Since our 2012 study on high performance biopharma companies, there has been continued improvement in the pharma sector and increased confidence among investors. Evidence of this recovery is clear in some of the findings I shared with you last week. But this recovery is not equal with a few high performers able to outperform the market while others struggle to return to sustainable growth.
High performers are putting science back into life sciences
Our latest rankings show significant and rapid improvement in performance for a handful of companies. Five companies are now a step change above the rest of the pack:
Novo Nordisk remains the only high performer in 2013.
Bristol-Myers Squibb, Amgen and Roche rose three, eight and six places respectively since last year’s study and now form the “near high” performers.
Astellas jumped eight places to just behind the near high performer group.
Our research also reveals three metrics that distinguish the high performers:
Higher replacement revenue ratio forecast. High performers averaged 5.6 versus a 1.5 average for the rest of the peer group.
Higher five-year revenue growth forecast. High performers averaged 4.2 percent (in line with the overall global market) versus a -0.4 percent average for the rest of the group.
Higher proportion of forecast growth from new products. High performers are expected to grow an average of 32 percent in sales over the next five years versus a 13 percent average for the rest of the group.
So, how are these leading companies outperforming the market? In short, their solid performance is largely driven by product launches based on scientific innovation delivered through patient outcome-driven commercial models versus diversified strategies. High performers have been able to successfully launch and grow these new products against a tougher payer environment by enabling more accurate diagnosis and specific targeted therapies. Take Roche’s Zelboraf for example. Through its innovative research, Roche has developed the treatment specifically for melanoma patients with BRAF V600 mutations. It also applied its medical device prowess to develop the Cobras 5800 companion diagnostic which identifies the patients with the specific mutation. The combination of accurate diagnosis and targeted treatment makes it an attractive case for reimbursement.
New product launches are entering a radically more competitive and crowded pharmaceutical market than ever before. Our research revealed that six of the 12 selected New Molecular Entity (NME) launches from 2011 missed analysts’ pre-launch sales target for the first two years by $2.7 billion. The high performers are able to carve out a unique place in today’s price and value-conscious health market through launch capabilities that demonstrate whole system patient outcomes.
Next week I’ll conclude my series by exploring the range of capabilities that differentiate the high performers.
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