Pharma R&D Annual Review 2010
Top companies - Pfizer jumps to pole position
Next we move to our annual league table of pharma companies, arranged not by amount of market capitalization or sales, but by the reported sizes of their R&D pipelines. Changes in the league table this year really come down to two events - the two megamergers which completed towards the end of 2009. Rather unsurprisingly, Pfizer's acquisition of Wyeth leapfrogs the US-based giant to the top of the chart, although its lead over nearest rival GlaxoSmithKline is not as great as might be expected. The other big takeover, that of Schering-Plough by Merck & Co, only moves the latter one place up the ladder. What is interesting is that the Top 3 are now some way ahead of the next tier of companies, making these megapharma concerns something of a 'mini-league' of their own.
How much might some potential oft-mentioned future tie-ups affect things? Any merger between GlaxoSmithKline and fellow UK company AstraZeneca would clearly lift the combined firm way above the competition in terms of pipeline size, leaving aside any divestments which might be required for regulatory authorities to approve such a tie-up. Similarly, any all-Swiss mega company formed out of Roche and Novartis would also be top of the pile, but not by so much. What is striking from this year's table though is that, aside from the two aforementioned big deals, there has been relatively little M&A activity in the upper echelons of the industry, leading to a table remarkably similar to last year's. The only entry into the top ten is Bristol-Myers Squibb, which climbs in by dint of its takeover of Medarex. Only two companies in the top ten have seen a decrease in their pipeline sizes this year, indicating further growth in the really big companies with portfolios of over a hundred compounds.
In the remainder of the table, there is a notable preponderance of Japanese companies, accounting for nearly half of the other 15 places. Mergers or hook-ups between almost any of these companies would create a debut Japanese top ten pharma company, indicating that this market might be an interesting area to watch in the coming years.
With bigger pipelines in the Top 10 companies, are we seeing further concentration of the R&D effort in these giant multinationals? If this is the case, it is also true that the long 'tail' of small companies at the other end of the scale has also grown. Graph 3 shows the overall number of companies with active pipelines this year, and is perhaps the most optimistic piece of data to be found in this review. It shows another big increase in the number of firms operating in this space, with the figure of 2,207 representing a 5.9% increase from last year. The past five years have shown consistent growth in this metric. The growth, as in previous years, is attributable to the increasing numbers of small start-ups entering the fray. If we take the companies with just 1 or 2 drugs in their pipeline as being in all likelihood mostly start-ups of emerging niche companies, we can see that there are a massive 991 companies currently reported which fit this description, up significantly from the 2009 figure of 836. This would indicate that despite the harsh economic conditions and dearth of funds available to borrow, the pharmaceutical industry is still producing a steady flow of companies entering its space which is far outweighing the rate of acquisition. So with more drugs in the biggest companies' pipelines, and more companies with small pipelines, it seems the squeeze must be occurring somewhere in the middle.
