Connect with us

Business

HSBC profits plunge by more than 82% as loans sour

Published

on

hsbc profits plunge by more than 82 as loans sour

HSBC profits plunged more than 82 per cent as the bank warned £10billion worth of loans could turn sour this year due to the coronavirus pandemic. 

The London-headquartered lender, which makes most of its money in Asia, said pre-tax profits slid to just £824m in the three months to June 30, down from £4.7billion over the same period last year. 

This was much worse than the £1.9billion expected by analysts, and caused shares to slump 2.9 per cent, or 9.95p, to 332.25p – their lowest level since March 2009 during the depths of the last financial crisis. 

Slump: The lender said pre-tax profits slid to just £824m in the three months to June 30

Slump: The lender said pre-tax profits slid to just £824m in the three months to June 30

Slump: The lender said pre-tax profits slid to just £824m in the three months to June 30

HSBC boss Noel Quinn said he was planning to ‘accelerate’ his shake-up of the bank in a cost-cutting drive which was already set to see 35,000 jobs axed globally by 2022. 

The brutal restructuring was initially put on hold during the pandemic, but chief financial officer Ewen Stevenson confirmed yesterday that 3,800 jobs had been cut since the beginning of the year. 

And in a worrying sign for office landlords and business districts around the world, Quinn added that the bank may need less office space in future as the pandemic pushed more staff to work from home. 

He said: ‘I do think there’s potential over the medium term to reflect on different ways of working, allowing people greater flexibility to work from home or in the office.’ 

Prime Minister Boris Johnson has urged workers to return to their offices where possible as lockdown eases, to bring life to deserted business hotspots. 

But the majority of staff at HSBC and other major financial institutions have been working at home throughout the pandemic, and many firms are now wondering whether they need all of their towering skyscrapers in costly locations such as Canary Wharf and London’s Square Mile. 

The pandemic has also been weighing on HSBC’s loan book, as it thinks more borrowers will become unable to repay their loans due to job losses and the resulting economic downturn. 

It had already set aside £2.3billion to cover bad loans in the first three months of 2020, and ramped this up to £5.3billion in June as the extent of the damage began to emerge. 

HSBC warned the cost over the full year could be as high as £10billion. Its outlook for the UK was gloomy, as around £1billion of the expected losses were linked to the country. On top of the coronavirus troubles, HSBC has been dealing with a flare-up in tensions between the US and China. 

The bank angered MPs, customers and investors when it supported the controversial law imposed by China on Hong Kong in June. 

The national security law drastically reduces Hong Kong citizens’ rights, and makes it a crime for anyone to criticise Beijing’s Communist regime. 

Quinn yesterday denied the bank would be forced to choose between its operations in the West and its more profitable business in Asia. He said: ‘Current tensions between China and the US inevitably create challenging situations for an organisation with HSBC’s footprint.’ 

And despite prominent pro-democracy protester Joshua Wong claiming he had faced increased questions from HSBC over his finances since the law was introduced, HSBC denied it was screening customers specifically to check whether they had pro-democracy links. 

Quinn insisted that the bank was simply complying with all laws in the jurisdictions it operates in, and refused to speculate on the possible impact which US sanctions on Chinese officials could have. 

