The global Pharmaceutical market has reached an incredible milestone of global sales revenue in 2015 of almost €1.2 trillion, with strong forecasts to increase to €1.6 trillion by 2018.
Only the 12 largest companies in the Pharmaceutical & Biotechnology landscape achieved €325 billion of revenue only from the Pharmaceutical Divisions (e.g. J&J Business Units divisions are: Pharma, Consumer and Medical Devices), reflecting already a market share of 31.8%.
The Pharma&BioTech market globally shows high levels of consolidation and maturity, where in the last year the activities around M&A were intense and the concentration in terms of market share was quite expressive.
Looking at the primary location of half of the top 12 Pharma&Biotech companies present in this ranking , United States have a strong representation of 6 companies, followed by different European countries (Switzerland , U.K.  and then France  and Germany ).
Another strong indicator is the R&D investment increasing values from almost all the top 12 companies in this industry, where in an average the companies spend one-fourth of all the sales revenue in Research and development and almost one-third in marketing their products.
As a strong sign of all the market dynamics and looking at a tiny niche market, for 2015, IMS was forecasting the industry spending on biosimilars to reach $2 billion annually, or almost 1% of total global spending on biologics, showing clearly that the industry is already preparing the future in a very dynamics way, where in another mature part of the market and still according to IMS, the increase of the spending on biosimilars will increase by $311 million and compared with 2010 levels.
In 2015, the Pharmaceutical and BioTechnology (Pharma&BioTech) market worldwide was open to increasing pressures from the regulators and constantly under the economic and compliance spotlight from different stakeholders for all operating regions.
Expressive can also be the Pharma&BioTech landscape for the next 5 years, where trends like product innovation, clinical excellence, Pharmacoeconomics, patient centricity and commercial excellence will continue to growth along with economic stability and new business models adapting to more complex and regulated scenarios, where Tax inversions moves or M&A activities might continue to be on the top agendas.
The industry continuous ability to resist, antagonize and survive in a very agile way to all pressure resulted from the increasing costs, specialized demand, R&D complexity, scientific and clinical focus, regulation and economic pressure is closely tied to the capability to strength and continue to overcome all barriers resulted from new and more challenging economic, demographic and geographic drivers that strongly affects the Pharma&BioTech sector.
Notably in 2015, the European Medicines Agency (EMA) was able to effectively support the Pharma&BioTech growth, providing 93 positive opinions, where 39 of them were for new active substances or NMEs (New Molecular Entities). Also remarkable was the high recommendation of new 18 rare or “orphan” drugs for approval, exceeding the 2014 record of 17 orphan drugs approval.
One of the purposes of this research is to rank with an EU focus, the market potential of 55 identified Pharma&BioTech based on some the last 5 years ranking studies done by different entities (governmental and private) with the main objective to understand from all the 55 target companies which were the top 12 companies in terms of different market calculation dimensions.
In this study will be presented the top 12 Pharma and Biotech companies ranking for 2016 and based on different indicators.
For one of the analysis done in this study was selected the Market Potential Index (MPI) applicable to the Life Sciences industry (Pharmaceutical and BioTechnology).
This indexing study is conducted by several private companies globally to help companies comparing different market dimensions, strength and economic conditions that specific companies operate.
For this study and applied to the Life Sciences sector were selected ten dimensions to represent the market potential of each of the company selected on a scale of 1 to 100.
These dimensions were measured with resource of several indicators, and are weighted in the determination of all the companies’ dimensions and indicators to the single and company unique Life Sciences Market Potential Index (LS-MPI).
Another ranking image developed was the Top 12 Pharmaceutical & BioTechnology ranking by total revenue in 2015.
Sample of Data used for ranking analysis:
Overview Pharmaceutical and BioTech Companies (random order)
Bayer AG is the only German pharmaceutical company present in this ranking. Founded in Barmen Germany in 1863 with headquarters in Leverkusen.
2016 has been already a very dynamic year for Bayer with recent news about possible M&A deals of Bayer with Monsanto and BASF with the Bayer’s division Crop Science. Neither of the companies has commented but according several sources questions regarding antitrust issues could translate into serious barriers for the possible transactions.
The company have 3 corporate divisions: HealthCare (Pharmaceutical, consumer health, Medical, Animal Health) CropScience (Crop protection/seeds and environmental Science) and Covestro Polyurethanes, Polycarbonates, Industrial operations).
The Pharmaceuticals Division have as main focus the prescription products (cardiology, women’s healthcare), specialty therapeutics (oncology, hematology and ophthalmology) and radiology equipment. The key growth products are Xarelto® and Eylea®. For the Consumer Health unit, the grow has been significant representing already 26% of the company’s EBITDA. With the acquisition of Merck OTC in 2014, currently Bayer AG is already the second-largest OTC business globally.
