Healthcare Stocks React to New Biotechnology Medicine Rules in Euro-Zone Countries

Strategic Insights -

Healthcare stocks declined on Thursday, with several companies facing challenges due to new rules governing the copying of biotechnology medicines in Euro-Zone countries. The rules, which took effect immediately, could have a significant impact on companies like Biogen Idec Inc. (BIIB), Johnson & Johnson (JNJ), and Merck & Co. (MRK), which stand to lose patent protections for certain medications by 2015. Meanwhile, Genzyme Corp. (GENZ) is exploring potential deals, including a $18.5 billion offer from Sanofi-Aventis, provided the company's experimental multiple sclerosis drug, Campath, is sufficiently valued.

Key Takeaways:

  • Biogen Idec Inc. (BIIB) is expected to lose patent protections by 2015 for its multiple sclerosis and rheumatoid arthritis medications, potentially affecting $10 billion in annual sales.
  • Johnson & Johnson (JNJ) and Merck & Co. (MRK) will also lose patent protections for their biotechnology medicines, impacting their sales and revenue.
  • Genzyme Corp. (GENZ) is open to potential deals, including a $18.5 billion offer from Sanofi-Aventis, provided its experimental multiple sclerosis drug, Campath, is adequately valued.
  • Sanofi-Aventis has made a $18.5 billion offer for Genzyme Corp. (GENZ) to acquire its assets, including the experimental multiple sclerosis drug, Campath.
  • Biogen Idec Inc. (BIIB), Johnson & Johnson (JNJ), and Merck & Co. (MRK) have faced challenges due to the new biotechnology medicine rules in Euro-Zone countries.
  • The new rules could have a significant impact on the companies' revenue and sales.

Statistics:

  • $10 billion: Annual sales of proprietary medications for multiple sclerosis and rheumatoid arthritis (BIIB).
  • $18.5 billion: Offer made by Sanofi-Aventis to acquire Genzyme Corp. (GENZ).
  • 2015: Year by which Biogen Idec Inc. (BIIB) is expected to lose patent protections.

Sources:

  • MidnightTrader via COMTEX (2010)
  • Bloomberg News
  • Le Figaro (French newspaper)
  • Comtex News Network, Inc. (2004-2010)
  • MySmarTrend