  • Metro Bank has bought Ratesetter as it ramps up its efforts to expand into more profitable lending. Metro, which is trying to recover from a bleak 2019 when it swung to a £11.7m loss, will buy the online lender for up to £12m. Ratesetter matches investors who want to lend with borrowers who are in need of cash, and offers personal loans, financing for car dealers, and loans for property developers, and has handed out more than £4billion since it launched.
#fiveDealsWidget .dealItemTitle#mobile {display:none} #fiveDealsWidget {display:block; float:left; clear:both; max-width:636px; margin:0; padding:0; line-height:120%; font-size:12px} #fiveDealsWidget div, #fiveDealsWidget a {margin:0; padding:0; line-height:120%; text-decoration: none; font-family:Arial, Helvetica ,sans-serif} #fiveDealsWidget .widgetTitleBox {display:block; float:left; width:100%; background-color:#af1e1e; } #fiveDealsWidget .widgetTitle {color:#fff; text-transform: uppercase; font-size:18px; font-weight:bold; margin:6px 10px 4px 10px; } #fiveDealsWidget a.dealItem {float:left; display:block; width:124px; margin-right:4px; margin-top:5px; background-color: #e3e3e3; min-height:200px;} #fiveDealsWidget a.dealItem#last {margin-right:0} #fiveDealsWidget .dealItemTitle {display:block; margin:10px 5px; color:#000; font-weight:bold} #fiveDealsWidget .dealItemImage, #fiveDealsWidget .dealItemImage img {float:left; display:block; margin:0; padding:0} #fiveDealsWidget .dealItemImage {border:1px solid #ccc} #fiveDealsWidget .dealItemImage img {width:100%; height:auto} #fiveDealsWidget .dealItemdesc {float:left; display:block; color:#004db3; font-weight:bold; margin:5px;} #fiveDealsWidget .dealItemRate {float:left; display:block; color:#000; margin:5px} #fiveDealsWidget .footerText a:hover{text-decoration: underline;} #fiveDealsWidget .footerSmall{font-size:10px; padding-top:10px;} @media (max-width: 635px) { #fiveDealsWidget a.dealItem {width:19%; margin-right:1%} #fiveDealsWidget a.dealItem#last {width:20%} } @media (max-width: 560px) { #fiveDealsWidget #desktop {display:none;} #fiveDealsWidget #mobile {display:block!important} #fiveDealsWidget a.dealItem {background-color: #fff; height:auto; min-height:auto} #fiveDealsWidget a.dealItem {border-bottom:1px solid #ececec; margin-bottom:5px; padding-bottom:10px} #fiveDealsWidget a.dealItem#last {border-bottom:0px solid #ececec; margin-bottom:5px; padding-bottom:0px} #fiveDealsWidget a.dealItem, #fiveDealsWidget a.dealItem#last {width:100%} #fiveDealsWidget .dealItemContent, #fiveDealsWidget .dealItemImage {float:left; display:inline-block} #fiveDealsWidget .dealItemImage {width:35%; margin-right:1%} #fiveDealsWidget .dealItemContent {width:63%} #fiveDealsWidget .dealItemTitle {margin: 0px 5px 5px; font-size:16px} #fiveDealsWidget .dealItemContent .dealItemdesc, #fiveDealsWidget .dealItemContent .dealItemRate {clear:both} }

Powered by: Daily Mail

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Tesla’s 520-mile range Model S Plaid goes on sale in the UK for £131k

Published

on

By

teslas 520 mile range model s plaid goes on sale in the uk for 131k

British Tesla fans have been offered the chance to buy its new 200mph tri-motor Model S ‘Plaid’ – which will become the electric car with the longest range available from 2021.

Following Tesla Battery Day on Tuesday, the US brand has listed for sale in the UK the new Model S Plaid, with an ‘estimated range’ in excess of 520 miles – beating the Model S Long Range by 141 miles and more. 

It also has a claim ed under 2 second 0 to 60mph time but won’t come cheap, though. The starting price is a whopping £131,000, with first deliveries expected to hit these shores around the end of 2021.

However, one Tesla that probably won’t hit showrooms in the UK is the Cybertruck, with Elon Musk admitting that it is unlikely to be sold outside of the US due to safety regulations and the vehicle’s size.

Tesla's 520-mile electric family car for 2021: Britons can already order the Model S Plaid on the firm's UK website

Tesla’s 520-mile electric family car for 2021: Britons can already order the Model S Plaid on the firm’s UK website

The Tesla site confirms the price of the tri-motor Model S and the estimated first deliveries arriving in late 2021

The Tesla site confirms the price of the tri-motor Model S and the estimated first deliveries arriving in late 2021

The Model S Plaid will take on the might of the Porsche Taycan and also cement the Tesla brand as the rangiest electric car maker on the planet. 

It will be powered by the firm’s most potent three-motor electric powertrain – which delivers a claimed output of 1,100bhp.

While no exact performance figures have been revealed, Tesla’s UK ordering website states that a sprint from zero to 60mph will take less than two seconds – claiming the fastest ‘acceleration of any production car ever’ and it says the top speed will be 200mph.

