UK OTC Medicine News

US OTC Medicine News

A spoonful of hormones makes the crime rate go down

May 29th, 2010

Helen Rumbelow – The availability of the morning-after pill is bound to reduce births of unwanted and potentially criminal children.

The morning-after pill: what a lifesaver! At least that’s what some Conservative politicians may be thinking as they recover from the excitement of the Queen’s Speech. I’m not talking about the need for emergency contraception in the new coalition Parliament — although these are truly heady times — but the role of abortion in cutting crime.

We have just heard that abortion rates have started to fall in the UK, countering a trend that’s been on the up for decades. That should be a good thing, right? Well of course, unless you, as any good free-market economist, are well versed in the theory that the abortion rate and the crime rate are linked.

Abortion, so the theory goes, disposes of the criminals of the future. A child that is truly yearned for has more chance of being nurtured into a good citizen. By contrast, an unwanted baby joins a band of feral thieves as featured in the musical Oliver!, who when they question Fagin about their career options are told to “shut up and drink your gin”.

This idea was naturally a little controversial when it was expounded by the American economist Steven Levitt in the bestseller Freakonomics a few years ago. Yet although it has been heavily criticised, Levitt still stands by his analysis, which forges a direct link between abortions and teenage criminal offences a decade or so later.

No one has done the maths in Britain, but our rising abortion rate and falling crime rate have crossed on a graph throughout the 1990s. New Labour, in trumpeting the success of its “tough on crime, tough on the causes of crime” policies, may not have included “a roaring trade at the termination clinic”, but is likely to have benefited enormously from it all the same.

So could this new dip in the abortion rate mean that, a decade or so from now, a generation of teenage thugs will be tearfully telling their probation officers that “my mother never loved me”? It’s a nightmarish idea for the incoming government.

But we are fortunate to have a more secular approach to abortion here. It wasn’t an issue in our election debates, but in America it is the dreariest of all their political bugbears. While the American hit comedy series Glee has millions of teenage fans in Britain, they will find one of its central storylines strange. Quinn, the teenage cheerleader, gets pregnant, but never considers either emergency contraception or an abortion. Or, indeed, raising the damn thing. Instead Quinn is forced into the American screen’s standard but statistically unlikely cop-out — see Juno and many like it — of giving her baby up for adoption.

In Britain emergency contraception has been booming ever since it was made available to buy over the counter in 2001 — five years ahead of America. Sure, you have to endure the pharmacists’ pantomime of privacy, in which they furrow their brow in order to transform a high street shop till into the appropriate place to discuss your unwanted dandruff/piles/fast-dividing clump of cells trying to root in your abdomen.

But if British abortions are on the wane because of the success of the morning-after pill, then — for the Levitt disciples, anyway — crime statistics will be unaffected.

This week the NHS watchdog NICE recommended that emergency contraception should be made even more freely available, with women allowed to stock up their medicine cabinets with the drug. I expect that policy will be fast-tracked by the new health minister. Just a guess.

Mariella frostrup claimed yesterday that the reason there aren’t “more women on the Today programme is because they’re a bunch of misogynists.” I disagree.

It’s not women they have a problem with, it’s modernity. The flagship Radio 4 programme casts for those who repel 21st-century life. Candidates must prove that they can “guffaw” or “chuckle” at a bad weather joke. They have to pass a test showing they can proffer a judicious use of the word “indeed”.

You can, like Sarah Montague, be female, as long as you sound as though you were laced into your corset when the poorer classes still kept their filthiness hidden from the ladies. To hear them, yesterday morning, attempt to enunciate the names in story of the return of the abducted twins “Vixen Rae and Billy Blue” was like hearing Lady Bracknell elocute the voiceover to Big Brother.

AstraZeneca awaits drug D-days

May 24th, 2010

Shareholders in AstraZeneca may feel as if they’re stuck in the waiting room. That is because, within months, backers of the second-biggest drugs company in Britain will learn of two decisions that are set to have a big bearing on its near-term health.

First, in June or July, a Delaware court will rule whether AstraZeneca can block low-cost competition to Crestor, the cholesterol-lowering remedy that is set to become its biggest-selling medicine this year. The stakes are high. If the company is able to protect its US patent, it is thought unlikely that the Food and Drug Administration (FDA) will approve rival treatments until 2016.

If not, it faces the loss of annual US Crestor sales that are expected to reach $4 billion (£2.6 billion) by the middle of this decade.

