Due to the rigid demand, the pharmaceutical industry has become a relatively limited sector in the current financial turmoil. From the perspective of the quarterly reports of most domestic and foreign pharmaceutical companies, there has been no significant decline in earnings due to the financial crisis. However, analysts said that the pharmaceutical industry may be lagging behind due to the financial crisis.
Europe and the United States pharmaceutical market growth rate decline
Pfizer’s quarterly report recently revealed that the company’s net profit in the third quarter increased by three times, exceeding market expectations. However, Pfizer lowered its profit forecast for 2008.
Despite the strong demand, the growth rate of the foreign pharmaceutical market has begun to decline. According to relevant data, the growth rate of the pharmaceutical market in the western mainstream countries has dropped from double digits 10 years ago to 4% to 6%. Some analysts even predict that the pharmaceutical market will enter a recession of negative growth rates around 2011.
In addition, the trend of frequent capital operations such as mergers and acquisitions in the pharmaceutical industry has also cooled. According to statistics on the US health industry investment in the first quarter, the amount of venture capital investment and M&A transactions in the pharmaceutical industry showed a downward trend shortly after the subprime financial crisis started.
At present, pharmaceutical giants have increased their investment in new markets in order to offset the losses in the European and American markets. For example, the Sanofi-Aventis Group's China R&D scale expansion plan was launched, and British pharmaceutical giant GlaxoSmithKline invested US$210 million in the acquisition of the mature Egyptian product business of Bristol-Myers Squibb.
"The chaos in the global stock market may help carry out more acquisitions because its potential acquisition targets are becoming less and less," said Schwerin Shuwang, CEO of Swiss pharmaceutical company Roche Holding.
Domestic pharmaceutical company performance has no effect
At present, the three quarterly reports of domestic pharmaceutical companies are being released one after another. They are still mixed, but none of them shows that performance has been affected by the financial crisis. Ma Yong, an analyst at Bohai Securities Pharmaceuticals, believes that because the public has a rigid demand for the health industry, it has become a safe investment zone in the financial crisis.
The former deputy director of McKinsey China, Zhang Hong, believes that due to the financial crisis, the United States and Europe may adjust their insurance systems based on original research medicines and high-grade medical devices, and turn to generic drugs and middle- and low-grade medical devices. Will bring new business opportunities to domestic pharmaceutical companies.
Depression effect or lag 3 to 6 months
Industry analysts said that in the past when there was a recession, health care expenditures would rise temporarily but then fell sharply.
Donald Fisher, chairman of the American Medical Association Association, also stated that when the economic crisis hits, the real hit in the health care field generally lags 3 to 6 months. Therefore, the pharmaceutical industry, which has not yet been significantly affected in the short term, will show signs later.
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