egolinews.com

Sigma Pharmaceuticals Limited (SIP) confirmed the party that tabled a $707 million takeover offer last Friday was Aspen Pharmacare Holdings Limited.

The offer from the South African based pharmaceutical manufacturer was for all of the shares in Sigma for 60c each.

Sigma shares were trading at 35c prior to the announcement before closing at 48c at the close of trade Friday.

Sigma said its board is considering the proposal and recommends that shareholders take no action at this stage.

Sonic Healthcare Limited (SHL) shares slumped Friday morning after the company said last night that it was likely to fall short of full-year guidance due to an unexpected and temporary impact on Australian pathology revenues. The company said the revenue shortfall follows from Government cuts to Australian Medicare fees for pathology services, effective 1 November last year.

Sonic also attributed the impact on revenue to the introduction of distinctive new billing arrangements in Sonic’s Queensland operations, which resulted in loss of market share and a fall in growth rates in Australian pathology market volumes since the introduction of the Medicare fee cuts.

The company said a contributing factor to its current position is the lower than expected revenue growth of its Australian radiology division.

CEO, Dr Colin Goldschmidt, said the issues impacting full-year guidance are confined to Sonic’s Australian operations only and reflect industry destabilisation flowing from Government interventions in billing arrangements.

“These are short-term external influences and do not reflect on the sound fundamentals of our operations,” Dr Goldschmidt said.

Dr Goldschmidt said Sonic’s European and USA operations continue to perform strongly and to expectation.

The company forecast net profit for FY10 to be in the range of $290-295 million.

Sonic said excluding future business acquisitions and on a constant FY10 currency basis, it expects net earnings growth of 10-15% would be achieved for FY11.

As at 1140 AEST, Sonic shares were down $2.52, or 20% to $10.10.

Sonic Healthcare Limited (SHL) shares slumped Friday morning after the company said last night that it was likely to fall short of full-year guidance due to an unexpected and temporary impact on Australian pathology revenues. The company said the revenue shortfall follows from Government cuts to Australian Medicare fees for pathology services, effective 1 November last year.

Sonic also attributed the impact on revenue to the introduction of distinctive new billing arrangements in Sonic’s Queensland operations, which resulted in loss of market share and a fall in growth rates in Australian pathology market volumes since the introduction of the Medicare fee cuts.

The company said a contributing factor to its current position is the lower than expected revenue growth of its Australian radiology division.

CEO, Dr Colin Goldschmidt, said the issues impacting full-year guidance are confined to Sonic’s Australian operations only and reflect industry destabilisation flowing from Government interventions in billing arrangements.

“These are short-term external influences and do not reflect on the sound fundamentals of our operations,” Dr Goldschmidt said.

Dr Goldschmidt said Sonic’s European and USA operations continue to perform strongly and to expectation.

The company forecast net profit for FY10 to be in the range of $290-295 million.

Sonic said excluding future business acquisitions and on a constant FY10 currency basis, it expects net earnings growth of 10-15% would be achieved for FY11.

As at 1140 AEST, Sonic shares were down $2.52, or 20% to $10.10.

Sigma Pharmaceuticals Limited (SIP) confirmed it has received a non-binding, indicative and conditional proposal to acquire all of the issued share capital of Sigma for 60c per share. The company said its board is considering the proposal and recommends that shareholders take no action at this stage.

Sigma shares were trading at 35c at the close of trade yesterday.

In the past five weeks the company has announced the resignations of its CEO and managing director Elmo De Alwis, as well as chief financial officer Mark Smith. Just yesterday chairman Dr John Stocker and non-executive director Mr Doug Curlewis announced their retirements from the board.

All of this was in the aftermath of Sigma reporting a $389 million net loss for the financial year ended 31 January 2010.

The results compared with profit of $80.1 million a year earlier, and included a non-cash impairment charge of $424.2 million to the group’s goodwill following a review of intangible carrying values.

As a consequence, the company is facing asset fire sales to reduce debt.

Sigma Pharmaceuticals Limited (SIP) announced the retirements of chairman Dr John Stocker and non-executive director Mr Doug Curlewis from the board effective from the conclusion of the AGM on June 21. The company said, in its annual report, it expects to improve cash flow and reduce debt in FY11.

Sigma said Brian Jamieson would be replacing Dr Stocker as chairman.

Mr Jamieson was appointed a director of Sigma Company Limited in May 2003 and Sigma Pharmaceuticals Limited in December 2005.

The company said Mr Jamieson is also a director of Oz Minerals Limited, Tatts Group Limited, and non-executive chairman of Mesoblast Limited.

Sigma recently announced the resignations of its chief executive and chief financial officer in the wake of reporting a $389 million net loss for the financial year ended 31 January 2010. The result included goodwill impairment of $424 million and other non-recurring items of $52 million.

”This result was impacted by lower participation in the company’s year-end promotional sales activity, which also led to an increase in working capital due to higher inventory,” the company said.