Second, in July or August, the FDA will deliver its judgment on Brilinta, AstraZeneca’s blood-thinning pill for preventing heart attacks and strokes. Trials have shown Brilinta to be more effective than Plavix — the world’s second-biggest-selling drug, made by Bristol-Myers Squibb and Sanofi-Aventis — raising hopes that US regulatory approval will make it a multibillion blockbuster. The twist is that trial results on US patients, who formed a small proportion of AstraZeneca’s study, were not as strong as they were for the whole group — a potentially significant obstacle given the FDA’s tendency to place greater weight on US data.

All of which threatens to render yesterday’s first-quarter results of rather incidental interest, but that is not to play down their strength. At $8.58 billion, up 11 per cent, quarterly revenues rose at their fastest pace for three years. Earnings per share, up 23 per cent to $2.03, also beat forecasts. Some of AstraZeneca’s big sellers are showing substantial growth — Crestor up 27 per cent, Seroquel, its schizophrenia treatment, 13 per cent — and revenues as a whole are benefiting from drugs wholesalers restocking their inventories after last year’s run-down. The upshot is that the company raised its earnings forecasts yesterday for the second time this year, even taking into account an expected $300 million hit to 2010 sales from US healthcare reform.

That guidance also includes the tougher comparisons that will confront the company: the lack of a boost such as the one that it enjoyed last year from the H1N1 swine flu vaccine; US generic competition to Toprol XL and Pulmicort, its heart and asthma remedies; and patent expiries for Arimidex and Casodex, two of its biggest cancer treatments.

AstraZeneca’s looming “patent cliff” — the loss of exclusivity on drugs that generate half of sales — has not gone away. The corollary is that it plans to launch two new products a year, enjoys a leading position in China, boasts a strong balance sheet (evident in this year’s $1 billion share buyback) and provides a 5 per cent dividend yield. There is also the longer-term M&A potential — possibly from Novartis, of Switzerland.

Between them, Crestor and Brilinta will produce big share price swings. But at £28.97, up 59½p, the shares trade at seven times 2010 earnings, a steep discount to European peers. Hold on if you own them; stand aside for a better point of entry if you don’t.

William Hill

William Hill entered the winner’s circle three times at the annual Betview Awards this week, collecting gongs for betting shop manager of the year, betting chain of the year and bookmaker of the year — the top prize. The group was also a runner-up in the online betting company category, although if yesterday’s first-quarter trading update had been available it might well have won.

In the 13 weeks to March 31, William Hill Online, its joint venture with Playtech, notched up a 31 per cent rise in new accounts, with net revenues up 25 per cent and operating profit up 51 per cent. Conversely, its betting shops suffered a 4 per cent fall in net revenues and a 13 per cent decline in operating profits. Excluding takings from gaming machines, its shops suffered an 11 per cent fall in the gross win — the amount left behind by the punter.

Although the Cheltenham Festival was a stormer for the bookies, the overall first-quarter gross win margin, at 17.5 per cent, was lower than the unusually high 18.8 per cent achieved in the same period last year, and the arctic weather played havoc with fixtures. The Grand National meeting was also helpful, despite the well-backed triumph of Tony McCoy on Don’t Push It in the National .

Given the hit last year from consumer recession, first-quarter numbers suggest that William Hill is making small steps forward, while keeping a tight rein on costs. Over-the-counter betting in its shops is likely to remain under pressure, but the marketing bonanza of the World Cup this summer may provide a further boost to its online sportsbook.

At 203p, or 11 times 2010 earnings, and yielding 4 per cent, this is a “buy” for the brave.

BBA Aviation

There’s a certain inevitability that Simon Pryce, chief executive of BBA Aviation, should have been among those waylaid by volcanic ash. The boss of the mid-cap provider of support services to business jets was about to leave Dallas when Europe’s airspace was shut — forcing him to revise his route and make multiple stops before returning to London five days later than planned.

The relief in yesterday’s first-quarter update was that the effect on BBA was not considerably worse. The damage was only “minor”, according to Mr Pryce, mainly because the company draws 80 per cent of sales from America. The rest of its business, all in Europe, was clearly hit, as were BBA’s commercial aviation activities in the US that handle outbound flights to Europe.

But that shortfall in sales was partially offset by a pick-up in charter activity once the ban was lifted — largely from the hiring of aircraft to circumvent a backlog in scheduled flights. The other reassurance is that Signature, BBA’s biggest division, is over the worst. Underlying sales are up 7 per cent, having been flat at the end of last year. Revenues from after-market services, such as aircraft repair, are down 4 per cent, but these tend to lag volumes in business jet flights and are expected to turn positive this year.

BBA’s debt is down to £390 million and, given annual cash generation of more than £100 million, should head lower still. The difficulty is that at 207p, up 25 per cent in three months, or 13 times 2010 earnings, much of the anticipated cyclical recovery in business aviation has already been priced in. Look to buy lower down.