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

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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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Advances in Oncology Drug Discovery – Sachs Conference Talk by Roche pRED Head of Oncology DTA, William Pao

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A fascinating talk about cancer drug discovery was given by Dr. William Pao, Head of Oncology Discovery and Translational Area (DTA) at Roche Pharmaceutical Research and Early Development (pRED) during the Sachs 16th Annual Biotech in Europe Forum.

He started to explain what is cancer, for us to gain more insights:

  • cancer is a genetic disease: tumors can harbor over 400 somatic mutations
  • cancer is heterogenous: there are more than 200 types of cancers and a single patient tumor displays intra and inter-tumoral heterogeneity
  • cancer can metastasize: once spread, it is virually incurable. Metastatic cancer survival at 5 years is extremely low (between 4 and 28%)

Based on those considerations, treatment is becoming much more complex today with a blend of chemotherapy, targeted medicines and immunotherapies. A right combination could extend survival by several months.

But how to develop drugs with increased efficacy against the smart strategies used by the disease (such as tumor angiogenesis)? According to Dr. Pao, 3 elements are necessary:

  • understanding disease biology as well as druggable targets in the complexity of cancer molecular pathways
  • developing fit-for-purpose molecules allowing to create the right drug with the right format against the right target
  • personalizing healthcare with the administration of the right drug to the right patient at the right time

Beyond a better understanding of the disease, using more than a single strategy to target the cancer:

  • Host directed with cancer immunotherapy. This approach is particularly challenging as some patients do not respond to it (innate or acquired immune escape) and other patients may fully benefit with long term survival
  • Tumor directed with targeted medicines

External innovation, collaborations and partnerships, is fully leveraged in order for Roche to complement existing capabilities in the field (immunotherapy examples: CuraDev, Pieris, BluePrint; targeted medicines: Tensha, C4Therapeutics).

As a conclusion, Roche is well positioned to address the cancer challenges and, since the beginning of innovative cancer treatments, the company has always been perceived as the leader of the therapeutic area.

addressingcancerchallenge

Missing points in his talk were considerations of patient’s quality of life (extending life does not always go with good quality of life because of treatment’s side effects) and drug pricing (adding more and more drugs to the treatment cocktail costs a lot of financial resources, not only paid by the health insurance but also by the patient).

 

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DNA methyltransferase 1 has a role in the establishment and regulation of tissue-specific patterns of methylated cytosine residues. Aberrant methylation patterns are associated with certain human tumors. www.enzymlogic.com. Work done with the molecular visualization VMD program developed at the University of Illinois: www.ks.uiuc.edu/Research/vmd/

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.

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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

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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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