Boston, MA -- (SBWIRE) -- 04/11/2014 -- Despite the Spanish economy returning to growth in 2014, the country's pharmaceuticals and healthcare sectors show no sign of following suit. The Spanish government's ongoing cash flow troubles and aggressive fiscal austerity measures, which focus heavily on cost containment in the healthcare sector, will continue to negatively impact pharmaceutical companies operating in Spain.
Headline Expenditure Projections
- Pharmaceuticals: EUR24.09bn (US$31.79bn) in 2013 to EUR22.81bn (US$28.97bn) in 2014; -5.3% in local currency terms and -8.9% in US dollar terms.
- Healthcare: EUR98.71bn (US$130.30bn) in 2013 to EUR98.57bn (US$125.19bn) in 2014; -0.1% in local currency terms and -3.9% in US dollar terms.
In BMI's Pharmaceutical Risk/Reward Ratings (RRRs) for Q214, Spain scored 64.6 and ranked 12th out of the 15 countries surveyed in Western Europe. While Spain offers investors positive features, such as its large drug market, it also has problems, such as the government's focus on cost containment, low population growth, cumbersome bureaucracy and provincial differences regarding drug regulations and reimbursement.
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Key Trends And Developments
US-based financial services firm Goldman Sachs was to place 5% of Spanish pharmaceutical company Almirall, which is currently held by Grupo Plafin, through an accelerated book building process. The US investor reported in a statement to the Spanish stock market regulator that the private placement of around 8.7mn shares was to be made to institutional investors.
Spanish drugmaker Grifols signed a US$1.5bn loan to back its purchase of Swiss drugmaker Novartis' blood transfusion testing unit. The loan was provided by Nomura Holdings, BBVA and Morgan Stanley. Novartis previously agreed to sell the diagnostic unit for US$1.68bn to Grifols in November 2013.
Spanish pharmaceutical company Almirall was to acquire US-based specialty pharmaceutical company Aqua Pharmaceuticals for a cash consideration of about US$400mn. The move will allow Almirall to expand its dermatology segment and enter the US pharmaceutical market.
BMI Economic View: Spain's economy will return to growth in 2014, due to steady export growth and the progress made on corporate deleveraging. However, a more balanced recovery will be restricted by Spanish households' lack of progress in paying down their debts, with much more pain ahead for Spanish consumers.
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