Bank Hapoalim estimates that the third-quarter report due on Tuesday from the Agis drug company will show a retreat on all fronts compared with the corresponding quarter of 2000.
In her research update, analyst Rakefet Levison predicts roughly zero profits and weaker revenues, because of eroding prices in the domestic market. Also, from August Agis temporarily stopped marketing in Israel of Lipogis, a drug based on a Bayer's Baycol medication, in compliance with a Health Ministry directive. In its second-quarter report, Agis predicted that the halt would cost it NIS 7 million operating income a year.
Lipogis is used to lower blood cholsterol. It was taken off shelves in the United States and Europe too after being linked with patient deaths, in rare cases, due to the breakdown of muscular tissue when high dosages were taken.
Another problem for Agis is that the September 11 attacks on the U.S. probably hurt sales of its subsidiary Clay Park, Levison writes. Apropos of which, she assesses that the Clay Park facility will weather the repeat U.S. Food & Drug Administration inspection, which should lead to FDA approval for two Agis products in the United States.
She also sees the surging euro hurting profits as financing costs rise and so does the price of raw materials from Europe, while selling prices in Israel remain stable. R&D costs are also rising, she says, further hurting operating income.
In conclusion, Levison predicts that Agis will begin to show growth only in 2003.