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Revenue on the Rise:The Top 50 Pharma Companies

PHARMACEUTICAL

The good news is that we saw an upswing in growth last year with our Top 50 Pharma Companies’ revenue growing by $38.6B, up 5% from 2015 after a lackluster 2% the year before. Not quite the 10% increase we saw with the Top 50 Medical Device Revenue, but formidable compared to the 2%.

Drug prices remained strong with the average cost per patient per year for an orphan drug of $143,333, and a non-orphan drug of $27,765. New Drug Approvals were down (27 vs. 56 in the prior year), however, we are already up to 26 approved in 2017. Mergers and acquisitions slowed in 2016. Biggest mergers included the Shire and Baxalta’s $32B deal, Pfizer’s $14B buyout of Medivation, AbbVie’s $9.8B purchase of Stemcentrx, Mylan’s $7.2B purchase of Meda, and Pfizer’s $4.5B acquisition of Anacor.

The jury is still out as to whether that was an election year blip. The first quarter of 2017 had a lower deal volume than 2016 but a higher deal amount ($49.6B over the prior $36B), a trend which continued in the second quarter with a 44% increase in deal value of $77.7B. Oncology, neurology, dermatology and ophthalmics were highly soughtafter areas in 2016 with a total deal volume of 20%, 13%, 8% and 7% respectively.

It is hard to comment on anything in the healthcare industry without wondering about the impact of the current political climate. The threat of a drug pricing squeeze, the legislative next steps for healthcare, and the market as a whole are huge influencers which could swing in many directions. Our best hope is to trust in the collective wisdom of legislators and the stability orientation of the markets. Together, we believe they will bend toward sanity.

Here’s a snapshot of where the Top 50 (based on 2016 revenue) were at year’s end. We have tracked movement up and down the list with regard to both ranking and revenue changes as compared with 2015. Companies are ranked by their 2016 medical revenue as furnished by their annual reports and publicly available sources, Edgar and Morningstar stock information websites (figures of non-U.S. companies were converted to U.S. dollars from various currencies using end of the year exchange rates for 2016 and 2015). Pharmaceutical revenues were extracted from reports to create an equal playing field. We also revised 2015 earnings to align “apples to apples” revenue reporting with 2016 figures. Companies that had revised 2015 revenues from our last year’s report include: Novartis, Johnson & Johnson, Sanofi, Novo Nordisk, Reckitt Beckinser, Actavis and Bayer.

Companies are ranked by their 2016 revenue as furnished by their annual reports and publicly available sources such as Edgar and Morningstar stock information websites. Figures of non-U.S. companies were converted to U.S. dollars from various currencies.

Companies are ranked by their 2016 revenue as furnished by their annual reports and publicly available sources such as Edgar and Morningstar stock information websites. Figures of non-U.S. companies were converted to U.S. dollars from various currencies.

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Written by hsandm

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