Dublin-based Shire announced its all-cash purchase of privately held Foresight Biotherapeutics, expanding the pharmaceutical company’s ability to develop medicine against viral and bacterial forms of conjunctivitis.
UK-listed Shire has been increasing its investment in eyecare while also pushing for approval from regulators for its own treatment for dry-eye disease, lifitegrast.
“Ophthalmics is a highly attractive growth area for Shire and this acquisition allows us to strengthen our presence,” said Flemming Ornskov, Shire chief executive.
Foresight’s drug, known as FST-100 is a perfect companion medicine to lifitegrast for a pharmaceutical company. If both obtain approval for use then together they will “address two of the leading reasons people seek eyecare treatment,” Mr Ornskov said.
Last year Shire created a dedicated opthalmics division, separate from its main business selling treatments for rare diseases and attention deficit Hyperactivity disorder.
Shire purchased Foresight for $300 million as it’s stock is trading at near-record prices of £57.30, considerably more than the £52.48 per share that AbbVie of the US tried to pay last year in its takeover bid, which eventually fell through.
Electric hearing aids were developed around the time of the end of the nineteenth and beginning of the twentieth century. In all those years no one was ever able to create a hearing aid that would be affordable and effective for many people who suffer from hearing loss, until now.
Affordable and Efficacious Hearing Aids
Based in Colorado, Able Planet is a manufacturer of headphones, but they are planning on launching a new line of amplification devices designed to do the job right. Beginning in March Able Planet will release their first new product of this type, the Personal Sound AMP. A band holds the device in place within the ear, into which it fits perfectly, as its dimensions are smaller than the size of a dime.
Able Planet estimates that the device will cost about $800 for a pair, favorably competitive with traditional hearing aids which often cost thousands of dollars. Due to the prohibitively high cost only 9 percent of seniors who need hearing aids in the US who make less than $50,000 a year actually own a pair, according to a 2010 survey conducted by a medical devices research firm called Parks Associates.
Serial Entrepreneur
Chief Executive Officer Kevin Semcken bought Able Planet six years ago. Semcken is 52 years old and has bought built and sold seven medical technology companies over the years, as a serial entrepreneur and private investor.
Semcken bought Able Planet when it was mired with debt problems and multiple design lawsuits, but it hasn’t stopped him from continuing to lead the charge into the hearing aid market.
Although it is true that Able Planet’s income today derives mostly from sales of its consumer headphone products, the company was originally founded to be a source of the manufacture of hearing devices. It has been the expense of research and development made it a prohibitive undertaking financially during the doldrums of the recession.
One Percent of Market Share
Ninety percent of Able Planet’s $30 million in revenue in 2011 came from its consumer electronics. The products are sold on-line and in retail outlets such as Costco in the US and in Mexico and Japan. Able Planet, which is headquartered in Wheat Ridge, Colorado, competes with the likes of Bose, Monster Cable Products and Sony, industry leaders in the $900 million domestic market for stereo headphones. Ben Arnold, and audio and video industry analyst at market research firm NPD Group says that Able Planet has about 1 percent of the market share for stereo headphones.
Watson Pharmaceuticals Inc. (WPI) is a company specializing in urology and women’s health pharmaceutical products. The company sells both generic brands as well as name brands. Women’s health care comprises many different diseases which of course requires many types of medicines. Watson has three segments: Global Brands, Global Generics, and the distribution segment. One of the benefits of producing generic medicine is that as soon as the original patent expires, the well tested and well used drug can be manufactured by anyone and with no R&D costs. The company provide medications for a wide variety of health conditions so there is great demand for its products.
The amazing thing about this stock is that for the last two years it has been going up at a steady pace. It has been essentially unaffected by the market ups and downs. It’s the old story: People will always get sick and will always need medical cures.
Some of the directors and management staff are Sigurdur Oli Olafsson, Charles M. Mayr, and Michael J. Fedida.
As with all investment decisions, purchasers should thoroughly investigate the stock before purchasing and should follow the stock every day.
Henry Schein Inc. (HSIC) is a great example of a business with similar product lines. In fact it is so good that it has three product lines with similar marketing strategys. They sell health care products to practitioners with private offices or clinics, particularly, dentists, general medical practitioners and, believe it or not, animal health clinics. They have health care technology segments in which they develop the technology and also healthcare distribution networks to market their products in 21 countries.
What I like about this is that they that the marketing system is the same for all of the product lines. They all sell health equipment and they all sell to private practitioners with small offices or clinics. In other words, the sales forces operate on similar principles, so what they learn in one product line can be applied to the other product lines. They also make money on the exchange rates which shows financial savvy.
The company’s stock has also been rising steadily from 2009 until the end of July 2011, when it reached $75 per share. It then dropped down to $60 which appears to be because of the world economy. This might be a good stock to invest in but I personally would wait until I see that it is going back up. As with all stocks this requires a thorough examination before buying to determine if it is the stock’s situation at the time of purchase. In addition, this is a fortune 500 company, which as I said is multinational. The multinational aspect gives it an added aspect of stability in my opinion.
Some mangers to look out for at this company are Michael Zack, the President of the International Group, Ms. Lonnie Shoff, the President of the Healthcare Specialties Group, Michael Racioppi, a Senior VP and chief Merchandising Officer and Steven Paladino, the CFO.
Elder Pharmaceuticals has big plans. Over the next two years 35 new products will be launched; the company’s sales and marketing force will expand by 1,000 and further development in rural markets will take place.
Looking at where the company is now – as compared to where it hopes to be in two years – one can immediately see how much growth is intended. Right now, Elder Pharmaceuticals in India has around 3,500 employees. A staggering 3,000 of these are in the marketing and sales department. According to the company’s director Alok Saxena, “there has been a revival in demand across pharmaceutical segments but the real growth story lies in the rural and semi-urban markets which we expect to grow at about 15 per cent annually from the current level.” But if the company wants to develop in rural areas, it is going to need to “reach out to physicians, specialists, chemists, hospitals, nursing homes, and private healthcare institutions.” As well, if the company is able to “bolster its field workforce quickly” then its growth plans will be significantly facilitated.
Elder’s Rural Development
Elder Pharmaceuticals has a rural division called Elvista, which has already made inroads into rural and semi-urban markets around the region. According to Saxena, before the end of next year, it “plans to reach 1,500 villages with populations of below 40,000, 300 villages with populations of 40,000 to 1 lakh and over 75 peripheral villages/towns around Mumbai Metropolitan region.”
So there is much to look forward to. Much promise lies ahead for Elder Pharmaceuticals and Elvista.
