07.27.07
$2.6 Billion
Key Executives:
Christopher B. Begley, CEO
Terrence C. Kearney, COO
Thomas E. Werner, Sr. VP, Finance, and CFO
Edward A. Ogunro, Ph.D, Sr. VP, R&D, Medical Affairs, and Chief Scientific Officer
Brian J. Smith, Sr. VP, General Counsel and Secretary
No. of Employees: 15,000
World Headquarters: Lake Forest, IL
According to the company’s Web site, Hospira’s name, which was chosen by its employees, was derived from the words hospital, spirit, inspire and the Latin word spero, which means hope. And the company’s upward climb during the past couple of years shows that hope—and dedication to achieving long-term goals—has paid off.
Since its spinoff from Abbott Laboratories in 2004, the company has focused on a strategy of investing for growth and improving margins and cash flow. While Hospira had some ups and downs during 2006—with somewhat flat numbers for the first three quarters of the year—the company achieved an upswing in the fourth quarter (ended Dec. 31) with a 9.3% increase compared with the same quarter in 2005. In addition, that quarter had a nearly 80% boost in profit as net income jumped from $26.6 million in fourth-quarter 2005 to $47.4 million in the same period of 2006.
Overall net sales in 2006 grew 2.4% to $2.69 billion (compared to $2.63 billion in 2005), which was better than the 0.7% decrease seen in 2005 when compared with 2004. US sales were responsible for 83% of total sales in 2006.
With the company reaching its long-term goals sooner than expected since its spinoff, Hospira’s CEO, Christopher Begley, said in the annual report that the company is now looking to set higher standards, including achieving “higher single-digit growth rates.”
The year 2006 marked a time during which the company invested in an IT infrastructure, expanded R&D initiatives and added new product pipelines. The company’s Specialty Injectable Pharmaceuticals division launched 10 new products, including several injectable generic products. While the division encountered fewer sales in 2006, having gone from $845 million in 2005 to $808 million in 2006, the company said this decrease was a result of Hospira’s 2005 termination of the Berlex imaging agent distribution agreement. When looking at the numbers excluding Berlex, the division actually increased sales, the company said.
In the Medical Management Systems division, the company estimated that last year, more than 400,000 of its electronic drug delivery pumps were in use. The division had an increase of 7.4% in 2006, totaling $855 million in net sales. (In 2005, the division only grew by 1.7%.) In this division, which includes infusion therapies and supplies, product launches included the VisIV next-generation non-PVC, non-DEHP IV container.
The company also has a contract manufacturing division, which held steady in 2006 but expects to see a slight slowdown in 2007, as several contracted products have lost or will lose patent protection this year. The decreased demand could negatively impact 2007 by about $50 million, the company said.
The manufacturer of hospital products, with 18 manufacturing plants, has been busy re-aligning its operations over the past year or so. Hospira closed its Donegal, Ireland facility late in 2006, and expects to close its Ashland, OH facility sometime this year. In addition, its Montreal, Canada facility will close in 2008, and production will be phased out of the company’s North Chicago, IL facility by 2010. In line with the planned closure of the Chicago facility, Hospira began a $60 million expansion at its McPherson, KS facility in 2006 to accommodate the activities that will be shifted there when the Chicago operations cease.
As part of its growth strategy, Hospira also has been strengthening its profile through collaborations and acquisitions. The company acquired Australia-based BresaGen Ltd. for $17.1 million in the second half of 2006. BresaGen offers Hospira a biogenerics line of pharmaceuticals, including protein and peptide manufacturing and cell line development capabilities.
In November, Hospira also formed an alliance with German-based STADA Arzneimittel AG and BIOCEUTICALS Arzneimittel AG.
A large purchase was set in motion at the end of 2006 and came to fruition in February 2007, when Hospira completed its acquisition of Australia-based Mayne Pharma Ltd. for approximately $2 billion in cash. Mayne will offer Hospira numerous oncology products, among others, to the company’s portfolio and expand the company’s presence globally, the company said. Operating under the Specialty Injectable Pharmaceuticals division, this acquisition will contribute half of the division’s sales moving forward, according to Begley. In addition, it is projected double sales outside the United States.
Thus far, 2007 is shaping up to be a good year for the company. Hospira forecast 2007 sales in the range of $3.4 billion to $3.48 billion. In a call to analysts in late February, the company said it expected sales of its infusion therapies to grow by 3% to 4%, but even more impressively, it forecasted sales of medication management systems to grow by about 20% by the end of the year.
For the first quarter of 2007, ended March 31, the company already showed signs of its newfound strength, having grown net sales 17.8% to $782.8 million compared with $664.3 in the same period in the prior year.
Product launches have been implemented to help the company achieve its goals. In April 2007, the company launched a new wireless platform for its medication infusion devices, including its Plum A+ single-channel infusion device and plans to add it to its Plum A+ 3 triple-channel device, LifeCare PCA patient-controlled analgesia system and Symbiq infusion system later this year.
“Hospira’s year is off to a good start,” Begley said. “We continued to advance the business during the quarter and remain on track with our earnings expectations for the full year. We continue to believe that 2007 will mark another year of significant progress for Hospira, as we build on the momentum we’ve created by executing our growth strategies.”
