Top pharmaceutical and biotech companies will face a major decline in sales growth up to 2014, according to a new report.
However, those companies that have been able to diversify into biologics, niche products and generics will still enjoy positive growth, says business analyst Datamonitor.
The report, Pharmaceutical Company Outlook to 2014, considers the forecast performance of the world’s biggest pharma and biotech companies, termed the “PharmaVitae Universe”.
The analysis reveals prescription sales are expected to rise at a compound annual growth rate (CAGR) of 1.2% up to 2014, compared to a historical growth rate of 10.5% over 2002–08. The report blames patent expiry and generic competition for this sharp decline.
“The major obstacle to the PharmaVitae Universe’s continued expansion is undoubtedly the growth of the generics market, eroding sales of major brands and market value. While this will directly impact products facing patent expiry, there will also be an indirect impact to patented brands as they are forced to compete with alternative generics,” said Rebecca Whitham, Datamonitor Analyst.
However, the report forecasts that several companies will outperform the PharmaVitae Universe average growth rate, particularly those that have diversified into the biologics sectors of monoclonal antibodies and therapeutic proteins. Datamonitor expects Roche, for example, to benefit from its early move into the monoclonal antibody market due to the sector’s high growth.
Mid-sized companies Gilead, Actelion and Celgene are also expected to achieve double-digit CAGRs, due to their strategy of targeting niche indications and areas of high unmet need. In addition, the report points out, companies such as Novartis that have developed their own generic presence will benefit from the growth in this market.
Other companies will weather the storm through mergers and acquisitions. “Where M&A has acted as the PharmaVitae Universe’s biggest growth driver over 2002–08, this unknown quantity will likely continue to play a key role in driving company performance going forward,” concluded Whitham.
“Despite bearing the impact of generic competition to some of the world’s biggest pharmaceutical brands, the large-scale M&A witnessed in 2009 will see Pfizer-Wyeth and Merck-Schering-Plough become the first and second largest companies within the PharmaVitae Universe by 2014.”
The report Pharmaceutical Company Outlook to 2014: Analysis of the Top Pharma and Biotech Companies examines the forecast performance of the world’s 43 biggest pharmaceutical and biotechnology companies according to 2008 prescription pharmaceutical revenues.