Aspen’s conduct hard to swallow
The earnings growth projected by the company is unlikely to materialise as the drug pricing scandal grows
It takes 20 years for a company to build a reputation and five minutes to ruin it, business magnate Warren Buffett once warned. If not ruined entirely, the reputation of international generic pharmaceutical giant Aspen has suffered untold damage. And it’s damage all of its own making. It is hard to imagine how any headline could be more detrimental than the one The Times of London used for a story on Aspen on April 14: "Drug firm plots to destroy life-saving cancer drugs in bid to drive up prices." It was a headline that media (formal and social) locked onto. The drugs in question are known as the Cosmos portfolio, for which Aspen bought the rights from GlaxoSmithKline (GSK) for £273m in 2009. The portfolio encompasses Mercaptopurine, used to treat acute lymphoblastic leukaemia, a disease confined to children, Busulfan and Chlorambucil, for treating leukaemia, and drugs for cancer that occurs primarily among the elderly. According to Aspen, the Cosmos portfolio produced revenue of €...
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