The company has facing strong competition in the pharma space with increasing competition to Xarelto® from Eliquis® as well with edoxaban. Also has been growing the competition to Betaseron® (multiple sclerosis) and Kogenate® (hemophilia).
Amgen with a solid and promising pipeline appears in this ranking with good projections for this year of 2016, showing robust results for the FY2015 and key growing numbers for 2016.
One of the strength points for Amgen is clearly the differentiated and diversified pipeline, with 31 preclinical and clinical targets with strong signs for Genetic support, having already the largest therapeutic agent modalities (11), clear agility in the different R&D stages with more than 11 innovative molecules in Phase I & II for Oncology and Hematology, 6 for Inflammation and then a solid pipeline with new indications in Phase III having main focus in Hematology/Oncology, Cardiovascular and Neuroscience.
Going back to the 2015 FY results, Amgen proven to have strong product revenues with an aggressive pricing strategy for the main markets (U.S. and EU), where not surprising about 66% of the company revenue was resulted of ENBREL®, Neulasta®, Aranesp® and EPOGEN® with strong remarks from the medical community around the multiple indication options of some of the current Amgen’s pipeline.
Amgen is already one of the world’s largest stand-alone biotech company by sales and one of the most promising pipelines for the next 5 years in the biotechnology space.
Hoffmann-La Roche AG
Roche with 2015 sales revenues of €42 billion was a strong reflection of the pharma stability, where only the pharmaceutical division from Roche contributed more than 77% to the global sales revenue.
Roche with the strong franchises in oncology and immunology, including a strong R&D effort in the diagnostics segment has proven to be the most solid pharmaceutical company in 2015.
Roche’s top 3 products: Avastin®, Herceptin® and Rituxan® made the strong contribution of 50.53% of the sales revenue to the total revenue in 2015 showing portfolio diversity and strong results from the key top brands.
As main highlights for 2015 important to highlight the approval of Lucentis® in the Diabetes retinopathy , the FDA breakthrough therapy designation for Venetoclax™ (small molecule oral drug being investigated to treat chronic lymphocytic leukemia) in two forms of Leukemia, ACTEMRA® (tocilizumab) in systemic sclerosis, ALECENSA® (alectinib) type of lung cancer and emicizumab (ACE910) in hemophilia A.
Roche positive potential in terms of product pipeline is mainly due 70 new molecular entities in clinical development with promising results in Multiple Sclerosis (3 Phase-III clinical studies) and promising results in the Immunotherapy portfolio.
Johnson & Johnson
Johnson & Johnson is a global manufacturer and provider of diversified health care and pharmaceutical products, medical devices and equipment. J&J have 3 Business Units divisions:
- Pharmaceutical (focus in 5 therapeutic areas; Immunology, Infectious diseases and Vaccines, Neuroscience, Oncology and Cardiovascular and metabolic diseases.
- Consumer: OTC, Oral Care, Baby products and Beauty.
- Medical Devices
The Pharmaceutical division contributed with 44.85% of total revenue with solid diversity of portfolio, where Remicade®, Stelara® and Zytiga® combined revenue as the main 3 key products was USD 11.266 Million.
The year of 2015 for J&J was defined by high return to the company shareholders where approximately 70% has been returned in the form of dividends or share repurchases.
After the asset change with Novartis (closed in March 2015), it has emerged as a world leader in consumer/OTC healthcare products and vaccines. GSK’s pharma business consists of ViiV/HIV (with Pfizer and Shionogi as minority shareholders), respiratory and a few smaller therapeutic areas.
GSK in the Top 12 Revenue for 2015 reflects a solid position, being in the 6th with a reported revenue of €37.929 million and a low 8th position in the Market Potential ranking mainly due the less significant results from the Pharmaceutical division and long term pipeline strategy and related Market Cap. The R&D investments in 2015 with €4771 million reflected a strong bet for the company long term strategy and pipeline reinforcement.
In the last 2016 2 months has been evident a continuous growth having the main source the strong Consumer & Vaccines portfolio good results in the HIV space with ViiV. The Key products are Advair®, Triumeq®, plus Boostrix® & Synflorix®.
Sanofi is a diversified European pharmaceutical company with capabilities in branded and generic pharmaceuticals, vaccines and consumer health. In 2015, pharma (including consumer) contributed 81% of Sanofi group business operating profit, while vaccines contributed 14%. Key franchises in pharma are diabetes (including flagship product Lantus®) and Genzyme® (focused on rare diseases, multiple sclerosis). Sanofi is the only French company in both of rankings and have a solid 7th position in terms of 2015 global revenues and mainting the 7th positon in the Market Potential ranking with solid results in the revenue growth form 2014 to 2015. The Top-3 products: Lantus®, Plavix® and Lovenox® had a contribution of 29% to the global revenue showing a strong portfolio diversity and low concentration of revenue in the top key brands. However the company is facing some challenges in terms of patents erosion and 2016/2017 will be critical years in terms of R&D.
