Recently a top 10 drug list was forecast for the year 2014. 5 years down the road. So lets take a look at them. The list was provided by Evaluate Pharma and its a great tool for forecasting stock futures. The list is not perfect. The ones at the top tend to stay there for a reason. Nonetheless, I like the forecast. It's heavy on the Biotech sector and most on the 2014 forecast list are Cancer Therapeutics. Biotech is set to go from 28% of sales today to close to 50% in 2014. Seven of the top 10 drugs in 2014 are forecast to be biotech in origin. This is especially important with pharmaceuticals as biologics are hard to make into generics.
Patent law changes could occur and drug makers are forced to come up with new ways to generate profit. So it's really important to forecast when patents expire and also include generic makers into this list. Teva, Watson(WPI), Mylan(MYL), , K-V, Hi-Tech(HITK), Caraco(CPD), and Sandoz are some of the major generic makers today. Projected sales for the year 2012 are around $30 Billion. My only problem with generic makers, recently has been their quality contol issues. Both Mylan and Caraco have had major setbacks with the FDA this year. If they can control this they should be fine. Often quality control issues and deviations can really hurt companies and must be addressed quickly and ethically.
Major hits to big pharma include the following.
Launched: January 2005
2008 sales: $900 million
Branded equivalent: Duragesic, by Janssen (JNJ), 2008 sales of $1.1 billion
2. Amlodipine besylate and benazepril hydrochloride---Teva
Launched: July 2007
2008 sales: $779 million
Branded equivalent: Norvasc, by Pfizer (PFE, Fortune 500), 2008 sales of $2.2 billion
3. Metoprolol succinate---K-V
Launched: May 2008
2008 sales: $675 million
Branded equivalent: Toprol, by AstraZeneca (AZN), 2008 sales $807 million
Launched: February 2005
2008 sales: $671 million
Branded equivalent: Lamictal, by GlaxoSmithKline (GSK), 2008 sales $1.6 billion
Launched: July 2008
2008 sales: $609.8 million
Branded equivalent: Prilosec, by AstraZeneca, 2008 sales $1.1 billion
7. Azithromycin---Teva, & Sandoz
Launched: November 2005
2008 sales: $599 million
Branded equivalent: Zithromax, by Pfizer, 2008 sales $429 million
8. Budeprion---Anchen, IMPAX Laboratories, & Teva (Joint Effort although new lawsuit pending)
Launched: December 2006
2008 sales: $521 million
Branded equivalent: Wellbutrin, by Biovail (BVF), 2008 sales $579 million
With that said of generics, Big Pharma will find ways to address and consolidate their earnings, including buying up generic makers. The next wave of mergers could be in the generic industry. We will have to see. But biologics are where the future lies. Biologics are tough to reproduce and Big Pharma is finding ways to improve their current patents and processes.
One example that I have seen is Talecris' viral inactivated therapeutics of some of thier processes to insure safety of their product and essentially marketability. If Big Pharma can make ways to improve their medication then they can keep making a profit. Look for Talecris' IPO in the near future. Their products are derived from Human Blood Plasma. The various proteins extracted from plasma can be used to treat a variety of diseases including immune deficiencies, genetic emphysema, and hemophilia. This viral inactivation process is key to their marketability and profits. Check out their pipeline at the following link: http://www.talecris.com/talecris-research-development-pipeline.htm
Now its charts charts and more charts. But the charts should help you in your forecasting for your own stocks. I like Roche,Novartis and Pfizer. I also think that Merck will be a huge player in the future with the acquisition of Schering-Plough and Schering's recent acquisition of Organon Biosciences. Schering has added a nice pipeline with their acquisition and now Merck will reap the benefits of this. Do not forget to look at the top 10 R&D chart. It's key to understanding and forecasting. Blockbusters can be made overnight through good R&D.
The Roche-Genentech takeover will be huge as Biologics will become the drugs of the future. Genomic science is key to understanding and creating new drugs and Genentech is king in the Genomic world. The only shocker that could top Roche would be a Merger between Pfizer and Novartis. Or really Novartis and anybody in the top 10. Pigs will fly and OJ will go to jail. Oh wait OJ is already in jail. Lets just wait and see.
NOTE: Click on the Chart If It Is Hard To See.
Here are the top 10 products by sales for 2008
And now here are the top 10 products forecast for 2014
Top Drugs and their estimated expiration date through 2012
Top 15 Companies estimated from 2007 for 2014
Top 10 Oncology Sales from 2007 forecast for 2014
Top 10 Research and Development by Therapeutic Area