Sigma Pharmaceuticals (SIP) is an Australian manufacturer of prescription, over-the-counter and generic pharmaceutical products, as well as a distributer to pharmacies throughout Australia. SIP’s troubles of late have made it one the shares to sell.
Demonstrating its troubles, SIP recently advised it is unsure whether it will meet its budget this financial year due to the weak performance of its generics division.
SIP stated that the generics division’s earnings were $6.4 million below expectations.
In more bad news, SIP advised that proposed changes to government subsidies will add further pressure on already strained margins.
In a slightly positive development, SIP said that it has renegotiated debt facilities maturing past 2011, and is committed to clearing $100 million in debt by 31 March 2011.
SIP shares slid almost 5% on the day of the announcement, making it one of the worst performers in the Australian share market.