Evaluating Late-Stage Pipelines and Potential

Will 2011 be a more promising year for new molecular entities? A review of Big Pharma's late-stage pipeline shows what might lie ahead.
Feb 02, 2011
Volume 35, Issue 2

How robust is the pipeline of the pharmaceutical majors? That is the crucial question not only for the pharmaceutical majors but also for emerging pharmaceuticals that rely on licensing or product acquisition by the large pharmaceutical companies to fund their development efforts.

The numbers

The well-chronicled problem of a lack of strong recent product innovation, combined with greater incursion of generic drugs, paints a pessimistic outlook for prescription-drug sales by the pharmaceutical majors. A recent analysis by the market-research firm Datamonitor estimates that growth will slow to 1.3% to 2015 for the branded prescription pharmaceutical industry's leading companies. In contrast, between 2003 and 2009, these same companies had sales growth at a compound annual growth rate (CAGR) of 7.1%. Sharp declines in branded sales following the loss of patent exclusivity will drive the decline in growth.

Patricia Van Arnum
"The difficulty in developing new products, particularly those that can generate sufficient sales to compensate for blockbuster expiries, has compounded this problem," said Simon King, pharmaceutical company analyst at the market research firm Datamonitor, in a Jan. 20, 2011, press release. "This has driven a steady shift away from blockbuster-centric growth strategies toward diversification into other areas of the market." Datamonitor predicts that those companies insulated from generic competition or those able to offset generic-drug incursion from revenue growth sourced from a high biologics focus or the targeting of niche indications and areas of high unmet need will be the best performers."

Datamonitor projects that Bayer, Novartis, Roche, and GlaxoSmithKline will be the only Big Pharma companies generating above average growth through the period to 2015. Of 43 branded companies examined in detail by Datamonitor, 11 are expected to report negative sales CAGR during the period to 2015. Of those expected to deliver positive sales CAGR, only six will exceed the 7.1% average shown between 2003 and 2009.

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