Novartis AG (NVS), Europe’s second-largest drugmaker, just released their third-quarter earnings along with an announcement that they plan to cut 2,000 jobs in the U.S. and Switzerland and shift 700 of them to China and India – a plan to save over $200 million annually. This may indicate that biotech firms in these countries are at a significant cost advantage that shouldn’t be forgotten.
Earnings for the Swiss drugmaker were mostly in line with analyst estimates. The company saw third-quarter earnings rise to $3.54 billion ($1.45 share) vs. $3.15 billion a year prior. 19 analysts surveyed by Bloomberg expected $1.44 a share in earnings on average.
According to FierceBiotech, Novartis also reported delays for U.S. approval of a two-drug combination therapy for COPD, which will now require new clinical data for submission. Michael King, analyst at Nomura Code, told Reuters that the developer could be looking at a two-year delay.
Novartis is eager to market new drug programs, as their blockbuster hypertension medicine Diovan is losing patent protection this year in Europe and next year in the U.S. Novartis is also losing patent protection for blockbuster cancer drug Gleevec in 2014.
But the move of 700 jobs to China and India may make you wonder whether firms in these countries are at a significant cost advantage to American and European competitors.
For a look at these firms, we list 4 US-traded firms based out of China (no Indian biotech firms are US-traded).
Do you think these firms are poised to do well?
1. 3SBio Inc. (SSRX, Earnings, Analysts, Financials): Engages in the research, development, manufacture, and distribution of pharmaceutical products in the People's Republic of China. Market cap of $232.60M.
4. Sinovac Biotech Ltd. (SVA, Earnings, Analysts, Financials): Engages in the research, development, manufacture, and commercialization of vaccines against the hepatitis A, hepatitis B, and influenza viruses in the People's Republic of China. Market cap of $80.14M.
(By Alexander Crawford)
Use Kapitall's Tools: Looking for ways to analyze this list?
Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall's tab navigation to browse through the data…
Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- 3SBio Inc. (SSRX, Chart, Download SEC Filings)
- China Biologic Products, Inc. (CBPO, Chart, Download SEC Filings)
- ShangPharma Corporation (SHP, Chart, Download SEC Filings)
- Sinovac Biotech Ltd. (SVA, Chart, Download SEC Filings)
© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.
Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.
Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC.