Advertisement
*
Reproduction permitted for personal use only. For reprints and reprint permission, contact reprints@wistechnology.com.

Leading global Big Pharma companies of 2005

I always look forward to writing this particular article with great anticipation! Why, you say? It is part of an annual ritual that I have followed with eagerness as I grew up in the pharmaceutical industry, initiating in my 10 years at Pfizer (way before Pfizer was the juggernaut it is today). At Pfizer, we were all anxious to see the annual company ranking results to see how our company fared against our competition: had we moved up or down in the rankings! It was a source of great pride or angst! If your company had moved up in the rankings, you could gloat over the sales reps (known as "detailmen") in your territory. As I was the only American sales rep not only in Bogota, but all of Colombia, it was another differentiating factor (I was known as "el gringo de Pfizer" - the gringo from Pfizer) for me.

I was reminded of this ritual during a very recent trip to Brazil where I spent a week taking a group of exec MBA students from the Lake Forest Graduate School of Management to classes at the Sao Paulo School of Business.

The Brazilian pharmaceutical market, with sales of over $8.5 billion annually, is within the top 10 pharmaceutical markets in the world, and depending on the year, vies with Mexico for the top spot as the leading pharmaceutical market in Latin America. Brazil, which is the size of continental U.S., has 180 million people, and unlike the U.S. is oil independent! Brazil weaned itself off foreign oil by combining its own oil production with innovative use of ethanol (derived from improved biotech strains of sugar cane), and creating local cars that can switch from normal gas to ethanol-based gas easily.

As luck would have it during my Brazil trip, the local Pfizer headquarters was half a block from the Sao Paulo School of Business, and the Pfizer logo repeatedly stared me in the face. My luck must have been very strong as it turns out that the local president of Pfizer's operations was an old friend and colleague who was retiring from Pfizer the week that I was there, after 31 years with the company. In fact, he and I started at Pfizer the same year (wow, I was really feeling old).

As I toured Pfizer Brazil's offices, we were reminiscing of the old days when Pfizer's offices in most Latin American countries were usually located 45 minutes to an hour from city centers and were pretty utilitarian. This Pfizer office in Sao Paulo, in contrast, was magnificent (I have a feeling this magnificence was fueled by the success of Viagra in Brazil). My friend and I had not seen each other in 12 years when he was general manager for Pfizer in Colombia and I had been general manager for Monsanto's Andean business (also living in Bogota once again). This jolt to the past reminded me of my annual quest to know company rankings to see how my company was doing.
Advertisement
When I arrived back, going through my mail, I perused the latest edition (May 2006) of Pharmaceutical Executive, and there staring me in the face were the pharmaceutical company rankings for 2005: fate! So here goes:

Leading Pharma Companies in the World ($ Billions)

2005Rank2004RankCompany/Country2005 Global Pharma Sales ($ B)%Growth
11Pfizer (U.S.)$44.3<4%>
22GlaxoSmithKline (U.K.)$34.0+8%
33Sanofi-Aventis (France)$32.3<5%>
47Novartis (Swiss)$25.0+16%
56Astra-Zeneca (U.K.)$24.0+12%
64Johnson & Johnson (U.S.)$22.3+1%
75Merck (U.S.)$22.0+2%
8N/ARoche* (Swiss + Chugai)$15.7N/A
99Wyeth (U.S.)$15.3+10%
108Bristol-Myers Squibb$15.3<1%>
1111Eli Lilly (U.S.)$14.7+12%
1210Abbott Labs (U.S.)$14.0+16%
1313Amgen (U.S.)$12.0+13%
1414Boehringer Ingelheim$10.8+2%
1515Takeda (Japan)$8.5+3%
16N/AAstellas (Japan)**$8.0N/A
1716Schering-Plough (U.S.)$7.6+18%
1818Bayer (Germany)***$7.6+18%
19N/ADaiichi Sankyo****$7.3N/A
2017Schering AG (Germany)$6.3+3%
2122Genentech (U.S.)$5.5+46%
2225Novo Nordisk (Denmark)$5.4+1%
2319Eisai (Japan)$4.8<5%>
2420Teva (Israel)$4.7+10%
2521Merck KGaA (Germany)$4.6+21%
2624Otsuka (Japan)$3.3<11%>
2729Forest Labs (U.S.)$3.2+19%
2826Baxter International (U.S.)$3.0+11%
2931Akzo Nobel (Netherlands)$2.9+21%
3032Altana (Germany)$2.8+27%

