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Ailing pigs could be boost for SA pharma industry

sappo-pharma

By Penelope Mashego

The outbreak of African swine fever that continues to ravage pig populations in China, parts of Europe and Africa has had an unexpected casualty: blood-thinning medication.

A key ingredient for the blood-thinning medication Heparin is pig mucosa, which is found in the intestines of pigs. The medications is used for heart surgery, dialysis and to treat deep-vein thrombosis. With China, which farms more than 50% of the world’s pigs, having to cull large numbers to contain the African swine fever outbreak, the cost of this medication is expected to rise.

For SA’s biggest pharmaceutical company, JSE-listed Aspen, whose core business includes Heparin, this could present an opportunity to gain market share.

Analysts say the company could gain market share because its supply chain is not in China. Germany and France are the European manufactures of Aspen’s Heparin and both countries are free of African swine fever, according to the latest World Organisation for Animal Healthy update.

And though Aspen has built a more than 12-month stockpile ahead of expected Heparin price increases where are worries that pharmaceutical companies’ margins will be under pressure as Heparin becomes scarce.

“There is also the possibility that Arixtra (a blood-clot prevention drug) may take market share if porcine-based products are unavailable, suggesting Aspen could even benefit in an extreme scenario,” they said.

Aspen strategic trade and development executive Stavros Nicolaou is confident, saying: “Aspen anticipated the Heparin shortage and built up stock levels in our last half-year reporting period.”

He said though this had an impact on the company’s working capital in the second quarter, it was a good decision.

“It’s proven to be a commercially sound decision as it will ensure Aspen can sustainably supply its Heparin-based products to patients,” he said.

(Article shortened)

Sunday Times 5 May 2019

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