The development and approval of the Group's products depends on the ability to procure active ingredients and special packaging materials from sources approved by regulatory authorities. As the marketing approval process requires manufacturers to specify their own proposed suppliers of active ingredients and special packaging materials in their applications, regulatory approval of a new supplier would be required if active ingredients or such packaging materials were no longer available from the supplier specified in the marketing approval. The need to qualify a new supplier could delay the Group's development and commercialization efforts.
The Group uses bovine-derived serum sourced from New Zealand and North America in the manufacturing processes for REPLAGAL and ELAPRASE. The discovery of additional cattle in North America or the discovery of cattle in New Zealand with bovine spongiform encephalopathy, or mad cow disease, could cause the regulatory agencies in some countries to impose restrictions on these products, or prohibit the Group from using these products at all in such countries.
The actions of certain customers can affect the Group's ability to sell or market products profitably, as well as impact net sales and growth comparisons
A small number of large wholesale distributors control a significant
share of the US and European markets. In 2008, for example, approximately 56%
of the Group's product sales were attributable to two customers; McKesson
Corp. and Cardinal Health, Inc. In the event of financial failure of any of
these customers, the Group may suffer financial loss and a decline in
revenues and earnings. In addition, the number of independent drug stores and
small chains has decreased as retail pharmacy consolida
|SOURCE Shire Plc|
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