+1 - Solvay
+1 - Solvay
+1 - Solvay
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Financial<br />
The amount of the provisions reflects the current estimate of the number of plaintiffs treated with our products;<br />
the number of cases continues to evolve, even though it tended to stabilize in 2007. The status of this litigation did<br />
not change significantly in 2007. Proceedings can be expected to continue in 2008 and after.<br />
The ligitation (class actions and individual suits) outstanding against Laboratoires Fournier relates, on the one hand,<br />
to the application of competition rules linked to changes in fenofibrate formulation in the USA and on the other<br />
to intellectual property rights in relation to different fenofibrate formulations in Canada (provisions have been set up<br />
only in respect of the latter item).<br />
Our opponents here are generic product manufacturers, distributors and third party medical care reimbusement<br />
bodies. These risks are the subject of certain contractual guarantees furnished by the former Fournier shareholders<br />
at the time of the acquisition in 2005. Proceedings are expected to continue during 2008 and beyond.<br />
In January 2008 the Group was informed that an application to register a generic equivalent of TRICOR ® had been filed<br />
in the United States. Fournier Laboratories Ireland Ltd and Laboratories Fournier S.A. filed patent infringement actions<br />
against Teva in the USA. Fournier Laobratories asserts intellectual property of TRICOR ® (fenofibrate) 145 mg NFE.<br />
Other provisions<br />
Other provisions stand at EUR 237 million, compared with EUR 287 million at the end of 2006.<br />
These include mainly:<br />
– the provision of EUR 50 million for the payment – deemed probable – of an additional price to the former<br />
Laboratoires Fournier shareholders linked to the absence of generics on the US market in 2008. This provision,<br />
initially set at EUR 100 million, reduced in 2007 to EUR 50 million with the payment of this amount following<br />
the absence of generics in 2007;<br />
– the provision to cover the additional research expenses to speed up the development of the psychiatric<br />
compounds included in the agreement concluded with Wyeth;<br />
– the provisions for any liabilities and charges linked to shut down or disposed-of activities.<br />
97<br />
Group policy on insurance<br />
<strong>Solvay</strong> group policy is to use insurance to cover all catastrophe hazards, in all cases where insurance is mandatory<br />
and also whenever insurance represents the best economic solution for allocating risk.<br />
The Group closely examines any new insurance coverage solution, so as to limit the financial consequences<br />
of incidents that could have a major impact on its assets, profits and its third party liability.<br />
In 2007, international insurance programs were renewed with a lower level of premiums and ancillary costs. The civil<br />
liability insurance market remains difficult for companies selling pharmaceutical products.<br />
(29) Net indebtedness<br />
The Group’s net indebtedness is the balance between its financial debts and cash and cash equivalents.<br />
It increased by EUR 49 million from EUR 1 258 million at the end of 2005 to EUR 1 307 million at the end of 2007.<br />
EUR Million 2006 2007<br />
Financial debt 1 691 1 882<br />
- Cash and cash equivalents -433 -575<br />
Net indebtedness 1 258 1 307<br />
The Group’s net debt to equity ratio increased by 1 % from 28 % at the end of 2006 to 29 % at the end of 2007.<br />
The EUR 189 million proceeds from the sale of the Caprolactones activity were received at the beginning<br />
of February 2008.<br />
<strong>Solvay</strong>’s long-term rating has been confirmed by the two rating agencies and remains at A (stable outlook)<br />
at Standard and Poors and A2 (stable outlook) at Moody’s.<br />
<strong>Solvay</strong> Global Annual Report 2007