Source: Pharmaceutical Executive, May 2006
* includes sales from acquisition of Japanese company Chugai but does not include sales from majority-owned position in Genentech
** merger of Yamanouchi and Fujisawa to become Astellas
*** does not include recently-announced acquisition of Schering AG
**** merger in September, 2005 of Daiichi and Sankyo

By the way, as a manner of comparison, let's take a look at the rankings of the pharmaceutical industry back in 1975, courtesy of Pfizer CEO Hank McKinnell's book A Call to Action, published last year.

  1. Roche
  2. Hoechst/Roussel (now part of Sanofi-Aventis)
  3. Merck
  4. Ciba-Geigy (now part of Novartis)
  5. Eli Lilly
  6. American Home Products (now Wyeth)
  7. Warner-Lanbert (now part of Pfizer)
  8. Sandoz (now part of Novartis)
  9. Pfizer
  10. Boehringer Ingelheim

Some observations, as always:

  • The sales reflected above only include Pharma (drug) sales; it does NOT include other sales that a company may have such as veterinary, medical devices, chemical, diagnostics, etc.
  • Mergers and acquisitions continue to be a main theme as companies jockey for position, geographic distribution, and new products. The latest this year is the Bayer acquisition of Schering AG for nearly $20 billion, stimulated by Merck KG's initial hostile acquisition offer for this company. Other acquisitions also took place during the year which we will analyze in a separate article.
  • American companies represent 12 of the top 30 companies (with combined sales of $179.2 billion), with Europe also having 12 companies (with combined sales of $171.4 billion), the Japanese with 5 companies (combined sales of $31.9) and Israeli with 1 company (Teva - the largest generic company in the world)
  • Two American biotech companies figure within the top 30 companies, Amgen and Genentech, with Amgen close to breaking into the top 10 companies although its growth is slowing down; Genentech continues to move up in the ranks and actually finished the year with a market cap higher than Amgen's - approaching $100 billion
  • The Japanese companies continue to globalize due to the weakness of their own home market and increased penetration by foreign companies there. This globalization is happening by waves of mergers with other Japanese companies (as opposed to acquisition of U.S. or European companies).
  • The Midwest had 3 companies in the top 30 companies, Eli Lilly, Abbott Labs and Baxter; however none of them ended the year in the top 10 companies.
  • Companies that seem to be targets for future acquisition activity are: Schering-Plough, Merck KGaA, as well as other Japanese companies struggling in their home and international markets. Belgium has two medium-sized companies, Solvay and UCB that might possibly make a good choice for one strong Belgium company, while there are also possibilities for further consolidation in Germany. Remember also that Novartis acquired an important chunk of Roche last year - both are located in Basel, Switzerland.

Research and development continues to drive pharmaceutical activity (and budgets). Let's take a look at what the big companies spent in R&D last year:

Leading Pharma R&D Budgets

2005 RankCompanyPharma R&D Spend ($ B)% of Sales
1Pfizer$7.416.7%
2Johnson & Johnson$6.328.3%
3GlaxoSmithKline$5.716.8%
4AstraZeneca$5.422.5%
5Sanofi-Aventis$4.814.9%
6Novartis$4.518.0%
7Roche (includes Chugai)$4.226.8%
8Merck$3.817.3%
9Eli Lilly$3.020.4%
10Amgen$2.319.2%
11Schering-Plough$1.925.0%
12Abbott Labs$1.812.9%
13Takeda$1.315.3%
14Wyeth$1.38.5%
15Genentech$1.323.6%
16Astellas$1.316.3%
17Daiichi-Sankyo$1.317.8%
18Schering AG$1.219.0%
19Boehringer Ingelheim$1.110.2%
20Bayer$1.114.5%
21Novo Nordisk$0.814.8%
22Eisai$0.714.6%
23Merck KGaA$0.715.2%
24UCB (Belgium)$0.625%
25Serono (Switzerland)$0.625.6%
26Baxter International$0.516.7%
27Akzo Nobel $0.517.2%
28Genzyme (U.S.)$0.520.8%
29Altana (Germany)$0.517.9%
30Mitsubishi$0.526.3%

Source: Pharmaceutical Executive, May 2006

Pharmaceutical R&D as a percent of sales is one of the highest of any industry and generally oscillates between 15-16%of sales with some companies spending as high as 27% (Roche) of sales and the lowest 8.5% (Wyeth).

