Johannesburg - South African drug maker
Adcock Ingram Holdings [JSE:AIP] suffered a sharp drop in its share of a lucrative government HIV/AIDS drug supply contract, company figures showed on Tuesday, sending its share price down more than 5%.
The nation's second-biggest drug maker said it would supply R166.5m worth of drugs under a two-year contract awarded by the government, or just 4% of the total, compared with a share of 21% under the previous deal.
The company had hoped its Zidovudine and Efavirenz treatments would win at least 25% of the new contract, but gave no reason for the shortfall.
"It's not disaster for them ... ARV (antiretroviral treatments for HIV/AIDS) is not the bulk of their business but it is disappointing," Michael Canterbury, an analyst at Sanlam Investment Management, said.
Shares in Adcock fell as much as 5.1% to R58.51, putting the stock on course for its biggest one-day decline since November 2008.
In morning trade the stock was trading 4.3% lower, lagging behind its closest domestic rival
Aspen Pharmacare Holdings [JSE:APN], which gained 2.3%.
Aspen, Africa's biggest generic drug maker, said it won about 40% of the value of the tender, also below the more than 50% it won in previous tender.
Aspen drugs that will be supplied to state-run hospitals under the contract include Efavirenz, Nevirapine, Abacavir and Tinofovir.
South Africa, which has one of the world's heaviest HIV/AIDS caseloads, also has one of the world's largest treatment programmes.
Adcock said the tender, which runs from January 1, 2011 to December 31, 2012, would need manufacturers to produce 116.9 million units of tablets, capsules and liquid preparations.
The Health Department is due to announce the full results of the tender later in the day.
Aspen said its range of ARVs are produced at its manufacturing facilities in Port Elizabeth.
The group said it had invested more than R2bn over the last five years in extending its manufacturing capability and enhancing the existing facilities.
Aspen group chief executive,
Stephen Saad said: "These tender results confirm Aspen's cost competitiveness and its credibility as a reliable supplier of pharmaceutical products."