Top 15 Pharma companies – FY 2016 performance review

microscope

The 2016 earnings season is nearly over and some companies gave really excellent performance reports like Bristol-Myers Squibb with 17% organic revenue growth and AbbVie with 13.3% sales growth.

Negative performance for some players like Gilead (suffering base effect linked to a very strong 2015 performance) and AstraZeneca (struggling with a fragmented portfolio unable to drive growth).

In the PDF document (q4-2016), I computed the 2 ratios (operating margin and R&D in % of sales), I also added a column for 2017 guidance follow-up and made some comments on the results, especially the main products and whether I could see any growth driver.

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Top 15 Pharma companies – Q3 2016 performance review

pill_bottle

The earnings season for Big Pharma is now over with Teva publication yesterday.

As usual, a table summarizes the main figures and key points from each publication. Worth noting that some companies like Gilead suffered from a basis effect after a stellar performance last year. Among top performers, Bristol-Myers Squibb, Pfizer and GSK held well during the last quarter. The bottom performers were Gilead, AstraZeneca and Novartis with the last two companies experiencing negative impact from generics.

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Top 15 Pharma companies – Q2 2016 performance review

LabVials

All the big names published their Q2 results during the summer. After spending some time on the beach, looking at their numbers is a good way to be immersed in the industry again.

During this last earnings season, performances were extremely heterogeneous. AbbVie and BMS had stellar revenue growth while AstraZeneca, Gilead and Sanofi showed poor performance for diverse reasons (explained below in the table – NB: you can click on it to make it bigger).

Comparing the Top 15 each quarter is insightful and allows me to spot pockets of growth and dynamism in the industry as well as challenges and red flags.

Q22016

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Top 15 Pharma companies – Q1 2016 performance wrap-up

Wall Street

The Q1 2016 earnings season is now over. It is always nice to take a step back and compare the big names of the pharmaceutical industry.

Below you will find the key figures published by the most important companies in the industry.

Q1_2016.jpg

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Top 15 Pharma companies – 2015 performance

Oldremedies

Nearly all of the companies already published their 2015 financial results. Performances varied widely and some clearly outperformed others as in any industry.

The 2015 best company is Gilead: what an amazing performance! In less than 2 years, it reached the Top 15 Pharma companies. More than USD 19 billion of sales had been generated from Harvoni and Sovaldi, both disruptive drugs against hepatitis C. 58% of 2015 sales came from those 2 products. Diversification will be the next challenge for the company.

The table below summarizes the main financial data points for 2015:

2015_Top15Pharma

Teva has not yet published its results at the time of my post. I’ll update it later on.

*For Takeda, the company released only its 9-month results and for comparison purposes I extrapolated the 9-month into a 12-month period.

After populating the table, 2 aggregates have been computed:

  • Total sales in 2015 from Top 15 Pharma companies: USD 487 billion
  • Total R&D expenditures in 2015 from Top 15 companies: USD 82.5 billion

All in all, the big names of the industry spent close to 17% of their sales in research and development.

When we look at the 4th column in the table, year over year growth in constant currencies is between 0 and 8% apart for 2-3 companies like AbbVie (linked to the Pharmacyclics acquisition in May 2015), Bristol-Myers Squibb and Lilly.

Generally speaking, the pharmaceutical industry is still a cash-rich and good performing industry. More challenges will probably come from pricing pressures around the world (and this time not only Europe or Japan, but also from the USA).

 

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Big Pharma Q3 2015 Financial Results Wrap Up

WallStreet2

In the following table, the top pharma companies (ranked by 2014 annual sales) key stats for Q3 2015 are detailed in their reporting format and currency.

