Morning business news - May 13Tuesday 13 May 2014 10.54
Waterford-based pharma company Eirgen is in the middle of a multi-million euro expansion. The company has completed a €4m investment and is adding 40 new jobs.
Co-founder and chief technology officer Tom Brennan says the company, which was founded in 2005, develops and manufactures niche generic anti-cancer medicines from its FDA-approved plant in Waterford. He describes the drugs which Eirgen focuses on as "high-barrier to entry", adding that they are difficult to develop and manufacture and are typically more high value and low volume than the other way around. Mr Brennan says there is a lot of consolidation in the pharma industry at the moment, with even the big drug firms going after more niche therapeutic areas and moving into biologics and DNA-based therapies which are a lot more specific that the big blockbuster drugs.
Eirgen is seeing global growth and Mr Brennan points out that 50% of its business is done in the US. The company started out with one product and it now has five different molecules which it sells in 185 different pack configurations in 40 markets around the world. The company has 20 more products in development and the new jobs will give it the capacity to continue with its R&D pipeline and support its commercial supply chain for when it brings the next wave of products to commercial supply.
Nine of the top ten pharma companies in the world have a presence in Ireland, and Mr Brennan says that 25,000 employees work in the industry. But he adds that while the situation is improving, there is only a few mid-sized Irish companies in the sector. He says there is room for a lot more such firms, based on the technology embedded here already. He states that Ireland "ticks all the boxes" for further expansion in the pharma industry due to the big talent pool already here, the high level of quality standards and compliance and the low corporation tax rate - this all gives the country a very good reputation.
MORNING BRIEFS - Paddy Power chief executive Patrick Kennedy will step down from that role in a year's time. He said he had always had a personal view that after ten years at the helm, change is good, both for the business and the individual. "With this in mind, I have today given notice to the Board of my intention to step down next April, the tenth anniversary of my appointment," he said. In its interim management statement ahead of its annual shareholder meeting today, meanwhile, Paddy Power said that growth so far this year has been strong with total net revenue up 5%.
*** Food company Glanbia is positive in its outlook for 2014, according to an interim management statement published this morning. Earnings overall will be in line with previous expectations of 8-10% growth it said. Its consumer products business in Ireland, however, where Glanbia owns brands such as Avonmore, continues to face what the company calls "significant headwinds". Heavy price promotions and discounting activity is hurting margins for both suppliers and retailers it says as consumers remain cash-strapped and seek out value.
*** Savers are beginning to find other purposes for any surplus cash than paying down debt, according to the latest Savings Index from Nationwide UK (Ireland) and the ESRI. In April, 47% of the respondents said they would use surplus cash to pay debt, down from 53% in the same month last year. 39% said they would save it, up from 33% last year but only 10% said they would spend it - this reflects the continuing pressure on disposable incomes.
Nationwide UK (Ireland) managing director Brendan Synott said there were indications from the survey that people were moving from being very cautious to a situation where their level of spending may increase. But issues in the wider economy, including the introduction of water charges, would have an impact on spending intentions in the year ahead, he added.
*** Pfizer is having to work hard to convince British politicians that if it were to succeed in taking over smaller rival AstraZeneca that the consequence would not be job cuts and reduced levels of investment in the UK. Pfizer's boss Ian Read will be questioned at a UK parliamentary committee today on his company's £63 billion approach for AstraZeneca.