Read the Label on Pharma’s New Drug Sales
When measuring success in pharma, one highly monitored measurement is the amount of revenue a company generates from new medicines. But is it a reliable measure of success?
A Bloomberg Intelligence analysis of drugs approved since 2010 shows Bristol-Myers Squibb as the clear winner. New drugs accounted for 42% of BMS’ revenue, while runner-up Novo Nordisk managed just 24%. However, the majority of BMS’ revenue comes from only two drugs: Opdivo and Eliquis. So how useful is this measurement if those drugs don’t hit their targets? A recent clinical trial misstep for Opdivo has some wondering.
On the other hand, Johnson & Johnson’s new drugs accounted for only 13.6% of total sales in the second quarter. But J&J suffers in this comparison because a large part of its business comes from devices and consumer products. As for year-over-year growth, J&J is working off a far higher base than most companies. In last year’s second quarter it had sales from new drugs of $2.18B and was able to grow that amount to $2.5B in the period this year. To add perspective, the $332M J&J added is more than half of Eli Lilly’s total new drug sales in the latest quarter. Therefore, top-line trends can be useful, but it helps to keep other factors in mind.
