FirstWord List – Pharma's top 50 growth drivers – where do they come from?

This week's FirstWord List is inspired by slides which were presented by Valeant last week to support its argument that Big Pharma R&D is failing (a justification of sorts for its proposed acquisition of Allergan).

Forbes' Matthew Herper was quick to rebuke one of the claims made by Valeant, that just 4 of the industry's 50 biggest selling pharmaceuticals were developed in-house at a Big Pharma company.

It is not justifiable, argues Herper, to suggest that a product discovered and developed by Ciba-Geigy (Gleevec), is not considered as being developed by a Big Pharma player; Ciba-Geigy and Sandoz merged to create Novartis in 1996 and Gleevec was launched in 2001. You can read more of Herper's criticism of Valeant's slides here.

This got us thinking about where key industry products are sourced from and by which routes they most frequently travel from discovery to market. Rather than reappraise Valeant's list of the 50 largest products, we revisited a previous FirstWord List detailing the 50 leading sales growth drivers in 2013 – i.e. those products that delivered the largest absolute sales increases in 2013 versus 2012; arguably the most important set of products within the industry at present from a current commercial perspective.

The list below provides a basic evaluation – completed using data from Bloomberg – on the means by which each of these industry growth drivers were sourced by the company marketing the product in 2013.

Eighteen – or 36 percent – of the 50 largest growth driver drugs in 2013 ended up in the possession of the company marketing them via M&A activity. A notable trend being the transfer of ownership for the first generation of commercially successful monoclonal antibody products (i.e. Rituxan, Remicade, Humira) from biotech to Big Pharma, characterised most prominently by Roche's acquisition of Genentech. This pattern has continued in more recent years via Bristol-Myers Squibb's acquisition of Medarex, a deal that will come under greater focus with the launch of the immuno-oncology treatment nivolumab (which like Yervoy stems from Medarex).

According to our analysis – and somewhat in contrast to Valeant's argument – internal development accounted for just over a quarter of the products among the top 50, with 10 of the 13 drugs developed by Big Pharma players. In addition, 22 percent of the products were primarily sourced via co-development deals and the remaining 16 percent via in-licensing activity.

At a company level, not only does Johnson & Johnson cast a dominant shadow over the list of key growth drivers – see FirstWord Lists – Top 50 growth driver drugs in 2013 – oncology casts a dominant shadow, as does Johnson & Johnson - but it has integrated successful growth drivers into its portfolio via acquisition and co-development deals to support internal development efforts.

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