As markets slip back amid more nervousness about the Eurozone debt crisis, AstraZeneca is bucking the downward trend.
The pharmaceuticals giant is up 12p at 2886.5p after it reached a patent settlement on its best-selling Seroquel XR product - used for treating schizophrenic, bipolar disorder and depression - and pushing back the threat of generic competition in the US. The patent settlement with privately owned Handa Pharmaceuticals means it will not be able to sell a rival version of Seroquel XR in the US until late 2016, and could mean other generic makers are unable to enter the market until after then. Analysts had been expecting rival products to be launched from next year. Astra chief executive David Brennan said:
We believe this agreement reaffirms our intellectual property rights and is the right business decision for AstraZeneca at this time. Seroquel XR remains an important part of our company's portfolio.
Savvas Neophytou at Panmure Gordon said:
A downgrade risk has been mitigated significantly with the Company's settlement with Handa Pharmaceuticals regarding Seroquel XR. Although there are a number of other challenges remaining Handa's formulation was the most 'dangerous' in our view as it contained the least amount of overlap with Astra's patents. Torrent's formulation is in a similar position but after today's settlement, we expect Torrent to settle soon. Of the other challenges, Teva's is the most tenuous and we expect the company to prevail against Teva's claims.
We currently forecast that Seroquel will report a 3% increase in revenues to $5460m in 2011 and declining by 47.8% to $2850m in 2012 because of possible generics to the IR formulation. The Seroquel XR formulation represents still a small part, but growing of the total Seroquel franchise and importantly has patent protection to November 2017.
Overall, on another day of key meetings involving the Eurozone, with Austria voting on the July bailout plan and the Greek prime minister on a charm offensive, investors continue to be cautious, not least because of some poor German retail sales figures. The FTSE 100 is currently down 53.40 at 5143.44 while Germany's Dax is down 1.8% and France's Cac just over 1%. US futures are indicating an 83 point fall when Wall Street opens.
Burberry is the biggest faller in the leading index on continuing worries about the outlook for the luxury goods market, in particular in the Far East, not helped by a flat Chinese purchasing managers index ahead of PMI data to be released on Saturday. Burberry is down 67p at �11.34 while banks are also weaker, especially those with a strong presence in the Far East. So Standard Chartered has slipped 59p to �12.99 while HSBC is off 17p at 495.8p.
In such circumstances investors look - if they are looking at all - for safe havens and although gold's status has been tarnished by a recent slump as hedge funds and the like reportedly cash in some of their profits, utilities and tobacco companies are in demand at the moment.
Severn Trent has climbed 9p to �15.35 and United Utilities is up 3p at 623p, while Imperial Tobacco - punted as a possible takeover target earlier in the week - has risen 15p to �21.86.
There is also some optimism for gold bugs as the precious metal recovers a little ground, helping push Fresnillo up 47p to �15.61 and Randgold Resources 60p higher to �61.90.
Source: http://www.guardian.co.uk/business/marketforceslive/2011/sep/30/astrazeneca-patent-settlement
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