Here in the Midwest, Abbott Labs at about 13% of sales is on the low side while Eli Lilly is aggressively investing (20% of sales); Baxter, at about 17% of sales, is just slightly above the average for the industry.

Note that, on average, 50% of a Big Pharma's R&D budget is being spent on the development of in-licensed drugs (from smaller companies), with some companies spending as much as 75-80% of their R&D budget on in-licensed drugs. This huge investment is due to the lack of innovation in their own internal R&D efforts, requiring these companies to actively search for new products from smaller companies (as well as drive further M&A activities).

In the next column, we will look at sales of the leading products and the top M&A transactions during 2005, but the above list gives you a good feel about how the major companies performed.

Pfizer, as king of the hill, seems to be struggling. My friend told me that it in spite of its worldwide dominance of the pharmaceutical world, it had lost the intimacy and collegiality of the old days, when everyone knew everyone else. Did Pfizer bite off more than it could chew by making two very large acquisitions in a span of 5 years? Yes, it has increased sales, and yes, it has downsized operations around the world after the acquisitions, but is it truly focused?

Evidence that it is not has surfaced in the last few months as Pfizer has put up its consumer products division on the block for sale. Pfizer also faces imminent generic competition for a number of its blockbusters, which could greatly diminish sales quickly. Hopefully, Pfizer will use its large cash horde to acquire additional products for its pipeline.

See you soon!

Michael S. Rosen is senior vice president of new business development for Science & Technology Group, which builds bio-parks across the U.S. and currently has bio-parks completed or under development in Cambridge, Baltimore, Chicago, Cleveland, and Denver. Rosen is also a founder and board member of the Illinois Biotechnology Industry Organization. He can be reached at rosenmichaels@aol.com

The opinions expressed herein or statements made in the above column are solely those of the author and do not necessarily reflect the views of The Wisconsin Technology Network, LLC. (WTN). WTN, LLC, accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Comments

jagdish junghare responded 7 years ago: #1

Sir,
As a surfer of this site i suggest to create separate web page for college student studying pharmacy.
Thank you

MAHESH responded 7 years ago: #2

very useful site . i am doing degree course in pharmacy.

rohit responded 7 years ago: #3

Fantastic stats and a very informative article. Its an article to be saved for an year till the next year similar article is posted.

Milton Fernandes responded 7 years ago: #4

Very good statistics and the information was very useful specially to Export Managers who try and promote their products internationally.

Pradeep Rawat responded 7 years ago: #5

Its an useful site to get updated about Pharma Industries.
Kindly send me newer updates on market trend acquisitions,Ranking etc.

Dennis responded 7 years ago: #6

Do you know where I could find such a ranking for the top 200? That would be very helpfull.
thanks

Satyanarayan Kurma responded 7 years ago: #7

Excellent site for pharma world to know where they stand.

Sanjiv Brigemohane responded 7 years ago: #8

I'm a pharmacist(MPharm) from Mauritius Island. I'm doing my MBA and I'm doing my dissertation on the creation of a Pharmaceutical hub in Mauritius. I'm doing a research on the African market. Can you send me some notes about the African market?

Derek responded 7 years ago: #9

I would also be interested in obtaining a list of top 200 pharma comapanies. Could you please let me know where I could find something like this?

anshu responded 7 years ago: #10

A very interesting article but it would have been more interesting if there had been a separate ranking for the top generic companies.

vikas Johri responded 7 years ago: #11

It's really nice site giving information about ranks and thier
R&D expenditure. Useful for me as I am in market research work.

venky responded 7 years ago: #12

It's nice to see the comparision. It's usefull to analyse market.

