By Angela Chen
Hospira Inc. reported a better-than-expected profit in the June
quarter as its injectable drugs continued to drive growth.
The results come as Hospira moves forward with plans to sell
itself to Pfizer Inc. for about $17 billion. That deal is expected
to close in the second half of the year.
Hospira is among the leading companies selling injectable drugs
and biosimilars. The deal will give Pfizer, which has been trying
to build up its own businesses in those areas, the opportunity to
expand and take leading positions in fast-growing markets.
The deal comes as Hospira faces challenges to a key business.
Over the past couple of years, manufacturers of injectable drugs
have benefited from product shortages that made it possible to
raise prices. The shortages were often attributed to tougher
inspections by the U.S. Food and Drug Administration, but these
typically take about two years to resolve, suggesting the latest
cycle of price increases may be nearing an end.
In April, Hospira said it received a warning letter from the
U.S. Food and Drug Administration saying its response to findings
last year of quality issues at a plant in Italy was lacking. It
also said recently that it would need regulatory approval to sell
products made at one of its locations in India, after an inspection
found several potential violations.
Hospira is currently involved in two lawsuits regarding whether
Eurohealth International Sarl and West-Ward Pharmaceutical Corp.
can market generic forms of Hospira's dexmedetomidine hydrochloride
treatment, called Precedex. Both cases are pending.
According to a regulatory filing on Wednesday, Hospira has
entered confidential settlement agreements regarding Precedex with
Sun Pharmaceutical Industries Inc., Gland Pharma Ltd., Akorn Inc.,
Actavis US Holding LLC and Actavis LLC.
Overall for the most recent quarter, Hospira reported a profit
of $145 million, or 82 cents a share, compared with $70.9 million,
or 42 cents a share, a year earlier.
Excluding one-time items, earnings were 85 cents a share, up
from 72 cents a share a year ago.
Sales climbed to $1.18 billion from $1.14 billion, mostly due to
the growth of specialty injectable pharmaceuticals in the U.S.
Analysts polled by Thomson Reuters expected a per-share profit
of 80 cents and revenue of $1.18 billion.
In the Americas, revenue from specialty injectable
pharmaceuticals grew 4%, though they would have increased 5.3% were
it not for the effect of the strong dollar. Medication management
sales, however, fell 4.1% to $169 million.
Globally, specialty injectable sales grew 3.4%, while medical
management sales fell 6.3%. Other pharmaceuticals surged 25% to
149.3 million.
Shares have increased about 46% this year through Tuesday's
close.
Write to Angela Chen at angela.chen@wsj.com
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