Data Editor, Pharma
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Latest From John Hodgson
Financial markets – the people and institutions that lend companies money and estimate their worth – see pharma companies as revenue-generating, profit-sharing black boxes. Growth earns companies a break from this simplistic view, but sooner or later market valuations of pharmas seem to regress to a mean based on revenue multiples. That mean is getting meaner.
A look at the companies we included in our analysis.
When Donald Trump said on Jan. 11 that the drug companies were “getting away with murder” on pricing, some took his words seriously. But his shapeless message had no meaning for the markets. Investors glanced up from their screens momentarily but they don’t believe he will do anything about drug pricing.
Five companies in big pharma’s top 20 have come through mergers in the past 10 years or so that changed them significantly. As measured by standard financial performance parameters, the processes at Takeda and Teva (and to some extent, at Allergan) seem relatively smooth and productive. Those at Pfizer and Merck don’t. But it depends on how you look at the numbers.
The pharma top 20 will not be definitively known until May when Takeda and Astellas publish their 2016 annual results, the last Big Pharma companies to do so. But for those who cannot wait until then (or even until Jan. 24 when Johnson & Johnson kicks the process off), Scrip’s ExtrapolaTable gives an early glance at the shape of pharma as another year rolls on.
Pharmaceutical revenues were down slightly; so was R&D spending, thanks to a strengthening dollar. Scrip analyzes 620 companies and uses numbers, clocks and tiers to paint some data pictures of the pharmaceutical industry in 2015.