There’s been substantial worry in the pharma business about the future of the pipeline–and rightfully so. More than any other business, pharma companies tend to rely on one huge hit, and the spin-offs from it, rather than a steady stream of new products. The recent round of consolidation in which Glaxo and Pfizer got much, much bigger was in part an attempt to diversify their portfolios by acquiring other blockbusters, and also an attempt to make the overall corporation less vulnerable to the patent expiry of others. As I wrote about a while back, the specter of Claritin’s disappearance removing billions in revenue off Schering Plough’s income statement haunts all pharma CEOs’ nightmares.
So how does the potential pipeline look for the latter part of this decade, when many of today’s blockbusters come off patent? Well according to a Datamonitor study quoted in this Forbes article, Pfizer has 5 potential biggies with a guestimated revenue of up to $5 billion in 2008. GlaxoSmithKline (GSK) has only one with estimated revenues of only $700 million. Pfizer’s 2001 sales in the US were $17 billion, whereas GSK’s were $15 billion. So it appears that GSK is more likely to be doing what it can to find more ways to fill its pipeline. Expect more activity in both big pharma M&A and looking to biotech to fill the pipelines from the big players in the next year or so.
For a good general report on the pharma industry from (believe it or not) the CMS, click here.