It's not exactly news, but some useful detail here -
New research shows that pharma R&D pipelines currently hold 18 potential blockbusters.
Many current blockbusters are due for patent expiry, and so new drugs are needed to replace them. Some firms, like AstraZeneca (LSE: AZN.L) , are in a strong position to do this. However, five top tier companies - including Roche and J&J - currently have no late stage development potential. To keep growing, they will need to source new drugs through in-licensing or M&A.
According to Datamonitor's new brief, The New Generation of Blockbusters: Pipeline Potential 2002-08", current pharma R&D pipelines hold 18 blockbusters that will be worth an estimated $24 billion by 2008.
The new drugs are sorely needed: 15 of the 44 current blockbusters will lose US patent protection before the end of 2002, affecting approximately $30 billion of revenues. Pharma companies need to replace these products with a new generation of revenue drivers.
Some companies will meet this challenge. For example, AstraZeneca will have three new blockbusters with total sales of $7.2 billion by 2008 - more than making up for the revenue loss following the patent expiry of its major blockbuster Losec (omeprazole). And Eli Lilly's strong pipeline should make up for the patent loss of Prozac.
However, five top tier pharmas - Johnson & Johnson (NYSE: JNJ - news) , Aventis (Paris: 13046.PA - news) , Pharmacia (NYSE: PHA - news) , Roche and Wyeth (NYSE: WYE - news) - do not have any late stage blockbuster products, despite investing over $1 billion in R&D in 2001. This isn't a disaster for Pharmacia: it will be boosted by the recent launch of Bextra, the successor to arthritis blockbuster Celebrex, and it has a strong portfolio of patent protected growth drivers in place.
Aventis' situation is weaker. Its inhalable insulin Exubera, in co-development with Pfizer (NYSE: PFE ) and Inhale, has been hit by development delays and disappointing trial results. Worse, GlaxoSmithKline (LSE: GSK.L) and Nobex's new oral insulin could slash the compliance advantages of inhalable products.
Johnson & Johnson, meanwhile, looks unlikely to repeat its leading ethical sales growth of 2001 if it is unable to source new blockbusters. The company should consider looking externally to source new products with further M&A a possibility.
For troubled Roche, meanwhile, M&A may be the only way out. With a portfolio over-dependent on revenues from its part ownership of Genentech (NYSE: DNA ) , Roche has little to offer from its pipeline. It should invest some of its multi-billion dollar cash pile in new products or in a more R&D focused partner.
Related research: Datamonitor, 2002: "The New Generation of Blockbusters: Pipeline Potential 2002-08" You can download a FREE healthcare report at www.dmfreereports.com |