Currency  Q3 2015 sales (bn)  Growth yoy (CER)  Q3 2015 operating profit (bn)  Op Margin (%) Publication date
Novartis USD 12.30 6.0% 2.23 18.2% 27.10.2015
Pfizer USD 12.09 4.0% 3.28 27.1% 27.10.2015
Roche CHF 11.78 5.0%  Undisclosed 22.10.2015
Sanofi EUR 9.59 3.4% 2.78 29.0% 29.10.2015
Merck & Co. USD 10.07 2.0% 2.34 23.2% 27.10.2015
Johnson & Johnson USD 17.10 0.8% 4.80 28.1% 13.10.2015
GlaxoSmithKline GBP 6.13 9.0% 1.72 28.0% 28.10.2015
AstraZeneca GBP 18.31 0.0% 4.56 24.9% 05.11.2015
Gilead Sciences USD 8.30 Undisclosed 5.59 67.3% 27.10.2015
Takeda JPY 904.00 3.8% 110.40 12.2% 30.10.2015
AbbVie USD 5.94 26.2% 1.89 31.7% 30.10.2015
Amgen USD 5.72 16.0% 2.34 40.9% 28.10.2015
Teva USD 4.82 -7.3% 1.55 32.1% 29.10.2015
Lilly USD 4.96 10.0% 0.96 19.4% 22.10.2015
Bristol-Myers Squibb USD 4.07 11.0% 0.99 24.3% 27.10.2015
Bayer Healthcare EUR 5.65 10.9% 1.22 21.6% 29.10.2015
Novo Nordisk DKK 26.79 20.0% 11.98 44.7% 29.10.2015
Astellas JPY 687.50 15.7% 145.17 21.1% 30.10.2015
Allergan (former Actavis) USD 4.81 Undisclosed 1.94 40.4% 04.11.2015

Notes:

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Big Pharma Q2 2015 Financial Results Wrap Up

In the following table, the top pharma companies (by 2014 annual sales) key stats for Q2 2015.

Currency  Q2 2015 sales
(bn)
Growth yoy
(CER)
 Q2 2015 operating profit (bn) Op Margin (%) Publication date
1 Novartis USD 12.69 6.0% 2.28 18.0% 21.07.2015
2 Pfizer USD 11.85 -7.0% 3.68 31.1% 28.07.2015
3 Roche CHF 11.75 7.0% 3.86 32.8% 23.07.2015
4 Sanofi EUR  9.38 4.9% 2.57 27.4% 30.07.2015
5 Merck & Co. USD 9.79 -11.0% 1.74 17.8% 28.07.2015
6 Johnson & Johnson USD 17.79 -8.8% 4.92 27.6% 14.07.2015
7 GlaxoSmithKline GBP 5.89 7.0% 1.35 22.9% 29.07.2015
8 AstraZeneca GBP 6.31 2.0% 1.81 28.7% 30.07.2015
9 Gilead Sciences USD 8.13 26.1% 5.62 69.1% 28.07.2015
10 Takeda JPY 446.30 6.1% 49.60 11.1% 30.07.2015
11 AbbVie USD 5.48 19.4% 1.85 33.8% 24.07.2015
12 Amgen USD 5.37 4.0% 2.08 38.7% 30.07.2015
13 Teva USD 4.97 -2.0% 1.61 32.4% 30.07.2015
14 Lilly USD 4.98 1.0% 0.80 16.1% 23.07.2015
15 Bristol-Myers Squibb USD 4.16 7.0% 0.05 1.2% 23.07.2015
16 Bayer Healthcare EUR 5.91 28.0% 0.95 16.1% 29.07.2015
17 Novo Nordisk DKK 27.06  25.0%  12.48  46.1% 06.08.2015
18 Astellas JPY 343.66 16.4% 67.82 19.7% 31.07.2015
19 Allergan
(former Actavis)
USD 5.73 Undisclosed  2.50 43.6% 05.08.2015

Notes:

– For Roche the operating profit figure is an estimate as the company only published sales for Q1.

– It should be named Q1 for Japanese companies as the majority of them has a fiscal year ending in March.

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Hacking the Human OS – IEEE

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A mind-blowing report from IEEE about the human body’s operating system

Can we harvest digital health data from trackers and sensors to improve our health and well-being? I summarized below what you will find on the IEEE dedicated web page. I was amazed by the variety and depth of all the innovations presented in these pages. Some of them have certainly the power to be game changers in the health care world. I’m looking forward to seeing all the advances coming to life!

Reading the Code

Several technologies are close to the market and will help us monitor our health. A very good example is the biostamps developed by John Rogers from the University of Illinois. These tiny, stretchable and skin-like sensors are able to send information and data to our smartphone alerting us whether something is happening in our body. More and more complex data could be sensed such as blood oxygen, blood glucose and even muscle weakness or sleep patterns.

Another fascinating example that could change the life of Type 1 diabetes patients is the artificial pancreas. It links “data from an implanted blood-sugar sensor to a computer, which then controls how a pump worn on the hip dribbles insulin under the skin through a pipette. In its fully realized form, the machine would take the patient out of the decision-making loop”. Advanced versions of the system are currently in clinical trials. Continuous monitoring is a huge advance in the field of disease management. It could strongly lighten the daily burden of each patient.

