Times are changing for BP, and due to the oil leak in the Gulf of Mexico the company has just reported a record quarterly loss for a British company, prompting the board to decide it was time for a new chief executive and that it needed to sell off more of its assets to pay for the spill.

Despite the bad publicity the company has been receiving, its underlying performance was very positive with second quarter sales reaching $73.7 billion (£47.2 billion), a 34 per cent increase compared to its sales during the same period in 2009. But a $32.2 billion charge relating to the Gulf of Mexico spill more than wiped out its operating profits and caused the company to record a net loss for the quarter of $17.2 billion.

This has led the company to increase the scale of its asset sale programme from $10 billion to $30 billion over the next 18 months which ‘will leave the company with a smaller but higher quality exploration and production business’.

As of the start of October, Tony Hayward, the incumbent chief executive, is to be replaced by Robert Dudley an executive director at the company and former president of its TNK-BP joint venture in Russia.

‘The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident,’ said BP’s chairman Carl-Henric Svanberg.

‘BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world’s energy needs. But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board.’

PHARMACEUTICALS

Sandoz wins race to copy Lovenox

copy_cat

Novartis’s generics unit Sandoz has won the race to gain marketing approval for a copycat version of Sanofi-Aventis’s blockbuster anti-clotting drug Lovenox (enoxaparin).

Sales of the drug brought in $2.7 billion for Sanofi in 2009, but now that Sandoz and its collaborator Momenta have gained approval for their rival drug, those figures are bound to slump.

‘The approval of M-Enoxaparin marks a key milestone for Momenta, and we are extremely pleased,’ said Craig Wheeler, Momenta’s chief executive. ‘This is the first product based on Momenta’s technology platform to be approved, and demonstrates our ability to characterise and develop a complex mixture drug like Lovenox.’

Novartis is obviously unhappy at losing such a valuable source of revenue and has said it has ‘reservations’ about the approval of such a ‘complex biological product’, and was considering its legal options.

Meanwhile, Israeli generics giant Teva has said that it believes its copycat version should also be approved, saying that ‘Teva believes that it has demonstrated to the US Food and Drug Administration (FDA) that its version of generic Lovenox meets their criteria’.

Teva’s generics sales soar

Teva, the world’s largest maker of generic drugs, has said that its quarterly sales for the 3 months ending 30 June 2010, have increased 12 per cent to $3.8 billion compared to the same period in 2009. A 10 per cent increase in European sales and a 13 per cent increase in sales of its market leading multiple sclerosis therapy Copaxone (glatiramer acetate) buoyed the results and pushed operating profits at the company up 22 per cent to $1.2 billion

‘This was truly a superb quarter, in which Teva achieved record-breaking results, including outstanding organic growth,’ said Shlomo Yanai, Teva’s chief executive.

‘It was an especially strong quarter in North America, where we had nine new product launches, and in Europe, where we experienced solid growth despite the challenging market environment.’

Vultures circle Genzyme?

Despite having announced that its second quarter revenues had fallen 12 per cent to $1.08 billion, Genzyme’s share price has risen around 30 per cent to hit a high of over $67.51 a share after speculation that either Sanofi-Aventis or GlaxoSmithKline were lining up a bid for the company.

The drop in revenues can be largely attributed to the company’s manufacturing problems that have left the company unable to meet demand for a number of its key drugs such as Cerezyme (imiglucerase) and Fabrazyme (agalsidase beta). The loss of those sales almost wiped-out Genzyme’s operating profits which fell almost 95 per cent to $12 million – down from $240 million in the same period of 2009.

‘This was a difficult quarter as reflected in our financial results, but based on the progress we’ve made with our recovery efforts, the outlook for the second half of 2010 is promising,’ said Henri Termeer, Genzyme’s chief executive. ‘We are encouraged by the improvements in Cerezyme and Fabrazyme manufacturing. We expect that increasing sales of these products combined with reductions in our operating costs will produce an increase in earnings during the second half of the year.’

INDUSTRY

DuPont rockets to recovery

US chemicals giant DuPont has seen its second quarter sales hit $8.6 billion – an increase of 26 per cent compared to the same period in 2009. The increased sales volumes and higher selling prices led to a 52 per cent increase in operating profits which reached $1.6 billion.

dupont

Sales from its electronics and communications division more than doubled during the quarter to reach $700 million, while sales from its performance materials unit increased 45 per cent to reach $1.6 billion.

‘Our outstanding focus and disciplined execution delivered excellent results,’ said Ellen Kullman, DuPont’s chief executive. ‘DuPont’s global team worked closely with customers, applying the breadth and depth of our science capabilities to meet market needs. We grew sales across every segment. Several businesses, including electronics and titanium dioxide, delivered results that far exceeded pre-recession levels.’

Reliance roars ahead

India’s largest privately held company, Reliance Industries, has smashed its quarterly earnings results bringing INR610 billion (£8.4 billion) during the first quarter of the 2011 financial year – an increase of 88 per cent compared to the first quarter of last year. The increased sales, which were driven by increased volumes and higher selling prices, led to a 42 per cent increase in operating profits which reached INR101 billion.

The company’s petrochemicals business recorded a 19 per cent increase in sales, which reached INR139 billion. The division had made an offer to buy Dutch chemical company LyondellBasell which emerged from bankruptcy at the end of April.

‘We had yet another record quarter due to high operating rates and improving margins across all our businesses,’ said Mukesh Ambani, Reliance’s managing director.

Praxair floats higher

praxair

US-based industrial and speciality gas supplier Praxair has seen its second quarter sales increase 18 per cent to $2.5 billion compared to the same period in 2009. While demand grew in all geographic regions, the company said that growth was strongest in South America and Asia, with demand growing most strongly for customers in the chemicals, metals and electronics arenas. Operating profits grew 22 per cent to $547 million.

‘The global economic environment continued to improve this quarter, with South America and Asia showing the strongest recovery,’ said Steve Angel, the company’s chief executive, who continued by saying the company expects ‘volume growth to continue in the second half of 2010, perhaps at a more modest pace’.

Matt Wilkinson

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