AstraZeneca (AZ) is a European pharmaceutical company. Since the top management change in 2012, AZ has been able to reinvent itself as an innovation-driven company, changing its portfolio from a few maturing blockbusters to a portfolio built on 4-5 growth platforms supported by internal innovation and business development.
AZ pipeline is focused on immuno-oncology, classic oncology, respiratory, inflammation and cardio/ metabolic, plus several non-core areas (CNS, anti-infectives), where AZ opportunistically maximizes value from its innovation via solid and robust partnerships.
While AstraZeneca faces challenges in its core diabetes and respiratory franchises with Onglyza® and Symbicort®, the investment done in the Oncology and Cardiovascular is still expressive. The Key long term pipeline assets include immune-oncology drugs durvalumab (MEDI-4736) and tremelimumab. The oncology pipeline recently saw success with the approval of Tagrisso® for lung cancer. AstraZeneca growth has been solid and expectations around durvalumab Phase III data in H&N cancer can be solid future points in terms of potential.
The company revenue last year (€21.679) enabled the company being in this top 12 ranking where was quite expressive the investment done in R&D and as part of the company strategy to anticipate revenue loss with the patent expiring of Crestor®, Symbicort® and Nexium®.
Novartis has three divisions: Pharmaceuticals (64% of 2014 core operating profit; growth drivers: Tasigna®, Gilenya®, Xolair®, Cosentyx®, Entresto®), Alcon® (26%, a leading eye-care business selling cataract surgical equipment, ophthalmic drugs and contact lenses) and Sandoz (11%, focused on high-value generics including biosimilars).
Novartis due the strong and solid revenue results for 2015 is in the 3rd position of the Top 12 revenue ranking with a solid revenue of €44.186 with good results of Glivec®, Gilenya® and Lucentis®, having a combined sales revenue of €8325.
Pfizer is the world’s largest branded pharmaceutical company. Pfizer’s broad portfolio of medicines includes products in respiratory, infectious, and metabolic/endocrine diseases, and disorders of the cardiovascular and central nervous systems. Pfizer is a leading player in breast cancer, with Palbociclib®, and could become a key player in immuno-oncology.
Pfizer has been one of the most active players in terms of M&A and last year tentative of acquiring Allergan has been another critical moment in the company strategy plan and after failing the polemic acquisition of AstraZeneca.
Hospira® has been one good example of what Pfizer can represent in the market in terms of commercial solidity and long-term strategy, where the company continuous to show a strong and diversified Portfolio.
Merck & Co.
Merck discovers, develops, and markets human and animal health products. It is a major vaccine provider, with Gardasil for preventing HPV, as well as a player in the diabetes space, and it is becoming a key player in immuno-oncology, with Keytruda®, which could
hit the €4bn by 2020.
Looking at 2015 results, Merck had the solid performance in terms of revenue of €343636 million with a total R&D investment of €5879. Looking at the top 3 products revenue the company had a revenue of €7489 from the top 3 products.
Gilead Sciences, Inc. is a research-based biopharmaceutical company focused on the discovery, development, and commercialization of innovative medicines.
Gilead Sciences discovers, develops, and commercializes treatments for unmet medical needs. Its currently marketed products include Sovaldi® and Harvoni® for hepatitis C; Stribild®, Complera®, Atripla®, Truvada®, Viread®, and Emtriva® for HIV; Hepsera® for hepatitis B; and AmBisome® for the treatment of fungal diseases. Gilead launched its first oncology drug in 2014 with Zydelig®, which is indicated for B-cell malignancies. Gilead’s key pipeline programs include increasingly patient-friendly product improvements and oncology drugs.
The Company had a total revenue in 2015 of €28210 with a total R&D investment of €2643 being the company with lowest investment in R&D from the Top 12 companies in the ranking.
AbbVie is the proprietary pharmaceuticals business of the previous Abbott Laboratories. The company’s revenues are largely derived from Humira® (60% of total revenues) as well as other sources, such as oncology, virology and women’s health.
Abbvie had a 2015 revenue of €20.021 million that allowed to be in the 11th position with solid annual results reported in 2015. Abbvie due the high dependency on Humira® allows to have some concerns regarding biosimilar competition.
The total investment in R&D was €4285 million with net earnings of €6.141 in 2015.