Oct 04 - Global pharmaceutical firms with strong portfolios containing anti-diabetes
treatments stand to make substantial revenue gains over the next few years given the rising
incidence of the disease, says Standard & Poor's Ratings Services today in a new report:
"Diabetes Treatments Are Injecting Strong Revenue Gains For Big Pharma."
This will likely help protect their credit quality over the coming years
against the increasing pressures the industry is facing from tightening
patenting regulations, escalating drug development costs, and more restricted
use of innovative drugs by public health systems seeking to tighten health
"We anticipate that Denmark-based Novo Nordisk A/S (A+/Stable/A-1), already
the global market leader in diabetic treatments, could jump into the top 10
global pharmaceutical companies in revenue terms over the next few years,
while presently it is still a midsize company compared with its peers and
specializes almost exclusively on diabetes treatments," said Standard & Poor's
credit analyst Olaf Toelke.
Standard & Poor's analysis of promising new drugs in development also suggests
that U.S. companies Eli Lilly & Co. (AA-/Stable/A-1+), Merck & Co. Inc.
(AA/Stable/A-1+), and Bristol-Myers Squibb Co. (A+/Stable/A-1+), could improve
their revenues from diabetes treatments over the coming years. Meanwhile,
France-based Sanofi (AA-/Stable/A-1+), maker of the world's top-selling
patented anti-diabetes drug Lantus, should at least be able to maintain its
currently strong diabetes-related revenues.
More than 366 million people worldwide were diagnosed with diabetes in 2011
and an additional 280 million patients will be diagnosed over the next 20
years, the majority from emerging markets, such as China and India, as their
health services develop leading to more diagnoses.
As a result of this growth, the global diabetes market for pharmaceutical
companies is likely to grow to more than $58 billion in 2018 from $35 billion
per year at present, the report says.
Novo Nordisk is the global market leader in diabetes therapy with 25% of the
market, and has also already captured leading shares in the insulin markets in
China and India, with a 37% and 17%, respectively. Its blockbuster drugs
NovoRapid, NovoMix, Levemir, and Victoza, among others, generated more than $8
billion in revenue in 2011. These drugs and new ones in development could
expand the company's group revenues, mainly derived from diabetes, to about
$20 billion by 2018, the report says.
France-based Sanofi ranks No.2 in the anti-diabetes market, with an 18% market
share. Its success rests mainly on its blockbuster drug Lantus, the world's
leading anti-diabetes brand, which generated about $5 billion sales in 2011.
The strong franchises and promising pipelines of Sanofi, Eli Lilly,
BristolMyers Squibb, and Merck & Co., should also help them maintain their
strong credit ratings, the report says.