The rising U.S. dollar could hurt revenues for U.S. biotech firms by denting their foreign sales during late 2005 and early 2006.
Gilead, with nearly half its sales occurring outside the U.S., will see the steepest foreign sales decline, Merrill Lynch analyst Eric Ende writes in a recent note.
Assuming the dollar rises 8.9 percent year-over-year in the fourth quarter, and 11.5 percent year-over-year for the first quarter of 2006, Gilead's foreign sales will fall 4.4 percent in late 2005 and 5.6 percent in early 2006, Ende predicted.
Ende also predicted sales declines for Genzyme, Biogen Idec and Amgen. Genzyme, with roughly 30 percent of its sales from outside the U.S., should see sales fall about 2.5 percent in fourth quarter 2005 and 3.4 percent in first quarter 2006. Biogen Idec, with 24 percent of sales from outside the U.S., should see sales decline 2.1 percent in late 2005 and 2.8 percent in early 2006. Amgen, with approximately 17 percent foreign sales, should see sales fall 1.5 percent in late 2005 and 1.9 percent in early 2006.
In other company news, Genzyme recently announced the launch of a colorectal cancer test to determine the correct dose for its colorectal cancer drug Camptosar (irinotecan HCl). The FDA recently issued a health alert regarding the use of Genzyme's leukemia drug Campath (alemtuzumab) in a clinical trial for the treatment of multiple sclerosis.