By Tom Winnifrith | Sunday 7 January 2018
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
The Mail on Sunday headline says it all " Brexit fears are diverting cash from vital cancer battle say drug firms." That sod Boris Johnson and the witch Priti Patel - now they are causing more cancer patients to die. Bastards! Er....
The Remoaning Mail on Sunday just wont let the facts get in the way of a spot of Brexit bashing. GlaxoSmithKline (GSK) President of Global Affairs Simon Thompson told a committee of MPs - too idle to ask him tough questions on hard numbers, that his company had more than 1700 products that would be affected by Brexit and that Glaxo had set aside £70 million to prepare for new testing and regulation systems and updating every drugs pack. It gets worse with the glorified PR man stating:
"Obviously that money could be put behind clinical trials. I can tell youwe have a cancer portfolio we are trying to invest in, into whiich that money should be going, to develop the next generation of cancer medicines. That is something we are wrestling with internally."
Really Mr Remoaniac? I* put it to you that you are lying, that MP's and the piss poor Mail on Sunday lap up your lies without looking at hard numbers. The £70 million is a cost that will be amortised over the useful life of a drug, i.e it is not a one year hit but will be spread over many years in terms of the P&L. £71 million may sound like a big number but to Glaxo it is peanuts.
In the 3rd quarter of this year just gone ( i.e. just three months) sales were £8,7 billion. So £70 million equates to the sales this company generates every 18 hours.
Ok sales are vanity. What about free cashflows after all expenses (including R&D). In the first nine months of 2107 they totalled £1.66 billion which suggests that this £70 million hit is not going to break the bank. But perhaps Glaxo is generating that much cash because it has - as its PR man suggests - cut back on researching cures for cancer in order to pay the Brexit tab. Er... no. R&D spend in the third quarter alone was £1.047 billion an INCREASE of more than 14%. . So is that annual R&D budget of £4.5 billion really being hurt by that £71 million (*potential) Brexit bill?
Er... no: this is just another remoaniac lie. But what does Glaxo's half witted PR chap, think his company gains by telling us all such obvious porkies?
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