Tornado damages major Pfizer plant in US, hiking rival's shares

Nearly 25% of all sterile injectables used in US hospitals are produced at the severely-damaged North Carolina facility

Pfizer is the largest supplier in the US injectables market and Hikma the second-largest.

A  tornado that severely damaged a Pfizer plant in the US has helped boost the shares of rivals to the drugmaker. 

Pfizer said its plant in Rocky Mount, North Carolina, which is one of the world's largest sterile injectable product facilities, suffered heavy damage from a tornado.

Shares in UK pharmaceutical company Hikma rose by the most in 10 months on Thursday on the news. 

Nearly 25% of all sterile injectables used in US hospitals are produced at the Rocky Mount facility, according to Pfizer's website.

Hikma shares rose by as much as 9.4% in their largest one-day increase since last September, hitting an 18-month high. Pfizer is the largest supplier in the US injectables market and Hikma is the second-largest, analysts said.

Shares in German rival Fresenius, another major supplier to the US injectables market, rose by over 6% at one stage. 

"It is a very large manufacturing facility, therefore I think the read across to Hikma is that they are the second-largest supplier and they will benefit from the problems Pfizer has supplying the market," Stifel healthcare analyst Max Herrmann said.

Hikma's own supply is already constrained, Mr Herrmann added.

A spokesperson for Hikma said the company will work with the US Food and Drug Administration and others to understand the nature of any supply shortages and do everything possible to try and address them.

Our thoughts are with the people of North Carolina impacted by this tornado. As always, Hikma will continue to do all that it can to support the needs of patients across the US.

Hikma has a market value of around $5.6bn (€5bn), compared with Pfizer's $205.7bn and Fresenius $16.7bn. 

Fresenius' generic hospital drugs unit Kabi is Pfizer's competitor on the US injectables market.

"We await further confirmation of the impact and how quickly the facility can be turned round, but this is likely to be seen as a source of potential upside for Kabi," JP Morgan analysts said in a research note.

•  Reuters