Another field where wearable are very popular: athletes. They are always eager to test the last innovation in the wearables arena. Physiological measurements can be extremely useful to optimize training and rest periods, improve performance and avoid injuries. Sleeves, wristbands, sensors equipped with highest technology can really make a difference in the way we monitor and track performance.

A device rapidly diagnosing any medical condition or disorder… Sounds like science fiction, right? Like in Star Trek… Some of you may recall the tricorder. And guess what? It’s about to become reality thank to a competition launched by Qualcomm. 300 teams registered, 10 finalists which are about to deliver their prototypes very soon. Once the winner has been chosen, real life clinical trials will start and we will know if it’s really working as expected. It’s a huge step forward as it will allow the diagnosis (and maybe the start of a treatment) for a lot of people, not only in US or Europe but also in emerging countries where the lack of medical infrastructure is killing human beings…

 

Analyzing the Code

Technology companies showed their interest in healthcare only recently… It’s welcomed because without technology you cannot do anything with data sets. However, some people are afraid of their data becoming public and being hacked. I think that between these two extreme opinions, we can take the good from both sides and see what this can bring us. “Apple, Google, Microsoft, and Samsung, have all launched e-health initiatives, mostly based around smartphones and wearables. Indeed, the fast-growing health care business would seem a natural next step for the tech giants”. A lot of deals have been signed between pharmaceutical companies and technology firms: Google and Novartis; IBM, Apple, Medtronic & JNJ… These are deals to follow in order to analyze the outcomes. Great initiatives could really emerge and I think we are at the beginning of a new era!

Long term analysis could help us understand in a more detailed way how we get sick, how the disease develop and how we could have anticipated it by looking at biomarkers trends.

The new era of precision medicine is making a big difference for patients. An open-source platform has transformed the way patients are being treated. Surgery is not always the best option in oncology for example and sometimes drug treatment is much more effective. A thorough and careful analysis of all the parameters will help doctors taking the right decision for the right patient at the right time.

Real-time epidemics modelling could have saved lives. Building treatment centers at the right locations, anticipating the spread of the disease (in this case, Ebola) and how to limit the contagion were several of the criteria used to run the model. We will never know what would have happen without such a model but globally we can say that modelling is critical in disease management. Additionally, it is not the use of a single model that will be helpful but the customized and accurate modelling for each and every epidemic, according to its characteristics.

 

Changing the Code

Performing surgical interventions at very small scales is becoming a reality. “Thanks to developments in microfabrication and other areas, researchers are pushing the limits on the size and capabilities of objects small enough to move through the human body”. “With the right design, researchers say, a microrobot—or a swarm of them—could deliver a highly targeted dose of drugs or radioactive seeds, clear a blood clot, perform a tissue biopsy, or even build a scaffold on which new cells could grow”. For the time being, tests have only been run in animals.

A new emerging medical field: electrical therapy. Vagus nerve stimulation has the potential to treat several conditions from migraine to asthma, even immune diseases. Progress is very slow and several failures have made history… but new startups are created and renew the interest in this type of technology.

W like Watson, the digital MD. Watson is based on machine learning: “bringing together computer scientists and clinicians to assemble a reference database, enter case studies, and ask thousands of questions. When the program makes mistakes, it self-adjusts. Researchers also evaluate the answers and manually tweak Watson’s underlying algorithms to generate better output. Here there’s a gulf between medicine as something that can be extrapolated in a straightforward manner from textbooks, journal articles, and clinical guidelines, and the much more complicated challenge of also codifying how a good doctor thinks.” Progress is under way.

 

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GSK and Novartis complete deals to reshape both drugmakers – Reuters

GlaxoSmithKline and Novartis completed their asset swaps

PuzzleGlaxoSmithKline and Novartis said they had completed a series of asset swaps worth more than $20 billion that will reshape both drugmakers. GSK is forming a consumer health joint venture with Novartis, while at the same time buying the Swiss company’s vaccines business and divesting its cancer drugs portfolio to Novartis. The two companies originally announced the transactions in April 2014 to bolster their best businesses and exit weaker ones as the drugs industry contends with healthcare spending cuts and increased generic competition. More details