It also states an ‘estimated range’ of ‘520+ miles’. 

How does that compare to Porsche’s battery-powered sports car?

The longest range for the three versions of the Taycan is the mid-spec Turbo, with a 281-mile distance from a full charge.

The Turbo S – with both Turbo and Turbo S not having turbochargers at all but named in such a way for consistency with Porsche’s petrol car line-up – is the quickest to 62mph, taking 2.8 seconds and has a top speed of 162mph.

That means the Model S Plaid will be far and away the highest-performing plug-in car the market has seen yet – though fans will need to wait over a year to get their hands on one, and significantly empty their savings.

Elon Musk pictured during Tesla's Battery Day, held on 22 September and used to promote new advances in EV technology currently being developed by the manufacturer

Elon Musk pictured during Tesla’s Battery Day, held on 22 September and used to promote new advances in EV technology currently being developed by the manufacturer

Elon Musk wants to dethrone the Porsche Taycan and take its claim as being the fastest production electric car with four doors

Elon Musk wants to dethrone the Porsche Taycan and take its claim as being the fastest production electric car with four doors

That’s because the UK website says first deliveries won’t arrive until the ‘late 2021’ and the price is an eye-popping £130,980 – which is likely to shift significantly due to changing exchange rates between now and the end of next year, especially with Brexit taking hold in this period.

That makes the Plaid £38,000 more expensive than the next priciest Model S, the Performance (£92,980) and £33,000 more than the most expensive Tesla on sale to date, the £97,980 Model X Performance.

Tesla has confirmed that the Model S Plaid will feature a few specification changes to cope with the additional performance.

It will be fitted with wider wheels and tyres, flared wheel arches, a new front splitter, a large rear spoiler and a race-car-like rear diffuser. 

To help slow the hefty – but rapid – car down, the US brand will also equip it with more potent brakes and a revised suspension setup.

To welcome the new arrival on its Tesla Battery Day, the US car maker released the much-talked-about footage of the Model S Plaid lapping the Laguna Seca race track in America.

In a video posted to Twitter, it shows the electric car completing a lap in one minute and 30 seconds.

To put that in context, the current lap record at the circuit was posted last year in the £750,000 McLaren Senna , which posted a time of 1:27:62.

Elon Musk hopes the Model S Plaid – in the right hands – can shave three seconds off its best time to eclipse the lap of the limited-edition McLaren supercar. 

This will be part of a concerted effort by Musk for the Model S to knock the Taycan off its pedestal, with Porsche claiming it is the world’s ‘fastest four-door, all-electric sports car’, having recorded blistering laps at the California circuit and the Nurburgring – which is widely used by manufacturers to stake a claim to records for its super-fast road cars.

Tesla’s Model S Plaid has – in pre-production form – lapped the German circuit in a reported 7 minutes and 20 seconds, which shaves some 20 seconds off the Taycan’s time. However, no official lap time has yet to be posted by Tesla.

Elon Musk has conceded that the Cybertruck is unlikely to be sold outside of the US due to the need to meet regulations for other markets - a feat described as 'impossible', despite many other manufacturers producing cars that are sold in the same form globally

Elon Musk has conceded that the Cybertruck is unlikely to be sold outside of the US due to the need to meet regulations for other markets – a feat described as ‘impossible’, despite many other manufacturers producing cars that are sold in the same form globally

Tesla Model S Plaid is coming, but Cybertruck isn’t…

While a 520-mile-plus Model S is guaranteed to hit the UK market in around 12 months’ time, Elon Musk’s controversial Cybertruck won’t be doing the same.

We’ll probably make an international version of Cybertruck that will be kinda smaller, kind of like a tight Wolverine package 
Elon Musk 

Serious questions have been raised about the crash safety credentials of an angular-shaped pick-up with a stainless-steel body, especially the damage it could cause to pedestrians.

Critics have also said the enormous dimensions of the truck will be unfit for UK roads and any highways narrower than those used for US routes. 

And it seems these concerns were well founded, with Tesla’s star founder downplaying the availability of Cybertruck outside of America, if it does go into production. 

Tesla Battery Day: What else was announced? 

