Morningstar analysts find GlaxoSmithKline has strongest pipeline

Morningstar, an independent Chicago-based investment research firm, recently published the November 2013 issue of its monthly newsletter, Healthcare Observer, with its annual outlook for the pharmaceutical pipeline.

This year, UK pharma giant GlaxoSmithKline (LSE: GSK) scored the best, based on a strong pipeline score combined with minor patent losses, while rival Anglo-Swedish AstraZeneca (LSE: AZN) lagged the group, based on massive patent exposure combined with subpar pipeline and inline product growth.

Patent protection remains a core source of the Wide Economic Moat ratings, which measure sustainable competitive advantages, for most of the Big Pharma firms. While the patent cliff has largely subsided, creating the next generation of innovative drugs is key to sustaining high returns on invested capital over the long term, notes Morningstar.