11/2/2013: Irish Pharma Sector: December 2012

As promised in the previous post, ehre's some analysis of the breakdown for data for the Basic Pharmaceutical Products and Preparations Sector (BPP):

• Overall volume of production in the sector rose to 150.6 in December 2012, up strongly (+20.48%) m/m and even up y/y on year (+7.73%). However, compared to December 2010 the index is down 9% and relative to monthly peak it is down 16.47%. Back in December 2011 the index fell 15.53% y/y so there is some consolation there.
• 3mo average through December 2012 was down 5.79% on 3mo average through September 2012 and 11.53% down y/y.
• Overall, short-term rise in the index m/m is encouraging, but also consistent with pharma companies beefing up Q4 numbers.

Most worrying is the trend in Turnover - the series that tell us about profitability of the sector and returns in the sector. The series are sensitive to currency valuations, but overall they are closer in relationship to core pharma - the patent stuff.

• Turnover fell in December from 123.1 in November to 107.5 a drop of 12.67% m/m and down 39.47% y/y. Compared to December 2010 the index is now down 29.32% 
• The rate of fall is accelerating: in December 2011 the index rose 16.77% y/y as opposed to December 2012 fall of 39.47% y/y. 
• 3mo average through December 2012 was down 12.93% on 3mo average through September 2012 and 26.92% down on 3mo average through December 2011. Current 3mo period was down 21.55% on same period in 2010.

Chart below illustrates just how much out of line the turnover index is relative to historical readings and the contrast to volume of production index: