The Spanish pharma sector increases 5% in the first quarter despite the fall of Grifols

Pharmaceutical companies closed the first quarter of the year in the green on the continuous market. The aggregate capitalization of Grifols, Almirall, Rovi, Faes Farma, Pharma Mar, and Reig Jofre increased by 5.1% between January and March, below the 6.3% rise recorded by the Ibex35. 

The six listed pharmaceutical companies closed the first quarter with a stock market value of $20.8 billion (€17.75 billion), compared to$19.8 billion (€16.88 billion) at the end of the previous quarter. This rise was led by Pharma Mar, whose shares soared by more than 39%. 

The company presented in February 2021 the best annual results in its history, with a profit of $160.7 million (€137 million), compared with a loss of $10.7 million (€9.1 million) in 2019.  

Pharma Mar filed last February with the Spanish Agency for Medicines and Health Products (Aemps) its protocol to start the Phase III clinical trial of its Covid-19 drug, although it is awaiting a response from the regulator for the time being.

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Pharma Mar, which was the most bullish stock, closed 2020 with the best financial results in its history 

The second largest increase corresponds to Reig Jofre. The group’s shares rose 37.5% in the first quarter. The drugmaker posted a net profit of $6.7 million (€5.7 million) in 2020, up 15% compared to 2019, according to the latest results published. 

The Catalan drugmaker has reserved 80% of production at the new plant in Sant Joan Despí (Barcelona) for the manufacture of Janssen’s Covid-19 vaccine, the company’s CEO Ignasi Biosca acknowledged on March 5th. 

On the other hand, Rovi’s shares rose 21.3% at the end of the first quarter, to $54 (€46) per share. As of March 31st, the pharmaceutical company’s capitalization stood at $3 billion (€2.58 billion). The drugmaker posted a net profit of $71.7 million (€61.1 million) in 2020, 55% higher than in 2019, when it earned $46 million (€39.3 million). 

Research and development (R&D) expenses stood at €23.8 million. These R&D expenses are mainly linked to the preparation of Doria’s registration dossier for submission to the U.S. Food and Drug Administration (FDA).   

Almirall shares rose to $15.2 (€13) per share 

Shares of Almirall, which specializes in dermatological drugs and spasticity in multiple sclerosis, rose to $15.2 (€12.9) per share, an increase of 18.4% over the previous quarter. The Gallardo’s multinational company saw its 2020 performance affected by the profound impact of the pandemic on medical dermatology. The reduction in the number of medical consultations due to confinement and the change in prescribing habits have hurt sales, especially in the United States.

On the other hand, Grifols is the only company in the sector that has stumbled on the stock market during the period. The shares of the multinational owned by the Grifols family, which specializes in plasma derivatives, fell to $26.2 (€22.3) per share. However, it is the pharmaceutical company with the largest stock market capitalization, exceeding $10.56 billion (€9 billion), which is why it is dragging down the total.

In mid-March, Grifols began a program to buy back its own shares for a maximum amount of $146.6 million (€125 million), an action that will be extended until June 14. The company’s objective is to build up treasury stock which it will use in the future as payment for future corporate operations. The maximum number of shares to be acquired is set at 6.8 million. 

Grifols reduced its profit in 2020 by 1.1% compared to 2019, to $726 million (€619 million). The company justifies these results by the impact of Covid-19. Grifols estimates the net impact of the coronavirus on gross operating profit (ebitda) at $181.8 million (€155 million). This amount mainly includes the negative impact on inventory valuation and lower revenue growth in the bioscience division in the fourth quarter of 2020.

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(Featured image by Images Money CC BY 2.0 via Flickr)

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