29 Apr 2014

Risk fears overblown, says Ebos

7:46 am on 29 April 2014

Shares in Ebos have plunged as much as 16 percent in the last month, wiping nearly $256 million off the company's value.

But the pharmaceuticals distributor is describing the various concerns driving the decline as over-blown.

Among them are fears about the consequences on the business of a number of actual and mooted global deals which are set to re-shape the industry.

These include a multi-billion dollar asset swap between Swiss giant Novartis and British-based GlaxoSmithKline, a $46 billion takeover bid by Valeant Pharmaceuticals for botox maker Allergan and Pfizer's $100 billion tilt for AstraZeneca.

Also worrying investors are changes to Australia's pharmaceuticals benefits scheme expected in that country's budget next month.

Ebos managing director Mark Waller said those fears are over-blown and he sees as many opportunities as possible risks in such industry changes, particularly the potential Pfizer-AstraZeneca situation.

Mr Waller said the Ebos shares were pushed up by one of the largest fund managers in the world, Fidelity, building a stake.

The shares began falling the day after Fidelity disclosed it owned 5 percent of Ebos and stopped buying the stock.

Investors were also spooked earlier this month when one of the company's major competitors, Australian Pharmaceutical Industries, wrote $A131 million off the value of its assets, partly because of bad debts.

Mr Waller said his company has very strong debt management systems.