 – The annual Tesla Battery Day took place on 22 September 2020, having originally been planned for 15 September but pushed back by Musk.

– The firm confirmed plans for a more affordable electric model from the company, which would be priced from $25,000 (around £19,700 in the UK), but it would not be available for another three years.

– The affordable EV’s delay is due to the development of new cylindrical battery technology needed for the car to take shape. Lighter and more efficient, the batteries would be produced in-house by Tesla, thus negating the need for external suppliers such as Panasonic and LG, which would help bring vehicle costs down. 

– Tesla also announced a landmark for its charging infrastructure, confirming that its network of Superchargers now spans over 17,000 units worldwide.

Speaking at a Q&A session during his firm’s Battery Day, Musk conceded that it would be difficult for the wedge-shaped vehicle to meet vehicle regulations elsewhere to the US market. 

‘We are designing the Cybertruck to meet the American spec. If you try to design a car to meet the set of all global requirements, you can’t make the Cybertruck. It’s impossible,’ he said. 

When Cybertruck was first shown in November last year, This is Money said the vehicle would not be fit for purpose, suggesting the design would need to be completely overhauled in order for it to meeting stringent EU regulations. You can read our opinion piece here.

Musk went on to suggest that a smaller version of the humongous pick-up could be created for other markets.

‘We’ll probably make an international version of Cybertruck that will be kinda smaller, kind of like a tight Wolverine package’, Musk said. 

Wolverine is a name given to the heavy-lifting robots at Tesla’s factory in California, which is – of course – named after the X-Men comic-book character. 

Speaking yesterday, Musk claimed the brand has taken ‘over half a million orders’  for Cybertruck so far, though by the term ‘order’ it is referring to a $100 refundable deposit customers will get back if Cybertruck fails to ever surface.

SAVE MONEY ON MOTORING

Powered by: Daily Mail

Continue Reading

Business

We take the latest Porsche Panamera for a spin at the MoD’s tank testing grounds

Published

on

By

we take the latest porsche panamera for a spin at the mods tank testing grounds

The last time I drove a Porsche Panamera I had £3.3million in gold bullion stashed in the boot. 

I was taking part in an audacious run across London from a secret location to a vault in Hatton Gardens carrying a total of £10million in January 2018.

Sadly no gold was involved when test-driving two new models in latest Porsche Panamera line up – which has just been refreshed as part of a second-generation facelift.

But this time I had something far heavier than gold to contend with – tanks. 

Porsche's new family tank: The Panamera has had a mid-life facelift with new engines and a tweaked design. We've taken to the wheel at the Ministry of Defence's tank testing grounds

Porsche’s new family tank: The Panamera has had a mid-life facelift with new engines and a tweaked design. We’ve taken to the wheel at the Ministry of Defence’s tank testing grounds

Sinking into the comfortable and supportive sports seats, my test driving route in the luxury German sports tourer took me around the Ministry of Defence’s tank proving grounds and military firing range on Salisbury Plain, a stone’s throw from ancient Stone Henge in Wiltshire.

There is a tenuous but important link to the Panamera here, though. 

Porsche’s founder Ferdinand Porsche, having risen to fame, or infamy, designing the bug-like Volkswagen – Hitler’s ‘People’s Car’ – in the late 1930s then spent the war years designing tanks and heavy armour, including a vast machine ironically called ‘Maus’ (or ‘Mouse’) for the Third Reich, for which he subsequently served a bit of time behind bars after Germany’s eventual defeat.

The latest heavyweight from Porsche is a facelifited version of the second-gen Panamera that’s been on sale since 2018.

The brand’s first executive four-door car hit the market in 2009, and with more than 10,000 sold in the UK alone has been a hit among fans of the 911 who need some extra space for the family. 

Gunning for the executive car market: We've driven two variants of the new Panamera, including the e-Hybrid model

Gunning for the executive car market: We’ve driven two variants of the new Panamera, including the e-Hybrid model

Daily Mail motoring editor Ray Massey poses with one of the test cars before his first drive in the UK

Daily Mail motoring editor Ray Massey poses with one of the test cars before his first drive in the UK

Ray said the Panamera feels exceptionally big on the road, but said it was perhaps also down to the fact the launch cars were left-hand-drive models on German plates, driven in the UK

Ray said the Panamera feels exceptionally big on the road, but said it was perhaps also down to the fact the launch cars were left-hand-drive models on German plates, driven in the UK

Prices for the updated Panamera range from £69,860 for the base level Panamera (the only one with rear-wheel drive, the rest have all-wheel drive) up to £137,760 for the top of the range Panamera Turbo S Sport Turismo.

