Big Pharma Performance Before, During and Beyond the Global Recession

Introduction

This report assesses the performance of the leading 15 pharmaceutical companies up to, during and beyond the recent global recession. It places the pharma sector in the context of other major industry sectors and analyzes the internal dynamics behind pharmaceutical companies' performance.

Scope

*Cross-sector sales analysis before, during and beyond the global recession

*Assessment of high- and low-growth sectors of the prescription pharmaceuticals market

*Discussion of pharma's possible responses to slowing pharma sales growth rates

*Ranking of the top 15 pharma companies over 2005 to 2014

Highlights

The pharma landscape is being reshaped by expiries. This trend has already begun with expiries wiping -3.7 percentage points off the sector's 200508 sales growth rate, turning pharma into one of the slower-growing industry sectors.

The recession has provided some respite for pharma, giving it a stock market boost as it lived up to its defensive reputation and stood as the only sector to achieve positive sales growth. Nevertheless, this only masked the continual expiry-driven decline of pharma sales growth rates.

Between 2009 and 2014, the expiry burden will reach a tipping point, sending year-on-year pharma sales growth rates negative in 2012 and 2013. If pharma is to avoid a continuation of the 200508 stock market revaluation of its worth, it must take action.

Reasons to Purchase

*Assess pharma's sales and stock market performance in relation to other major industry sectors

*Evaluate the strategic shifts within the prescription pharmaceutical market and identify the high- and low-growth sectors of the industry

*Quantify the historical and forecast impact of generics on pharma's sales growth rate


Report Highlights

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List of Tables
Table 1: Cross-sector coverage 4
Table 2: Pharma sector coverage 6
Table 3: Pharma sales by lifecycle stage ($bn), 2009-14 11
Table 4: Pharma company sales growth ($m) by lifecycle stage, 2009-14 14
Table 5: Pharma company rankings, prescription pharmaceutical sales ($m), 2005-08 40
Table 6: Pharma company rankings, prescription pharmaceutical sales ($m), Q208-Q209 49
Table 7: Blockbuster product* patent expiries, 2009-14 52
Table 8: Pharma company rankings, prescription pharmaceutical sales ($m), 2009-14 56
Table 9: Post-M&A pharma company rankings, prescription pharmaceutical sales ($m), 2009-14 57
Table 10: Sector sales ($bn), 2005-08 65
Table 11: Sector sales ($bn), Q208-Q209 65
Table 12: Lipitor sales forecast ($m), unadjusted and expiry-less, 2008-09 69
Table 13: Bayer sales ($m), with and without M&A, 2005-08 69
Table 14: Sales growth ($bn) by molecule type vs. therapy area segment, 2002-05 70
Table 15: Sales growth ($bn) by molecule type vs. therapy area segment, 2005-08 70
Table 16: Sales growth ($bn) by molecule type vs. therapy area segment, 2009-14 70
Table 17: Exchange rates, 2009 72

List of Figures
Figure 1: Seasonally-adjusted US GDP growth rate, at annual rates (%), Q105-Q309 3
Figure 2: The PharmaVitae Explorer 7
Figure 3: Pharma market capitalization vs. S&P 500 (rebased), July 2005 to September 2009 10
Figure 4: Pharma sales growth rate (unadjusted and expiry-less) vs. the cross-sector average (%), 2005-14 11
Figure 5: Pharma sales growth by lifecycle stage ($bn), 2009-14 12
Figure 6: Company sales growth by lifecycle stage, percentage of 2009 sales (%), 2009-14 13
Figure 7: Molecule type vs. therapy area sector growth map, 2009-14 15
Figure 8: Strategic focus and growth rate by company, 2009-14 16
Figure 9: Strategic responses to falling sales and operating profit growth 17
Figure 10: Effects of acquisitions on Pfizer, Merck & Co. and Abbott's strategic focus and growth rate by company, 2009-14 18
Figure 11: Abbott-Solvay growth by geography (% of 2009 combined sales), 2009-14 19
Figure 12: Company growth rates, CAGR (%), prescription pharmaceuticals vs. other business units, 2009-14 20
Figure 13: Pfizer-Wyeth growth by business unit (% of 2009 combined sales), 2009-14 21
Figure 14: Operating profit growth ($bn), sales vs. operating margin, 2009-14 22
Figure 15: Pharma market capitalization vs. S&P 500 (rebased), July 2009 to September 2009 23
Figure 16: Company rankings by prescription pharmaceutical sales, 2005-08, Q208-Q209, 2009-14 and post-M&A 2009-14 25
Figure 17: Sector-by-sector sales growth rate, CAGR (%), 2005-08 29
Figure 18: Market capitalization growth rate (%), pharma vs. S&P 500, 2005-08 30
Figure 19: Pharma sales growth rate (%), reported and expiry-less, 2005-08 31
Figure 20: Sector-by-sector sales growth rate, CAGR (%), pharma unadjusted and expiry-less, 2005-08 32
Figure 21: Company sales performance by lifecycle stage, percent of 2005 annual sales (%),2005-08 33
Figure 22: Molecule type vs. therapy area sector growth map, 2005-08 34
Figure 23: Companies on the molecule type vs. therapy area sector growth map, 2005-08 35
Figure 24: Company sales growth rate, CAGR (%), 2005-08 36
Figure 25: USD vs. EUR, GBP, CHF and JPY (rebased), 2005 to H1 2008 37
Figure 26: Company growth rates, CAGR (%), adjusted for exchange rates and M&A, 2005-08 38
Figure 27: Strategic focus and growth rate (XR- and M&A-adjusted) by company, 2005-08 39
Figure 28: Sector sales growth (%), Q208-Q209 42
Figure 29: Pharma market capitalization vs. S&P 500 (rebased), Q208-Q209 43
Figure 30: Pharma sales growth rate (%), reported and expiry-less, 2005-Q209 44
Figure 31: Sector sales growth (%), pharma unadjusted and expiry-less, Q208-Q209 45
Figure 32: Company growth by lifecycle stage, percentage of 2008 sales (%), 2008-09 46
Figure 33: USD vs. EUR, GBP, CHF and JPY (rebased), Q208-Q209 47
Figure 34: Company sales growth, CAGR (%), exchange rate- and M&A-adjusted, Q208-Q209 48
Figure 35: Pharma sales growth rate (%), reported and expiry-less, 2009-14 51
Figure 36: Company growth by lifecycle stage, percentage of 2009 sales (%), 2009-14 53
Figure 37: Molecule type vs. therapy area sector growth map, 2009-14 54
Figure 38: Strategic focus and growth rate by company, 2009-14 55
Figure 39: Company growth rates, CAGR (%), 2009-14 58
Figure 40: Effects of acquisitions on Pfizer, Merck & Co. and Abbott's strategic focus and growth rate by company, 2009-14 59
Figure 41: Seven major market (7MM) sales vs. rest of world (RoW) ($m), 2005-14 60
Figure 42: Company growth rates, CAGR (%), prescription pharmaceuticals vs. other business units, 2009-14 61
Figure 43: Operating profit growth ($bn), sales vs. operating margin, 2009-14 62
Figure 44: Merger growth rates, CAGR (%), PFE-WYE, MRK-SGP and ABT-SOLV, 2009-14 63
Figure 45: Pharma market capitalization vs. S&P 500 (rebased), July 2009 to September 2009 64
Figure 46: Chicago Board Options Exchange's volatility index, 2005-09 66
Figure 47: Trade-weighted dollar index, 2002-09 67
Figure 48: Crude oil price*, dollars per barrel, 2001-09 68
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