Deepak J responded 7 years ago: #13

Its a nice article. Sales figure of each compay w.r.t some blockbuster drugs could have made this statistic even more interesting.

BIPIN PRASAD GUPTA responded 7 years ago: #14

Information is really informative, but I would also suggest if you give some information on emerging companies which are developing fast.

Ahmed Mansour responded 7 years ago: #15

When will this ranking be re-published?
Is it an indicator when applying for medical rep. positions?

Narasimha Reddy responded 7 years ago: #16

Fantastic stats. Very useful historics too. I am an industry analyst from India.

Vijay Kumar Bonagiri responded 7 years ago: #17

This is very informative. Can you send me the latest information on this article?

mazhar irfan responded 6 years ago: #18

Very informative. Please add latest data as well.

santosh avhad responded 6 years ago: #19

It's a useful need to at least the top 50 companies.

samit kumar bez responded 6 years ago: #20

Excellent information with adequate analysis.

syed imran ali responded 6 years ago: #21

Excellent information provided. Can you present the information country wise?

abhishek harde responded 6 years ago: #22

Hello sir,

I am M.PHARMA. & doing M.B.A FROM NIPER, (NATIONAL INSTITUTE OF PHARMACEUTICAL EDUCATION & RESEARCH), INDIA. I am doing my project on "CANADIAN GENERIC PHARMA INDUSTRY & REGULATIONS." Can you send me information regarding the topic above menioned, please. I'll be pretty much thankful to you for that.

subramani responded 6 years ago: #23

Can you send me the latest statistics for Indian scenario, please?

sudhish sharma responded 6 years ago: #24

It's really nice site giving information about ranks and their R&D expenditures. That would be very helpful.

Thanks.

yogesh negi responded 6 years ago: #25

The perfect site for the youth trying to explore the global pharmaceutical scenario.

Avinash responded 6 years ago: #26

Sir,

This site is vary useful. Please update the ranking and a separate column for the Indian pharma.

vishal k shah responded 6 years ago: #27

the most creative article for global pharma .

Arefin responded 6 years ago: #28

Good but there should be more data.

Venkateshwarlu.P responded 6 years ago: #29

vary useful site update the ranking separately with respect to the contry.

shantanu responded 6 years ago: #30

I am a medical rep. in GSK .i find this site very useful.kindly send me a copy of pharma rankings per month.

sudhanshu kumar mishra responded 6 years ago: #31

i am a management student and i wnat to make career in pharma line.this information is very useful in my career.i request to you please send me all data related with pharma line on my email address. thank you.......

Karan mattu responded 6 years ago: #32

sir, it is very usefull site for pharma people, as it gives important statics of phrma .

Karan mattu responded 6 years ago: #33

sir, I am a med. representative in Emcure, plz can you give me recent ranking of pharma industery,I will be very thankfull. thanks.

parthasarathi mukherjee responded 5 years ago: #34

Please send me d details every day. I will be highly obliged. thanks.

Abhi responded 5 years ago: #35

At a time I am a B.Pharmacy student i want to know about MBA & m pharma .&which corse are prefered to me, at a time every college give M pharma degree so it's repotation is blow down

nikku yadav responded 5 years ago: #36

plz sir update the site n send me detail at every update

praveen responded 5 years ago: #37

sir,i m M.Parmacy student.can u provide me companies details which allows students to do projects in analysis

Nawaraj Mani Subedi responded 4 years ago: #38

Do update this data. If possible every year.
Thanks for such a informative data analysis.

-Add Your Comment

Name:
E-mail:

Comment Policy: WTN News accepts comments that are on-topic and do not contain advertisements, profanity or personal attacks. Comments represent the views of the individuals who post them and do not necessarily represent the views of WTN Media or our partners, advertisers, or sources. Comments are moderated and are not immediately posted. Your email address will not be posted.

WTN Media cannot accept liability for the content of comments posted here or verify their accuracy. If you believe this comment section is being abused, contact edit@wistechnology.com.

WTN InGroup
Advertisement
Madison High Tech Directory

-More Stories

WTN Media Presents