The Panamera is effectively a svelte and coupe like estate car. It also feels a very wide car. At the wheel of a left-hand-drive car on German plates on UK roads, it perhaps added to that sense of scale. 

About a third of UK Panamera buyers choose the ‘Sport Turismo’ estate body style which adds just over £2,000 to the price.

I drove two new models – the brutally efficient and rather beastly Turbo S (from £135,610) and the greener, leaner and – to my senses – more  civilised 4S E-Hybrid (from £101,690). Both were fitted with the enhancing Sport Chrono package.

The range-topping Turbo S’s meaty 4.0-litre V8 twin turbo engine develops a mighty 630 horsepower – an increase of 80 horsepower over the outgoing model – linked to a deft 8-speed double-clutch automatic gear-box.

The latest heavyweight from Porsche is a facelifited version of the second-gen Panamera that's been on sale since 2018

The latest heavyweight from Porsche is a facelifited version of the second-gen Panamera that’s been on sale since 2018

The brand's first executive four-door car hit the market in 2009, and with more than 10,000 sold in the UK alone has been a hit among fans of the 911 who need some extra space for the family

The brand’s first executive four-door car hit the market in 2009, and with more than 10,000 sold in the UK alone has been a hit among fans of the 911 who need some extra space for the family

The range-topping Turbo S’s meaty 4.0-litre V8 twin turbo engine develops a mighty 630 horsepower – an increase of 80 horsepower over the outgoing model - linked to a deft 8-speed double-clutch automatic gear-box

The range-topping Turbo S’s meaty 4.0-litre V8 twin turbo engine develops a mighty 630 horsepower – an increase of 80 horsepower over the outgoing model – linked to a deft 8-speed double-clutch automatic gear-box

That enables it to accelerate from rest to 62mph in just 3.1 seconds in ‘Sport Plus’ mode – and don’t you just feel it. It’s a beast. It exudes lithe and powerful performance yet doesn’t overwhelm. But the power is palpable.

Top speed, if you dare, is 196mph (shall we call it 200mph with a fair wind) where permitted, such as de-restricted German Autobahns.

Furthermore, it can sprint from 0 to 100mph in just 7.2 seconds and to 124mph in 11.2 seconds. That should be enough to outrun a British Challenger 2 tank, though I’m not sure I’d want to put its laser-lock gun-turret to the test.

The engine has been improved and upgraded with new fuel injectors, tweaked turbochargers and an modified exhaust and silencer system.

Visually, the front apron has been given large air inlet openings, while those trailing in its wake will get the benefit of seeing a new rear light strip across the back of the vehicle. To improve stopping power the brakes are 10mm greater in diameter. 

UK sales of the Panamera Turbo and Turbo S will represent around 15 per cent of the total.

The Panamera is aimed at Porsche fans who have families and their Boxster, Cayman or 911 will no longer suffice

The Panamera is aimed at Porsche fans who have families and their Boxster, Cayman or 911 will no longer suffice 

Boot space with the seats up is 467 litres
With the rear backrests flat the carrying capacity expands to 1,306 litres
Slide me

Boot space with the seats up is 467 litres, though with the rear backrests flat expands to 1,306 litres. The e-Hybrid has slightly less space due to the battery and electric motor arrangement

Switching to the petrol-electric 4S E-hybrid I instantly experienced the difference. It is fast and agile, but felt more mannered, fettled and sophisticated.

The plug-in hybrid is powered by a 2.9-litre V6 twin-turbo-charged 440 horsepower petrol engine with a linked to 136 horsepower electric motor integrated into the car’s eight-speed dual clutch automatic transmission. 

That gives a useable combined power is 560 horsepower, allowing for some leakage as it’s not a straight ‘a plus b’ performance calculation.

