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Global pharmaceuticals sector seen “Stable” – Moody’s

Global pharmaceuticals sector seen “Stable” – Moody’s

Mubasher: The pharmaceutical industry across the world is expected to register a growth of 1%-2% in earnings during the coming 12 to 18 months, Moody's Investors Service says in its recent report.

This forecast will boost a “Stable” outlook on the sector, as the rating agency's stable outlook and modest EBITDA growth reflect solid underlying fundamentals, including growing utilisation of prescription drugs, expansion in emerging markets, in addition to positive pricing trends in the US in many therapeutic areas.

Pharmaceutical companies focusing on cancer drugs are expected to see the highest EBITDA growth of more than 10%, while companies with a strong portfolio of products treating rare diseases will register solid growth in the 6%-10% range.

“Earnings growth will likely decline for a number of rated companies facing various pressure points including patent expirations, declining hepatitis C treatments and declining trends in generics and opioids,” Moody’s said.

Moody's analysts forecast that the pharmaceutical sector will continue to replenish its late-stage pipeline through a combination of internal projects supplemented by acquisitions and collaborations.

Moody’s projected acquisition strategic plans to be shaped by patent expirations, as many corporations face short-term patent cliffs on some of the largest drugs in their portfolios during the 2022-2026 period, according to Michael Levesque, a Moody's Senior Vice President.