operational issues in some plants. When Hospira is unable to fill its orders of certain cancer drugs, hospitals turn to other pharmaceutical companies.

Competition

The use of generic pharmaceuticals is subject to variations in the structure of health care systems and government policies regarding the use of generic products and pricing, which all lead to differing levels of customer acceptance. There are different policies and levels of generic penetration in each country, causing the competition for generic pharmaceuticals to differ widely.

References

  1. Hospira Investor Relations: "Maintains sales and adjusted earnings projections for 2011"
  2. 2.0 2.1 Los Angeles Times: "Generic biotech drugs part of healthcare overhaul law" May 7, 2011
  3. The Canadian Press: "Low supply of some cancer drugs is a concern for hospital pharmacies" May 14, 2011



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