This allows it to sprint from rest to 62mph in 3.7 seconds up to a top speed of 185mph.

Acceleration from 0 to 100mph takes 8.6 seconds, and up to 124mph in 13.6 seconds.

The plug-in hybrid is powered by a 2.9-litre V6 twin-turbo-charged 440 horsepower petrol engine with a linked to 136 horsepower electric motor integrated into the car’s eight-speed dual clutch automatic transmission

The plug-in hybrid is powered by a 2.9-litre V6 twin-turbo-charged 440 horsepower petrol engine with a linked to 136 horsepower electric motor integrated into the car’s eight-speed dual clutch automatic transmission

It has a total of 560 horsepower, allowing for some leakage as it's not a straight 'a plus b' performance calculation

It has a total of 560 horsepower, allowing for some leakage as it’s not a straight ‘a plus b’ performance calculation

Battery capacity has been increased and there are six driving modes: E-Power, Hybrid Auro, E-Hold, E-Charge, Sport and Sport Plus.

It has an all-electric range of up to 34 miles (up 30 per cent) and an electric-only top speed of up to 87mph.

Official fuel economy figures for the hybrid range between 94.2mpg to 128.4mpg, with CO2 emissions of between 51g/km to 67g/km.

The new high voltage battery takes 2.6 hours to charge on a 7.2kW charger, and 4.8 hours on a 3.6 kW charger.

The remaining Panamera 4 costs from £72,890 and the GTS from £107,180.

The hybrid can sprint from rest to 62mph in 3.7 seconds up to a top speed of 185mph. Acceleration from 0 to 100mph takes 8.6 seconds, and up to 124mph in 13.6 seconds

The hybrid can sprint from rest to 62mph in 3.7 seconds up to a top speed of 185mph. Acceleration from 0 to 100mph takes 8.6 seconds, and up to 124mph in 13.6 seconds

The new high voltage battery takes 2.6 hours to charge on a 7.2kW charger, and 4.8 hours on a 3.6 kW charger

The new high voltage battery takes 2.6 hours to charge on a 7.2kW charger, and 4.8 hours on a 3.6 kW charger

Though Porsche has its headquarters in Stuttgart, in the South West of Germany, the Panamera is built at its Leipzig plant in former Eastern Germany.

Given the choice I’d personally go for the hybrid as I felt it easier to live with day to day while having fun on high days and holidays. But that’s me.

However, if you fancy the full-fat, no holds barred carnivorous flavour, the purists will plump for the beefier Turbo S.

Porsche Panamera: Will it fit in my garage? 

33522686 0 image a 98 1600859557132

Price range: £69,860 to £137, 760

Length: 5,049mm

Width: 1,937mm

Width (inc mirrors): 2,165mm

Height: 1,423mm

Wheelbase: 2,950mm

Doors: 4

Porsche Panamera Turbo S

Price: £135,610

Engine: 4.0 litre V8 twin-turbo.

Power: 630 Horse power (PS)

Transmission: eight-speed dual clutch automatic

0-62mph: 3.1 seconds

0-100mph: 7.2 seconds

0-124mph: 11.2 seconds

Top speed: 196mph

Fuel economy: 21.2 to 22.1mpg

CO2 emissions: 289 to 302g/km

Unladen weight: 2,155kg

Fuel tank: 90 litres

Boot space: 467 litres

Boot space(with rear seats folded): 1,306 litres

Porsche Panamera 4S E-Hybrid

Price: £101,690 

Engine: 2.9 litre V6 twin-turbo petrol engine & electric motor

Total power: 560 horse-power (PS)

Transmission: eight-speed dual clutch automatic

0-62mph: 3.7 seconds

0-100mph: 8.6 seconds

0-124mph: 13.6 seconds.

Top speed: 185mph

Electric top speed: 87mph

All-electric range: Up to 34 miles (up 30 per cent)

Battery charging time: 2.6 hours to 4.8 hours

Fuel economy: 94.2 to 128.4mpg

CO2 emissions: 51g/km to 67g/km

Unladen weight: 2,300kg

Fuel tank: 80 litres

Boot space: 403 litres

Boot space (with rear seats folded): 1,242 litres

SAVE MONEY ON MOTORING

Powered by: Daily Mail

Continue Reading

Business

Aside from Covid-19, what lies ahead for British pharma firms?

