There may be the calm before the storm but it is chaos and then clean up afterward. "Superstorm" Sandy left nearly 50 dead, millions without electricity and did up to $20 billion in estimated damage, but drugmakers appeared to have been able to hunker down and get through with little hardship.
With a concentration of both drug industry North American headquarters and production along the Eastern seaboard, there was a long list of drugmakers that closed offices and plants in preparation for the storm. They included Novo Nordisk ($NVO), Johnson & Johnson ($JNJ), AstraZeneca ($AZN), Daiichi Sankyo, Teva Pharmaceutical Industries ($TEVA), Novartis ($NVS) and others.
Contract manufacturers Catalent Pharma Solutions, Lonza and DPT Labs told Outsourcing Pharma that they had gotten through with no serious problems. DPT said backup generators kicked in at its sterile and specialty products plant in Lakewood, NJ and that when full power was restored employees would resume production there. API and chemical manufacturer BASF, which had closed 5 plants up and down the eastern seaboard on Tuesday, told the publication its operations had weathered the storm relatively well.
While no serious damage was being reported by drugmakers, some are now working through the logistics maze left by the storm. They have to find alternates to move product that might have been scheduled to ship by air or other means that Sandy had disrupted.
GlaxoSmithKline ($GSK) told Reuters it had shifted to a continuity plan to make sure its products got where they were needed, particularly given how many airports had closed. The company said it believed there was enough product in the supply chain to avoid any serious supply problems.
As the storm ripped through power lines and cell towers, some some pharma executives had to get creative about keeping on top of their companies. Ron Cohen, CEO of Acorda Therapeutics ($ACOR) in Ardsley, NY, told The Wall Street Journal that the company rescheduled its third-quarter earnings reports until today because of the storm. Cohen tried to manage the company from his home in Irvington, NY, but found that challenging, given he had no electricity and no cell service. But he did have his two children and their friends in the house. He was able to use Skype, but said without electricity, his backup power might become a car charger.
The storm led the New York Stock Exchange (NYSE) to close for two days and like Accorda, several other drug companies delayed earnings reports. Pfizer ($PFE) and Vertex Pharmaceuticals ($VRTX) both moved earnings reports to Thursday.
While the storm itself may have passed on, it will take time for drugmakers to fully apprise damage and the costs associated with the storm. EQECAT, a catastrophe risk modeling firm, told CNBC it thinks economic losses from Sandy could run from $10 billion to $20 billion, with insurance covering maybe half those amounts. That is small compared to the estimated $108 billion in damage caused in 2005 by Hurricane Katrina, the most destructive natural disaster to afflict the U.S. Some economists pointed out that with any severe damage from a natural event there is a silver lining. The economy will get a financial boost from the rebuilding that will occur.
- here's the Reuters story
- read the Outsourcing Pharma story
- more from The Wall Street Journal
- and more from CNBC
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