Europe’s pharma industry braces for tariffs as carve-out hopes fade

Europe’s pharma industry braces for tariffs as carve-out hopes fade


SEIZED OZEMPIC, WEGOVY AND OTHER WEIGHT LOSS DRUGS AT JFK AIRPORT’S INTERNATIONAL MAIL FACILITY.

CNBC

COPENHAGEN, Denmark — Europe’s pharmaceutical sector is bracing for the potential impact of U.S. tariffs as hopes of an industry-wide exemption by U.S. President Donald Trump fade.

The pharmaceutical industry has until now been exempt from trade levies, but Trump confirmed last week that he would soon impose tariffs on the sector.

Drugmakers are now lobbying the president for a phased approach to duties on imports to the U.S., Reuters reported Tuesday, citing four sources familiar with the discussions. The sources said the levies may not be announced Wednesday but were likely inevitable.

Gradual implementation of tariffs on the sector could reduce the immediate financial hit and allow companies time to relocate their manufacturing stateside. Nevertheless, some firms have warned that the lack of clarity is already having negative secondary effects.

“For us, what is more important is not only the impact of tariffs, it’s also the impact it makes on the market,” Ester Baiget, CEO of Danish biotech firm Novonesis, told CNBC Tuesday.

“When you bring tariffs, it drives uncertainty, and when you [are] uncertain, you pause, you pause innovation, you post launches, you pause investments,” said Baiget, whose firm derives around 30% of its sales from the U.S. but has also been boosting its manufacturing presence in the country.

We don’t need barriers to jobs and growth creation, Danish business minister says

Denmark is one of Europe’s largest pharma and biotech hubs, home to companies including Wegovy-maker Novo Nordisk and vaccine-producer Bavarian Nordic — both of which have high exposure to the U.S.

Novo Nordisk’s chairman told CNBC last week that the company was not speculating ahead of Trump’s tariff announcement and was instead focused on remaining flexible.

“It doesn’t make a lot of sense to speculate too much,” Chairman Helge Lund told CNBC on the sidelines of the Danish pharmaceutical giant’s Annual General Meeting. “We are laser-focused on what we can impact.”

Still, questions have been asked about how tariffs might impact U.S. sales of Novo’s hugely popular obesity and diabetes treatments — and the implications for U.S. rival and Zepbound-maker Eli Lilly. Lund would not be pressed on what share of its weight-loss drug sales derived from U.S. plants, instead pointing to the firm’s “very significant” manufacturing set-up in the U.S.

‘No. 1 question on investors’ minds’

The threat of tariffs has added to uncertainty within the investment landscape too. Speaking to CNBC Monday, Emily Field, head of European pharmaceuticals research at Barclays, cited tariffs as the “No. 1 question on investors’ minds.”

Pharma tariffs the 'number one question' on investors' minds, Barclays says

Morten Bødskov, Denmark’s minister for industry, business and financial affairs, told CNBC Tuesday that he was liaising with the country’s pharmaceutical industry and corporates more broadly about the potential impact of tariffs on the small, export-heavy economy.

“We are, of course, in close dialog with them,” Bødskov said. “It’s our job to bring them into discussions on the way the world is changing. Many of them are world-leading companies, so it’s our job to help them to see the perspectives of future markets,” he added.

However, he noted that it was unclear whether the Trump administration could be persuaded to roll back on its protectionist policies, or make allowances for certain sectors.

For companies like Novonesis, meanwhile, Baiget said it was a matter of watching events “very closely” — and readying for action if needed.

“There is a lot of volatility, and there is a lot of rapidly moving trends,” she said. “It’s important that we decouple, and we also learn how to maybe buffer some of them.”



Source

JPMorgan’s top biotech and pharma picks for the second half
Health

JPMorgan’s top biotech and pharma picks for the second half

Biopharmaceutical stocks’ underperformance versus the broader market for a third-straight year is an opportunity for investors, according to JPMorgan. Analyst Chris Schott said in the firm’s June outlook for biopharma that the sector’s poor performance can be traced back to concerns over President Donald Trump’s tariffs and his ” most favored nation ” executive order. […]

Read More
How twin sister triathletes doubled down on sports success to raise health-startup millions from investors
Health

How twin sister triathletes doubled down on sports success to raise health-startup millions from investors

During their last year of completing work for doctoral degrees in physiology, twin sisters Michal Mor and Merav Mor started to compete in Ironman triathlon races. The demand for peak fitness led them to the realize the importance of understanding personal metabolism, and the lack of data being collected on it through devices accessible to […]

Read More
It’s not just AI — China’s quickly gaining an edge over the U.S. in biotech
Health

It’s not just AI — China’s quickly gaining an edge over the U.S. in biotech

Two graduate students research chemical products in a laboratory in Xiwangzhuang Town, Zaozhuang City, Shandong province of China, on Dec. 26, 2023. Nurphoto | Nurphoto | Getty Images BEIJING — For all the attention on U.S.-China competition in artificial intelligence, new studies point to China’s rapid rise in biotechnology, especially for drug and agricultural development. […]

Read More