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Pharma Patent Expirations/Novartis to top pharma sales league by 2018
 
 
  pharmatimes World News | June 14, 2012

More than $290 billion of drug sales are at risk from patent expiries over the next six years, a period which will see Novartis become the world's biggest pharmaceutical company.

Those are some of the views of research company EvaluatePharma which has released its World Preview 2018 report looking at, among other things, how the patent cliff will reshape the industry over the next six years. It states that the market for prescription drugs, based on the consensus forecast for the leading 500 pharmaceutical and biotechnology companies, will grow by 3.1 % per year between 2011 and 2018 to reach $885 billion.

The EP report also claims that "in the race to become the top pharmaceutical company, in terms of total prescription drug sales, Novartis will emerge as a clear leader in 2018", with turnover forecast to reach $51.3 billion by that year. That is $3 billion ahead of its closest competitors, Pfizer and Sanofi (in a previous analysis, EP said the French drugmaker would knock the US behemoth off the top slot in 2012, a position Pfizer held for nine years, and retain that position until at least 2016).

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The researchers expect Gilead Sciences to climb the most positions within the top 20, moving up seven places to number 15 with prescription sales of $15.1 billion in 2018. This will be driven by its strong HIV franchise and GS-7977, the hepatitis C product acquired through the firm's $11 billion buy of Pharmasset.

The report also argues that Merck & Co's type 2 diabetes therapy franchise of Januvia (sitagliptin) and Janumet (sitagliptin plus metformin) will be the largest global brand in 2018, with sales forecast showing a 10% compound annual growth rate between 2011 and 2018 to reach $9.7 billion in sales. It also suggests that anticoagulants are set to record the highest growth in terms of therapeutic area.

The analysis goes on to claim that the pharmaceutical industry has spent $1.1 trillion over the last 10 years on R&D. Anthony Raeside, EP's head of research, notes that "with hindsight this appears to be an inefficient use" of the surplus cash from previous blockbusters, stating that "it is often said there is an R&D productivity issue, but is it just poor portfolio strategy and investment choices? Is too much money being spent chasing too few quality R&D projects"?

He cites the case of AstraZeneca, which has had "a string of high-profile R&D disappointments in recent years " and is "so poorly rated by the stock market that the current market capitalisation of $50 billion is 30% lower than the company's aggregate value of its entire portfolio of products at $72 billion".

Mr Raeside concludes by saying that "the patent cliff is generally portrayed as a bad event for the Industry, but it may turn out to be a good event, with companies feeling liberated from the mega blockbuster curse of replacing aging cash flow streams". However, the industry "will continue to be plagued by poor R&D productivity and shareholder return" until the management of the companies "holding the new wave of blockbusters are incentivised around total shareholder return and efficient company risk".

 
 
 
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