Spain Pharmaceuticals and Healthcare Report Q2 2008

Spain's drug market was worth US$16.58bn in 2007 and is forecast to reach US$18.9bn in value by 2012, representing a compound annual growth rate (CAGR) of 2.65%, which is hardly stellar but is perhaps understandable in light of the period of economic cooling that the country is likely to experience in the next few years. The generics sector is showing the most robust growth, which should reach a value of US$1.04bn by 2012, however the fact that it is growing from a low base is limiting its impact on the overall market.

In Q208, BMI has included Spain's medical device sector in its coverage for the first time. Following rapid growth in the early part of the decade, the market reached an estimated value of US$3.9bn in 2007.

Although the sector is still expanding at a brisk pace in local currency terms, exchange rate considerations have affected the market in US dollar terms. However, for 2006-2012, BMI forecasts that there will be a CAGR of around 10% in US dollar value, driven by the continuing incorporation of new technology and the demands of an aging population.

Spanish drugmaker Zeltia announced in December 2007 that it is planning to float its neurological disease arm Neuropharma on the stock market. BMI believes a public float could be a good source of new capital and may spark further listings in the Spanish drug sector. Canadian generics firm Apotex has made its second acquisition in Europe in the space of a month, snapping up Spain's Lareq Pharma, for an undisclosed fee, from parent company Industria Quimica Y Farmaceutica.

Spain remains at the bottom of BMI's business environment rankings due to sluggish growth and a relatively low per capita spend on pharmaceuticals. However, this last factor could actually act as an incentive for investors as it means that there remains untapped capacity in the country and potential upside, especially in underdeveloped areas such as generics.