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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  GlobalData Plc    DATA   GB00B87ZTG26

GLOBALDATA PLC

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GlobalData : 17 of 20 top pharmaceutical companies be revenue reported YoY growth in 2019, says GlobalData

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08/06/2020 | 10:04am EDT
06 Aug 2020
17 of 20 top pharmaceutical companies be revenue reported YoY growth in 2019, says GlobalData
Posted in Business Fundamentals

As another great year for the innovation bio/pharma industry, 2019 saw 17 of the top 20 mega cap players reporting YoY revenue growth, according to GlobalData, a leading data and analytics company.

Madeleine Roche, Associate Pharma Analyst at GlobalData commented, 'One winner was Takeda, which saw more than 50% YoY revenue growth. The company's significant increase in revenue - 56.9% to $29.69bn - was driven by its acquisition of Shire in January 2019, which gave the company wider geographical reach and an expanded rare disease portfolio.'

Another winner, Bayer, saw a revenue increase of 18.5% due to an acquisition of agriculture biotechnology company Monsanto, along with strong drug sales and pipeline growth. Meanwhile, Bristol Myers Squibb (BMS) recorded a revenue growth of 15.9%, due to its acquisition of Celgene in November 2019 and due to strong sales of Eliquis (apixaban) - a small molecule for cardiovascular indications - and Opdivo (nivolumab) - a monocolonal antibody for oncology.

Roche continued: 'A total 14 of the top 20 companies indicated revenue growth over the past five years, with Takeda (16.2%) and BMS (12.1%) recording a compound annual growth rate (CAGR) of more than 10% in revenue since 2015 due to their series of inorganic and organic growth initiatives.

'Pfizer, Amgen and Astellas Pharma reported revenue decline of 3.5%, 1.6% and 0.4% respectively in 2019. The decline in revenue for Pfizer was due to the weak performance of its manufacturing wing Upjohn and its Consumer Healthcare divisions (which are now a joint venture with GSK) in 2019.'

Of the top 20, 11 companies recorded more than 50% growth in 2019 in their operating profit, including AbbVie (103.4%), Otsuka Holdings (54.2%) and Pfizer (53.1%).

Roche added: 'AbbVie's 103.4% increase in its operating profit was driven by a decline of more than US$6bn in operating costs, mostly due to the decline in intangible asset impairment charges in 2019 compared with US$5.1bn intangible asset impairment charges in 2018. Strong performance and drug sales helped Otsuka to increase its operating profit, while the completion of the joint venture deal forming its Consumer Healthcare company with GSK was instrumental in Pfizer's operating profit increase.'

Gilead Sciences (47.7%), Takeda Pharmaceutical (47.1%), Novartis (36%) and Sanofi (33.2%) reported operating profit declines of over 25% in 2019.

Roche noted: 'High costs of goods sold (COGS); research and development (R&D) expenditure; selling, general and administrative (SG&A) expenses; and depreciation/amortization costs contributed to the operating profit decline of Takeda. The operating profit of Gilead Sciences took a hit due to an 81% increase in its R&D expenses, majorly attributed to $3.9bn up-front collaboration and licensing expenses in 2019. Gilead Sciences' operating profit declines are due to its significant investments in R&D in order to expand in the immune-oncology space - as evidenced by its $2bn partnership with Nurix Therapeutics in June 2019.'

Novartis' operating profit came under pressure due to a decline in revenue from associated companies, including the reversal of a pre-tax gain of $5.8bn on the divestment of the 36.5% stake in a GSK consumer healthcare joint venture in 2018. For Sanofi, the impairment losses taken against intangible assets in the fiscal year negatively impacted operating results. Over the past five years, Gilead Sciences and Sanofi reported negative CAGRs of 33.7% and 13.5% respectively in their operating profits.

On the profitability front, nine out of the top 20 companies reported over 25% growth in net profit. Eli Lilly and Co (157.3%) and Bayer AG (141.3) reported more than 100% growth in profits.

Roche continued: 'Eli Lilly's net income growth was mainly driven by a gain of $3.7bn related to the divestiture of animal health company Elanco, and Bayer's profit growth was also attributed to the income from discontinued operations including the divestment of its interest in the Currenta Group.'

In 2019, ten of the top 20 companies reported YoY decline in profitability, with Merck KGaA (60.1%) and Takeda (59.4%) reporting more than 50% YoY decline in net profit.

Roche concluded: 'Merck KGaA's drop in net profits in 2019 was due to the inclusion of profit from the divestiture of Consumer Health business into the net profit of 2018. Although Takeda reported decline in its net profit, an income tax benefit of $966.4m helped the company from registering a net loss in FY2019. The other major players who reported more than 25% decline in their net profit were AstraZeneca Plc (38%), Sanofi (34.8%) and Bristol-Myers Squibb Co (30.1%).

Disclaimer

GlobalData plc published this content on 06 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 August 2020 14:03:10 UTC

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