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Health Care Roundup: Market Talk

19 May 2018 8:20 am

The latest Market Talks covering the Health Care sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1519 GMT - London shares remain in the red as Glencore falls 4.2% after reports that the miner may face a probe into its dealings in the Congo. The FTSE 100 Index drops 25.37 points to 7762.6 following reports that the U.K.'s Serious Fraud Office is preparing to seek permission for a full investigation into Glencore's dealings with Israeli billionaire Dan Gertler and Congo's leader Joseph Kabila. Elsewhere, shares in paper and packaging company D.S. Smith rise 2.1% on a brokerage upgrade. AstraZeneca falls 2.3% after first-quarter earnings fell 37%. (philip.waller@wsj.com)

1440 GMT - Zimmer Biomet, a leading maker of artificial knees and hips, is having a tough time fixing problems at a manufacturing plant in its hometown of Warsaw, Ind. US Food and Drug Administration inspectors visited the plant in April and wrote up an 18-page report listing various lapses, including insufficient procedures to ensure that devices are sterile. The FDA also said some of the problems were repeat observations from a 2016 inspection. Zimmer says it stands behind the safety of products made there, and it's continuing to make progress on a two-year plan to improve the factory. Wells Fargo analysts say the new inspection report "would be considered a bad report for any company, but likely represents progress for ZBH given the extent of observations in the prior" inspection in 2016. Shares fall 0.9%. (peter.loftus@wsj.com; @Loftus)

0959 GMT - Hikma Pharmaceuticals continues to face a challenging U.S. generics market, although it has had a good start to 2018, Jefferies analysts say. Shares in the pharmaceutical company are down 0.8% at 1,388.50 pence, after it backed its guidance for the full year and said its cost-cutting efforts are on track. "Hikma reiterated full-year guidance but this is somewhat expected in our view given it was only provided in March," Jefferies analysts say. According to the brokerage, Hikma's injectables sales should be supported by new product launches despite increasing competition, while the branded segment should benefit from demand in its top markets. (adria.calatayudvaello@dowjones.com)

0954 GMT - London shares fall as the price of a barrel of Brent crude dipped back below $80 on fresh concerns about trade between the U.S. and China. The FTSE 100 Index drops 0.1% to 7786.12. Brent gains 0.5% to $79.67. BP PLC is flat at 584 pence and Royal Dutch Shell B-shares fall 0.4%. "Trump's doubts over the success of trade negotiations with China may be part of an ongoing strategy, yet the continued instability in expectations provides an uncertain environment," says IG's Josh Mahony. Shares in packaging companies D.S. Smith PLC and Smurfit Kappa PLC rise on reports that International Paper may improve its takeover offer for Smurfit. AstraZeneca PLC falls 2% after first-quarter earnings fell 37%. (philip.waller@wsj.com)

0931 GMT - First-quarter sales of AstraZeneca's blockbuster cholesterol medicine Crestor as well as those of other important legacy drugs missed the consensus forecast, says Jefferies. Crestor's sales were 13% below expectations as its patent expired in Europe and Japan and generic drugs eroded its sales, the brokerage says. Fellow legacy drugs Pulmicort and Symbicort missed expectations by 9% and 1%, respectively, says Jefferies. Nonetheless, Jefferies says, recently-launched Tagrisso and Lynparza both beat market expectations by 9% and 4%, respectively. Shares down 2% at 5236 pence. (dimitrios.kontos@dowjones.com)

0931 GMT - Shares in AstraZeneca PLC Friday drop 2.1% to 5232 pence after the drug company said first-quarter profit fell 37% despite a slight rise in sales, citing divestment timing as one of the factors that hurt its overall results. Liberum Capital says the results are reasonably solid despite the headline miss on product sales and core earnings per share. The brokerage notes that the 1% product sales miss was driven entirely by genericising anti-cholesterol drug Crestor whilst key new products beat expectations. (philip.waller@wsj.com)

0840 GMT - Hikma Pharmaceuticals has delivered a solid first-quarter performance, Numis says, lifting its target price to 1,560 pence from 1,400 pence. Year to date, the company's injectable segment has continued diversification in the U.S., and recent product launches are expected to drive revenue growth at its branded segment, Numis says. The London-based pharmaceutical company enjoys a strategic position in the Middle East and North Africa region--where it generates around a third of its revenue--and the outlook for per capita spending on healthcare in the region is improving, Numis says. (adria.calatayudvaello@dowjones.com)

(END) Dow Jones Newswires

May 19, 2018 04:20 ET (08:20 GMT)

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