Published

on

By

aside from covid 19 what lies ahead for british pharma firms

This pandemic has been much worse for the elderly, who have borne the overwhelming brunt of the deaths. 

But one sector that leans heavily on pensioner pounds is doing noticeably well this year – pharmaceuticals, and it not just because of Covid.

Share prices of many British pharmaceutical firms have grown strongly despite a stock market-wide March dip as worldwide worries over the economy were superseded by public health threats.

Since 1 January , the share price of the country’s largest pharma business AstraZeneca have risen 14 per cent in value, while Vectura’s have jumped by around double that amount, and FTSE 100 firm Hikma has climbed by a third.

AstraZeneca and GlaxoSmithKline are both working to manufacture vaccines to treat Covid-19

AstraZeneca and GlaxoSmithKline are both working to manufacture vaccines to treat Covid-19

GlaxoSmithKline (GSK) has been an outlier among British pharma firms with a 14 per cent decline in its share price since 1 January, although this is still some way above its March low.

Amidst smaller firms, some have had an even better run in 2020. Both London-listed Amryt Pharma and Guildford-based Ergomed have seen shares rise 74 per cent.

Each of them invests copiously in orphan drugs research, which is becoming a highly lucrative market. 

An orphan drug is defined as one intended for the treatment, prevention or diagnosis of a rare disease or condition.

According to one 2016 analysis of 86 publicly-listed pharmaceutical companies by two academics from Liverpool and Bangor universities, orphan drug producers had a 9.6 per cent greater return on investment than non-orphan drug makers.

Ergomed executive chairman: 'Our PrimeVigilance services have been essential in recent times, partly due to an increase in adverse event reporting as a result of the pandemic'

Ergomed executive chairman: ‘Our PrimeVigilance services have been essential in recent times, partly due to an increase in adverse event reporting as a result of the pandemic’

Amryt’s chief executive and founder Joe Wiley says his business’s acquisition of two marketed rare disease products – Lojuxta and Myalept – last year ‘transformed our company overnight.’

‘We quickly integrated these products into our existing business, and since the start of the year we have been consistently growing revenues quarter-on-quarter, and we moved into EBITDA profitability ahead of schedule and the market’s expectations.’

He also believes Amryt has ‘broken the mould’ of tradition biotech firms by gaining strong revenues and profits, a sentiment shared by Ergomed’s boss Dr Miroslav Reljanović, whose firm reported a 15 per cent rise in first-half revenues back in July.

Both companies state that Covid-19 has given them a further boost. Wiley says his company moved quickly to a work-from-home model and had a robust supply chain and inventory when the pandemic hit.

For Dr Reljanovic, it is the ‘essential’ nature of Ergomed’s research and drug safety services that has made it a crucial business during this unusual time.

‘We act as an essential services provider to larger pharmaceutical firms, as evidenced by our ability to orchestrate complex clinical trials (e.g. for Covid-19 patients) with a rapid turnaround time.

‘Our PrimeVigilance services have been essential in recent times, partly due to an increase in adverse event reporting as a result of the pandemic, and partly through the establishment of safety services to support Covid-related clinical trials.’

Another company, 4D Pharma, is running a trial giving an oral drug to hospitalised coronavirus patients, although whether this has boosted its share price is disputable.

Ergomed's executive chairman t is the 'essential' nature of Ergomed's research and drug safety services that has made it a crucial business during this unusual time

Ergomed’s executive chairman t is the ‘essential’ nature of Ergomed’s research and drug safety services that has made it a crucial business during this unusual time

AstraZeneca’s much more eminent Covid vaccine trial on the other hand, has given its share price an enormous (metaphorical) shot in the arm.

Even the announcement of a pause on clinical trials last week did little to scare investors. The FTSE 100 firm’s share price been on a long ascent in the last decade, thanks in large part to better success rates in getting new medicines to market.

By contrast, GSK had been tarnished with bribery scandals and flat turnover. Even if the company manufactures Covid treatments, it expects to not profit off them. AstraZeneca has also declared it will supply any potential Covid vaccine at no profit.

