Big Pharma – Where Are We Now?

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In this article, I want to revisit an article I wrote two years ago titled, “The Calm Before the Storm.” My article was focused on the patent cliff that was looming, that was later picked up by the New York Times and several other bloggers! Subsequent articles were about big pharma companies, their revenue streams, and the pros and cons of much of their later stage pipeline. My other articles have noted smaller biotechs with the potential to reap big rewards, and possible acquisition candidates by those big pharma companies that need to fill their coffers with new, multi-billion dollar drugs -the so called blockbusters.

Forbes has a good article projected three different scenarios, but the one that stands out to me is the last figure (below) showing if all things adding up together, who weathers the storm?

In the ‘Storm’ article, it is noted that pharma growth rates should be growing less or starting to stall into 2014 due to the patent cliffs (see Table 1). A few examples slow growing revenue streams are (2010 -2011): Pfizer $67.1B to $67.4B; Merck $46B to $48B, JNJ $62B to $62B, and AMGN $15.1 to $15.5.

There are two ways that pharma companies can grow, acquisitions or internal innovation. In…