Health Check: Trump says a pharma tax is in the offing – with no negotiation

Donald Trump again has raised the prospect of a new tariff on imported pharmaceuticals, reportedly pitched at a 25% rate.

Memo picture editor: it's a pharma -not parma - tariff. Please provide the correct image. Pic via Getty.

• Global drug companies again are on the alert after Donald Trump reiterated his intention to impose a pharma tariff rumoured to be 25%

• No sweat! as Botanix raises $40 million in a placement

• Imricor’s ablation news lauded as a “truly groundbreaking moment”

Like a patient on Xanax, the non-US global pharma sector has been in a state of relaxed wooziness since Donald Trump’s U-turn on some punitive country tariffs last week.

The effects have worn off, with Trump overnight warning of drug tariffs in the “next month or two”.

The sector thought it might have been spared, despite Trump’s initial declaration of a pharma tariff on April 8.

Adding to the angst, US commerce secretary Howard Lutnick said the impost would not be open for negotiation, along with special tariffs on cars and semiconductors.

But maybe that’s just a clever negotiating tactic in itself.

“They are just going to be part of making sure we reshore the core national security items that need to be made in this country,” he declared. “We need to make medicine in this country.”

Speculation centres on a 25% rate, aimed at the large European drug makers.

Responding to the threat, Novartis last week announced a US$23 billion plan to expand its US facilities over the next five years, while Eli Lilly and Johnson & Johnson also have pledged to bolster their US footprint.

It’s possible that drugs in shortage may be exempt, as dying patients picketing the White House is never a good look.

The Prez reportedly is also considering another tack: an official investigation into US drug imports and how they impact national security.

Meanwhile, any chicken, mozzarella cheese and pork importers to the US need not be alarmed: it’s not a parma tariff – or not yet, anyway.

Local tariff impact is clearly unclear

Australia imports about $1.6 billion of pharmaceuticals to the US – not much in the total scheme of things - with CSL's (ASX:CSL) blood products accounting for most.

Should investors be concerned about our biggest biotech?

It’s hard to tell.

CSL takes blood plasma (mainly) from US donors and turns them into life-saving facilities in Switzerland, Germany, here (Broadmeadows) and the US.

With half of CSL’s sales deriving from the US, there could be some impact. But its key plasma rivals are likely to be equally affected, if not more.

Botanix Pharmaceuticals (ASX:BOT) (see below) sources some of its drug material from Canada, but assesses a likely muted impact of US$4 and US$15 per bottle, which sells for around US$1000.

Botanix goes to the well on the back of strong initial US sales

Buoyed by initial US sales of its excess sweating treatment, Botanix has raised $40 million in a placement to expedite the roll out.

In June 2024 Botanix won FDA approval for Sofdra, a treatment for the excessive sweating condition axillary hyperhidrosis.

In February the company started selling the drug in earnest.

With sales better than expected, Botanix intends to expand the rollout sooner than expected.

The company says new patients are trending at more than 500 per week, with refills trending at 100%.

The number of prescribers owing from 638 in February to 1052 in March.

While Botanix is focused on underarm sweating, the company estimates the broader US hyperhidrosis market (any bodily sweating) at 10 million people, of which only 3.7 million have sought treatment.

The condition is the third most common skin disorder behind acne and dermatitis.

The company did the placement at 33 cents a share, a 7% discount to Friday’s frozen price.

Imricor’s trial lauded as a “groundbreaking moment”

The heart device sector is having a moment and not just because of EBR Systems (ASX:EBR) winning breakthrough FDA approval for its left-ventricle pacemaker.

Imricor Medical Systems (ASX:IMR) reports that docs at Amsterdam University Medical Centre have performed the world’s first first-in-human ventricular ablation, as guided in real time by magnetic resonance imaging (MRI).

The import here is that Imricor is developing the world’s first MRI cardiac ablation catheter, along with a mapping system called Northstar.

The procedure involved the right side of the heart as well as the trickier left side.

Broker Morgans today describes the procedure as a “groundbreaking moment” in the evolution Imricor, founded by CEO Steve Wedan two decades ago.

The firm says that following a $70 million capital raising, Imricor is in a strong position to achieve its “key catalysts”.

These include seeking US approval for atrial flutter indication, as well as US and European approval of Northstar.

Imricor also has a European trial underway for ventricular tachycardia.

EBR Systems shares rebound after surprise sell-off

Shares in EBR Systems this morning have regained some of the value lost in yesterday’s sell-off post FDA approval of its WISE pacemaker.

The 17% smacking was somewhat puzzling, given the FDA delivered what the company wanted.

Let’s put it down to folk using the liquidity to take profits after the stock’s strong run. Call it a purging of the speculators and flippers.

EBR is now girded for a staged rollout of the device to a small number of heart centres, in view of expanding uptake in a US$3.6 billion addressable market.

One proviso is that while EBR’s US$66 million ($105 million) of cash funds the company through initial commercialisation, further capital raisings will be needed and the company is likely to be a loss-maker for some years.

Bell Potter expects a further equity raising of US$66 million in calendar 2025.

The firm forecasts a US$48 million loss this year, with deficits of US$52 million and $US42 million in the two subsequent years.

As the Botanix experience also shows, attaining commercialisation does does not mitigate the need for funding.

To make money, you need to spend it – and often in large wads.

Noxopharm taps Heracles for an elusive Lupus cure

Ahead of World Lupus Day on May 10, Noxopharm (ASX:NOX) is ready to apply for approval for a phase human study of its proposed treatment for the debilitating autoimmune disease.

Involving a battery of tests, a now-completed preliminary animal study found “no clinically relevant safety issues”.

The next step is applying for Human Research Ethics Committee for the human trial, dubbed Heracles (the Greek god renowned for his immense strength and heroic deeds).

Noxopharm’s candidate, SOF-SKN contains a proprietary oligonucleotide. This agent binds to specific inflammation sensors in the body to reduce inflammation at its source.

An oligonucleotide is a synthetic strand of the genetic materials DNA or RNA.

Currently uncurable, lupus causes inflammation multiple organs and tissues.

More broadly about 780 million people – 10% of the population – are affected by autoimmune diseases, which involve the body mistakenly attacking itself rather than malevolent agents.

Beyond lupus, Noxopharm is also eyeing larger autoimmune disease markets including rheumatoid arthritis, psoriasis, type 1 diabetes, inflammatory bowel disease and even dementia.

At Stockhead, we tell it as it is. While Imricor and EBR are Stockhead advertisers, they did not sponsor this article.

Originally published as Health Check: Trump says a pharma tax is in the offing – with no negotiation