Shire stumbles as it lets slip drugs cost worries
SHIRE suffered a sell-off after the biotech giant raised concerns about its haemophilia treatments.
The FTSE 100 firm was reported to have revealed in an interview that its haemophilia treatments were at risk of being excluded from the list of covered medicines that insurers will pay out for.
It was also reported that it is considering ways to manage the rising costs of medicines for the condition so that patients aren’t forced to switch treatments.
This made investors nervous that Shire’s profits could be hit.
But analysts at Liberum said investors had overreacted and that prices for treatments will rise only around 2pc, considerably less than price rises in the past which have been in double digits.
It added: ‘[This overreaction] is particularly the case given the dearth of any detail over which haemophilia drugs could be affected.’
Liberum said worries for the sector around next week’s US election were likely to be fuelling shareholder jitters. Shire reports its third-quarter results today. Shares dropped 2.8pc, or 131.5p, to 4650p.
The FTSE 100 finished 0.6pc, or 42.04 points, lower at 6954.22. Advertising firm WPP was the greatest riser of the day as it reported strong sales growth. It gained 4.1pc, or 70p, to 1778p.
Just Eat was the highest climber on the FTSE 350. Investment firm Wellington Management gobbled up 34m shares in the fast-food ordering app, giving it a 5pc stake. It is now the fourth largest shareholder in the business. Just Eat jumped 5pc, or 27p, to 562p.
The oil price tumbled 3pc in the day, back down to $48 a barrel and its lowest point in a month. That didn’t seem to hurt commodity companies though. Randgold Resources was among the highest risers on the market for the day, up 3.4pc, or 240p, to 7240p, while Anglo American advanced as it completed the sale of its Callide mine in Australia. Shares soared 2.9pc, or 31.5p, to 1131p.
Precious metal miner Centamin rose as it reported a 41pc increase in gold production. The firm produced 148,674 ounces in the third quarter, compared to 105,413 ounces in the same period last year.
Centamin said full-year production is likely to be towards the upper end of its guidance, while costs are set to be near the lower end of expectations. Shares surged 1.1pc, or 1.7p, to 157.8p.
Lonmin, another metal miner, climbed as it announced a wage deal with the miners’ union in South Africa.
A three-year deal regarding pay and conditions of service has been struck with employees, which runs until June 30, 2019. The agreement covers increases to basic salary, living allowances, medical contributions and holiday leave.
Chief executive Ben Magara said that the deal illustrated the growing maturity of the relationship between the company, its employees and union representatives.
The agreement follows months of striking in 2014 as workers demanded their wages were doubled. The tensions hit several mining companies, with around 40pc of the world’s platinum production brought to a standstill. Lonmin shares yesterday advanced 3.3pc, or 6p, to 190p.
Oil and gas engineering services business Plexus Holdings fell back as it told investors they are not getting a dividend this year.
The Aim-listed business made a loss after tax of £5.8m in the year to June 30, down from a profit of £5.4m the year before. Sales revenue for the year was £11.2m, less than half of the £28.5m reported in the previous 12 months. Last year investors got 1.75p a share. Shares fell 2.9pc, or 1.75p, to 58.62p.
Pharma firm ConvaTec climbed on its first day of trading.
The medical products company listed on the stock exchange in the largest European healthcare float for more than 20 years.
With shares placed at 225p, ConvaTec raised £1.46bn, valuing the business at £4.4bn. London Stock Exchange said it was among the top-ten largest healthcare IPOs of all time. Shares finished their first day up 4.1pc, or 10p, at 250p.