FirstWord List: Top 15 pharma and lead product dependency

In 2013, the 15 largest global pharmaceutical companies generated on average a quarter of their prescription pharmaceutical revenues from the biggest selling product franchise in their portfolio.

Teva and AbbVie are the most reliant players on a single drug franchise, generating 79 percent and 57 percent of their innovative prescription sales from the Copaxone (multiple sclerosis) and Humira (various inflammatory conditions) brands, respectively.

Clearly in Teva's case there is a major caveat at play; branded prescription sales account for a notably smaller proportion (47 percent) of the company's total revenues versus its peers in the global top 15. Nevertheless, the importance of Copaxone to Teva cannot be understated, both in terms of leveraging sales and profitability, and its future commercial performance remains key to the company.

See Physician Views Poll Results – Neurologists expect significant share gains for any generic Copaxone launch.

AbbVie's high level of dependence on Humira has been noted in particular since the company was spun out of Abbott at the beginning of last year. AbbVie appears to be making positive strides in delivering new products from its pipeline in both hepatitis C and chronic lymphocytic leukaemia (CLL). However, thanks to the robustness of the Humira franchise – sales are forecast to peak at $15.3 billion in 2018, according to Bloomberg – it will continue to dominate AbbVie's revenue line for the foreseeable future (accounting for 59 percent of sales in 2018).

A notable factor in prolonging the commercial lifespan of Humira is the product's biologic status, a consideration that shapes lead product dependency at Amgen (Enbrel), Johnson & Johnson (Remicade) and Roche (Rituxan). The Swiss company is a positive outlier in this respect, given that Rituxan represents one of a handful of high-value biologic assets positioned across the oncology, I&I and ophthalmology segments, with Roche's pipeline promising further launches.

See FirstWord Lists – The biggest biologics – still growing, growing, growing...

A similar pattern is in evidence at Sanofi, where the company's long-acting insulin treatment Lantus now accounts for 25 percent of pharma sales and continues to grow at a steady pace (helped in part by setbacks to potential competitors such as Novo Nordisk's Tresiba and notable pricing elasticity in the US market). With competition poised to intensify in the next few years, however, the development of a more effective successor product – U300 – remains the company's most important pipeline catalyst in the eyes of many Sanofi investors.

See Physician Views Poll Results – Usage of Sanofi's U300 will not be limited to 'high-risk' Lantus patients, infer endocrinologists and ViewPoints: Only safety data will show if Eli Lilly has a Lantus-beater on its hands in diabetes.

The longevity and entrenchment of current leading respiratory franchises positions Boehringer Ingelheim and GlaxoSmithKline to be notably dependent on the Spiriva and Advair brands, respectively. Both companies have developed new respiratory products to enhance their position in this market ahead of patent expiration for their flagship products, with GlaxoSmithKline's overall focus on this therapeutic area also set to increase in light of the recent divesture of its oncology portfolio to Novartis.

Although exposure to sensitive – i.e. high revenue – patent expiries has diminished across the Big Pharma peer set in the past few years, a handful of the largest 15 players are most dependent on products that will lose exclusivity in the near future.

Eli Lilly (Cymbalta – patent expired in Q4 last year) and AstraZeneca (Crestor – 2016) most notably find themselves in this situation. Bloomberg consensus forecasts suggest that each company will lose sales of $6.9 billion and $5.2 billion over 2014-2018, respectively, primarily owing to loss of exclusivity for these drug franchises.

Consensus forecasts from Bloomberg actually indicate that a clutch of Big Pharma players in addition to Eli Lilly and AstraZeneca will suffer sizeable sales declines between 2014 and 2018, with GlaxoSmithKline (primarily due to Advair), Merck & Co., Novartis and Bristol-Myers Squibb all anticipated to record generic-induced revenue contractions in excess of $4 billion.

Clearly, how these companies compensate for such losses will strongly shape how the Big Pharma peer set evolves through to the end of the decade and will inform which key products companies become increasingly dependent on. Analysts are already, for example, indicating that Bristol-Myers Squibb's immuno-oncology asset nivolumab will account for a sizeable proportion of the company's revenues by 2020.

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