Generic competition hits Big Pharma where it hurts

Generic competition hits Big Pharma where it hurts

This week saw a whole host of pharma majors release their third quarter results with varying levels of success. Novo Nordisk’s nine month sales were up 13% as it expanded its share of the global diabetes market and Bayer also had a strong quarter with net income up 42% after the success of top pharmaceutical products such as cancer drug Nexavar (sorafenib) up 11%. Japanese drugmaker Daiichi Sankyo also posted strong profits, while Japan’s largest drugmaker Takeda showed that sales were up but its profit was down nearly 8%. SOBI’s results also showed an increase in revenue of 12% and AbbVie, recently split from Abbott Labs, beat expectations with sales up despite loss of exclusivity on certain products. In biotech Gilead Sciences reported strong third quarter results driven by the company’s HIV/AIDS franchise and Biogen Idec also saw an increase with shares trading at all-time highs.

Indian drugmaker Zydus Cadila’s net profit was up by 94% and the world’s largest generics drugmaker Teva reported an increase in sales despite disappointing generics performance and the resignation of its CEO earlier in the week. Despite this some of the large pharma companies felt the impact of generics. Pharma giant Pfizer was brought to its knees by generic competition with worldwide sales down 2% to $12.6 billion as it continued to be hit by Lipitor’s patent expiry in 2011. In addition AstraZeneca’s revenue declined 4% due to products losing patent exclusivity and Sanofi posted third quarter results down 2.8%, however it said it hopes this is the last quarter its bottom line is affected by its patent cliff history. Merck and Co also reported declines in both sales and earnings, also affected by loss of patents with Singulair (montelukast sodium) plunging 53% due to generic competition which started in August last year.