Looking ahead, Sigma said today that it is confident of the continued sound operations and underlying profitability of the company.

The company expects to improve cash flow and reduce debt through renegotiation of agreements with customers currently receiving extended trading terms, improvements in inventory levels and rationalisation and sale of non-core assets.

As at 1133 AEST, Sigma shares were unchanged at 35c.

Healthscope Limited (HSP) said that it had received an upgraded offer from the same private equity firm that made a $5.50 per share offer for Healthscope last week. The hospital operator said it gave the private equity firm the opportunity to upgrade the offer, which is now $5.75 per share, valuing the company at $1.82 billion.

Last week, the private equity firm was rumoured to be a JV between TPG and Carlyle Group.

In the market update, Healthscope said the company was performing well.

”Healthscope has delivered compound annual growth in total shareholder returns of 36% over the past 10 years, and the board believes that the company is well positioned to continue to deliver strong growth," the company said.

In the near-term Healthscope said that growth would come from the addition of new beds and theatres at existing hospitals, while de-regulation of the pathology industry had also opened up opportunities.

”Longer term growth is expected from the construction of new, large and very efficient hospitals,”’ Healthscope said.

The company said it was considering the revised offer, and said that shareholders should take no action.

Healthscope shares were halted at $5.18.

Healthscope Limited (HSP) said it has received an offer to acquire all of the company’s shares by scheme of arrangement from a private consortium for $5.50 each. The offer values the hospital, pathology laboratory, and collection centre operator at $1.74 billion.

Healthscope said it received the indicative, non-binding and confidential proposal after the close of trade yesterday.

The company recommended shareholders take no action, with further announcements to be made in due course.

At the close of trade Thursday, Healthscope shares were trading at $4.50.

ResMed Inc. (RMD) said revenue for the March quarter was US$278.7 million, a 22% increase over the previous corresponding period. The company said income from operations was US$61.2 million and net income was US$48.8 million, an increase of 16% and 25%, respectively, compared to the pcp.

The healthcare company reported a 24% increased in diluted earnings per share for the quarter to US63c.

ResMed said Selling, General and Administrative Expenses rose 19% to US$84.1 million for the quarter compared to the pcp due to the depreciation of the US dollar against international currencies and “expenses necessary to support sales growth”.

Meanwhile, Research And Development expenses increases 32% in the same period to US$18.3 million.

The company said R&D expenses were negatively impacted by the depreciation of the US dollar against international currencies, particularly the Australian dollar.

Looking at the nine months to 31 March 2010, ResMed said revenue rose 20% to US$800.8 million, while income from operations and net income were US$171.8 million and US$136.9 million, an increase of 30% and 35%, respectively on the pcp.

President and CEO, Kieran T. Gallahue, said the company continued to show strong growth year-over-year in the Americas, as well as in Europe and Asia/Pacific during the quarter.

“Our favourable mix of product sales and market share gains led to a 20% increase in the Americas over the prior year’s quarter, resulting in US$146.8 million in revenue,” Mr Gallahue said.

“Sales outside the Americas increased by 25% to US$131.9 million over the prior year’s quarter, or a 16% increase on a constant currency basis.”

As at 1019 AEDT, ResMed shares were up 30c to $6.99.

Australian Pharmaceutical Industries Limited (API) reported a 54.5% rise in first half net profit. The $10.3 million profit was on the back of a 6.7% rise in sales to $1.85 billion.

API said earnings per share rose 13% to 2.6c, while the board declared a fully franked interim dividend of 1c per share.

Managing director and CEO, Stephen Roche, said at the same time as improving revenue and profit figures the company continued to invest for the future in its successful Priceline brand and the transformation of its supply chain through Revitalise.

“In a period which saw declining consumer confidence and spending, retail store sales for Priceline are up 5.3%,” Mr Roche said.

“The pharmacy division has recorded sales growth of 7.4% and EBIT growth of 8.7%.”

Mr Roche said the roll-out of Revitalise continues to be implemented and is on track to meet planned efficiencies and cost savings in 2011/2012.

The company reaffirmed guidance of $24.6 million for the full year, adding that key include no material changes to the regulatory environment and no further reduction in consumer demand.

As at 1029 AEST, API shares were up 0.5c to 58.5c.

CSL Limited (CSL) shares opened over 8% lower Friday after Baxter International cut its full-year forecast due to slowing sales in its biosciences division. Baxter shares closed 13.3% lower in New York this morning AEST.

The largest producer of plasma medicines in the US said it had overestimated strength in the market.

As a result, the second and third largest producers in the country, CSL and Talecris have seen their shares tumble, with Talecris closing 9.9% in the red.

Baxter chairman and CEO, Robert L. Parkinson Jr., said the company's previous short-term forecasts for the plasma-based medical products segment were "overly optimistic."

Baxter cut its forecast by US28c per share.

As at 1027 AEST, CSL shares were down $3.10 to $33.50.