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S&P: Europe's Pharmaceutical Firms Buck The Recession With Strong Sales Growth In 2009, Says Report

Europe's Pharmaceutical Firms Buck The Recession With Strong Sales Growth In 2009, Says Report

FRANKFURT, June 18, 2009--European pharmaceutical companies sales grew strongly in the first part of 2009 and their operating performance is likely to stay strong throughout the year, says Standard & Poor's Ratings Services today in its "Europe's Recession-Resistant Pharmaceutical Companies Are Still Growing In 2009."

Rated pharmaceutical firms recorded like-for-like organic sales up 5.3% on average in the first quarter of 2009 on the same period of last year.

"The sector appears to be barely scathed by the economic recession, primarily because medicines in developed markets are mostly financed by health insurance schemes and their market prospects are swelled by growing populations with increasingly unhealthy lifestyles," said Standard & Poor's credit analyst Olaf Toelke.

What's more, the large pharmaceutical companies will in our view continue to be buoyed over the next few years by their strength in emerging markets, compensating for more sluggish growth in the large U.S. market. Manufacturers such as Bayer AG (A-/Negative/A-2), sanofi-aventis S.A. (AA-/Stable/A-1+), or AstraZeneca PLC (AA-/Stable/A-1+) have strong positions in emerging markets, explained partly by their early entry to those markets and partly by their geographic proximity.

European manufacturers also benefit from promising late-stage pipelines for patented drugs.

Standard & Poor's therefore expects their credit quality to remain stable through 2009, reflecting these strong operating trends, the report says.

"Nevertheless, we see a heightened risk that companies could adopt more aggressive financial policies, which could potentially result in negative rating actions," said Mr. Toelke. This is supported by the recent focus on mergers and acquisitions by large pharmaceutical companies in the U.S.

Among the 13 European pharmaceutical and health-care companies rated by Standard & Poor's, credit quality has been generally stable over the past year and in the first quarter of 2009, the report states.

The report is available to RatingsDirect subscribers at If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to Ratings information can also be found on Standard & Poor's public Web site at; select Ratings in the left navigation bar, then Find a Rating. Alternatively, call one of the following Standard & Poor's numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440-5914; or Moscow (7) 495-783-4011.



Media Contact:

David Wargin, New York (1) 212.438.1579,


Analyst Contacts:

Olaf Toelke, Frankfurt (49) 69.33.999.125

Marketa Horkova, London (44) 20.7176.3743

Christian Wenk, London (44) 20.7176.3511

Industrial Ratings Europe

Posted: June 2009