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REVENUES CONTINUE TO RISE: THE TOP 50 PHARMA COMPANIES

It was a year of continued good news as we saw increased growth last year with our Top 50 Pharma Companies’ revenue growing by $56.9B, up 7% from 2016 after 5% growth the year before. This is a strong trend given that we were only at 2% the prior year.

The market is growing. Our Top 50 are growing faster than the total market. Worldwide total prescription drug sales growing at a rate of 2.6%. R&D spend is growing as well at $165B up 3.9% over 159B in 2016. And we saw a 104% increase in FDA approvals of NMEs & Biologicals for a total of 55, vs. 2016’s low of 27. Oncology drugs lead the share of the total market with $104B, Anti-rheumatics are next at $55.7B and Anti-diabetics at $46.1B. Drug prices continue to remain high with the average cost per patient per year for an orphan drug of $147,308 (up from 145,262) and a non-orphan drug of $30,708 (up from 28,904).

Mergers and acquisitions slowed a little in 2017 (101 vs. 130 in 2016). Biggest deals included the $30B J&J acquisition of Actelion, Gilead’s $11.9B purchase of Kite Pharma, Thermo Fischer’s $7.2B takeover of Patheon, Takeda’s $5.2B purchase of Ariad, Pamplona Capital Management’s $5B acquisition of Parexel, Bain and Cinven’s $4.36B purchase of Stada, Fresenius Kabi’s $4.3B purchase of Akorn, Novartis’ $3.9B takeover of Advanced Accelerator Applications, and BMS’s $2.3B acquisition of IMF Therapeutics.

The thought is that the US tax reform will have a positive impact driving 2018 deals as the corporate tax rate drops below 20%. The first half of 2018 has shown the impact with over $100B spent on mergers and acquisitions to date. News of Obamacare has fallen off the radar and the industry is trending up. We continue to hope for the best as our markets seem fueled for growth.

Here’s a snapshot of where the Top 50 (based on 2017 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 2016. Companies are ranked by their 2017 pharmaceutical 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 2017 and 2015). Pharmaceutical revenues were extracted from reports to create an equal playing field. We also revised 2016 earnings to align “apples to apples” revenue reporting with 2017 figures. Companies that had revised 2016 revenues from our last year’s report include: Actavis (purchased by Teva), Bayer (restated report), and Sun Pharma (exchange rate conversion).

What do you think?

Written by hsandm

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