Key Executives:
Christopher B. Begley, CEO
Terrence C. Kearney, COO
Thomas E. Werner, Sr. VP, Finance, and CFO
Edward A. Ogunro, Ph.D, Sr. VP, R&D, Medical Affairs, and Chief Scientific Officer
Brian J. Smith, Sr. VP, General Counsel and Secretary
No. of Employees: 15,000
World Headquarters: Lake Forest, IL
According to the company’s Web site, Hospira’s name, which was chosen by its employees, was derived from the words hospital, spirit, inspire and the Latin word spero, which means hope. And the company’s upward climb during the past couple of years shows that hope—and dedication to achieving long-term goals—has paid off.
Since its spinoff from Abbott Laboratories in 2004, the company has focused on a strategy of investing for growth and improving margins and cash flow. While Hospira had some ups and downs during 2006—with somewhat flat numbers for the first three quarters of the year—the company achieved an upswing in the fourth quarter (ended Dec. 31) with a 9.3% increase compared with the same quarter in 2005. In addition, that quarter had a nearly 80% boost in profit as net income jumped from $26.6 million in fourth-quarter 2005 to $47.4 million in the same period of 2006.
Overall net sales in 2006 grew 2.4% to $2.69 billion (compared to $2.63 billion in 2005), which was better than the 0.7% decrease seen in 2005 when compared with 2004. US sales were responsible for 83% of total sales in 2006.
With the company reaching its long-term goals sooner than expected since its spinoff, Hospira’s CEO, Christopher Begley, said in the annual report that the company is now looking to set higher standards, including achieving “higher single-digit growth rates.”
The year 2006 marked a time during which the company invested in an IT infrastructure, expanded R&D initiatives and added new product pipelines. The company’s Specialty Injectable Pharmaceuticals division launched 10 new products, including several injectable generic products. While the division encountered fewer sales in 2006, having gone from $845 million in 2005 to $808 million in 2006, the company said this decrease was a result of Hospira’s 2005 termination of the Berlex imaging agent distribution agreement. When looking at the numbers excluding Berlex, the division actually increased sales, the company said.
In the Medical Management Systems division, the company estimated that last year, more than 400,000 of its electronic drug delivery pumps were in use. The division had an increase of 7.4% in 2006, totaling $855 million in net sales. (In 2005, the division only grew by 1.7%.) In this division, which includes infusion therapies and supplies, product launches included the VisIV next-generation non-PVC, non-DEHP IV container.
The company also has a contract manufacturing division, which held steady in 2006 but expects to see a slight slowdown in 2007, as several contracted products have lost or will lose patent protection this year. The decreased demand could negatively impact 2007 by about $50 million, the company said.
The manufacturer of hospital products, with 18 manufacturing plants, has been busy re-aligning its operations over the past year or so. Hospira closed its Donegal, Ireland facility late in 2006, and expects to close its Ashland, OH facility sometime this year. In addition, its Montreal, Canada facility will close in 2008, and production will be phased out of the company’s North Chicago, IL facility by 2010. In line with the planned closure of the Chicago facility, Hospira began a $60 million expansion at its McPherson, KS facility in 2006 to accommodate the activities that will be shifted there when the Chicago operations cease.
As part of its growth strategy, Hospira also has been strengthening its profile through collaborations and acquisitions. The company acquired Australia-based BresaGen Ltd. for $17.1 million in the second half of 2006. BresaGen offers Hospira a biogenerics line of pharmaceuticals, including protein and peptide manufacturing and cell line development capabilities.
In November, Hospira also formed an alliance with German-based STADA Arzneimittel AG and BIOCEUTICALS Arzneimittel AG.
A large purchase was set in motion at the end of 2006 and came to fruition in February 2007, when Hospira completed its acquisition of Australia-based Mayne Pharma Ltd. for approximately $2 billion in cash. Mayne will offer Hospira numerous oncology products, among others, to the company’s portfolio and expand the company’s presence globally, the company said. Operating under the Specialty Injectable Pharmaceuticals division, this acquisition will contribute half of the division’s sales moving forward, according to Begley. In addition, it is projected double sales outside the United States.
Thus far, 2007 is shaping up to be a good year for the company. Hospira forecast 2007 sales in the range of $3.4 billion to $3.48 billion. In a call to analysts in late February, the company said it expected sales of its infusion therapies to grow by 3% to 4%, but even more impressively, it forecasted sales of medication management systems to grow by about 20% by the end of the year.
For the first quarter of 2007, ended March 31, the company already showed signs of its newfound strength, having grown net sales 17.8% to $782.8 million compared with $664.3 in the same period in the prior year.
Product launches have been implemented to help the company achieve its goals. In April 2007, the company launched a new wireless platform for its medication infusion devices, including its Plum A+ single-channel infusion device and plans to add it to its Plum A+ 3 triple-channel device, LifeCare PCA patient-controlled analgesia system and Symbiq infusion system later this year.
“Hospira’s year is off to a good start,” Begley said. “We continued to advance the business during the quarter and remain on track with our earnings expectations for the full year. We continue to believe that 2007 will mark another year of significant progress for Hospira, as we build on the momentum we’ve created by executing our growth strategies.”