If the two firms were cities, AstraZeneca would be London, hogging most of the money and glory, while GSK would be Birmingham or Manchester – still prominent and world-famous, but dwarfed by their much bigger, richer and older sister.

AstraZeneca has declared it will supply any potential Covid vaccine at no profit

AstraZeneca has declared it will supply any potential Covid vaccine at no profit

So, what about the rest of the British pharma sector? According to consulting firm GlobalData’s Pharma Intelligence Center Drugs Database, there are 235 known private independent pipeline-only Bio/Pharma companies headquartered in Britain.

Peter Shapiro, the senior director of Drugs and Business Fundamentals at GlobalData, says: ‘It is hard to generalise about these smaller Pharma companies as they are quite diverse, spanning every major molecule type and therapeutic area.’

GSK and AstraZeneca though ‘both have blockbuster drugs and diversified, innovative therapeutic pipelines. Their pipelines include Covid-19 vaccines or collaborations, and they have made significant investments in advanced therapy medicinal products, especially in the growing field of Immuno-Oncology (IO).’

But whatever the size of each pharma business, one long-term trend should give the wider industry a considerable boost in confidence – the world is getting older.

GSK's share price has been hurt in the last decade as bribery scandals and flat turnover beset the Brentford-based company

GSK’s share price has been hurt in the last decade as bribery scandals and flat turnover beset the Brentford-based company

This year 2020 is the first time in human history that the number of over-65s outnumbers those under five. The Office for National Statistics projects that one in four Britons in 2050 will be 65 or older.

China and India, the world’s two largest countries by population, have seen women’s fertility rates plummet as they have grown richer, while the Asian tiger economies have already had below-replacement birth rates for decades.

As journalist Camilla Cavendish writes in her book Extra Time: 10 Lessons for an Ageing World: ‘The twenty-first century will be defined by people living longer, in societies which are growing older much faster than we have fully realised.’

Health spending is also disproportionately concentrated on the elderly. The Institute for Fiscal Studies (IFS) estimates that 65-year olds cost the NHS two and a half times more than a 30-year old, but 85-year olds cost five times as much.

The year 2020 will be the first time in human history that the number of over-65s outnumbers those under five. About one in four Britons in 2050 will be 65 or older as well

The year 2020 will be the first time in human history that the number of over-65s outnumbers those under five. About one in four Britons in 2050 will be 65 or older as well

And just to throw in an extra secret sauce, the world is getting fatter, putting people at greater risk of diabetes, heart disease, depression, and other medical problems.

Put it all together, and pharmaceutical firms are set for a golden century. Surely nothing could throw a spanner in the works? Well, the industry has one major worry on its immediate horizon – the threat of a hard Brexit.

A parliamentary report on the sector published two years ago warned that ‘any small gains [from Brexit] would be hugely outweighed by additional costs or the loss of access to existing successful markets.’

It added that the ‘potential for new, untapped markets simply does not exist in an already global sector in which the UK is highly engaged.’

The report called on the UK to have a close relationship with the EU, with medicines able to travel across borders with as little hassle as possible, something that could be severely affected if the two parties end up trading on WTO terms.

A parliamentary report on the pharma industry said 'any small gains [from Brexit] would be hugely outweighed by additional costs or the loss of access to existing successful markets'

A parliamentary report on the pharma industry said ‘any small gains [from Brexit] would be hugely outweighed by additional costs or the loss of access to existing successful markets’

CMC Market analyst David Madden believes such a scenario will hurt pharma stocks across the board, though he thinks GSK and AstraZeneca may not be as badly impacted.

He says because their overseas earning are proportionally higher, a fall in the pound’s value will not hurt them as much and that ‘big pharma players like GSK are more likely to produce a Covid-19 vaccine so that will be on traders’ minds too.’

GlobalData’s Peter Shapiro says the major pharma firms have also been extensively preparing for a hard Brexit. However, the potential regulatory dealignment between Britain and the European Medicines Agency (EMA) remains a significant worry in the industry.  

Powered by: Daily Mail

Continue Reading

Trending

Copyright © 2020 DiazHub.