The prognosis for big pharma in the next few years has been divided between the "haves" and "have nots." The "haves" like Merck
Most drugmakers are saving their 2008 guidance for upcoming investors' conferences and 2007 year-end meetings in January and February, but a vanguard of the big pharmas have already announced their 2008 guidance.
The first of the pack
So far, Bristol-Myers Squibb
Thanks to the ending of generic competition against Bristol's lead drug Plavix, it will finally return to a year of growth in 2008. Lilly is also guiding for a better 2008 thanks to growth in Cymbalta.
2007 EPS guidance* |
2008 EPS guidance* |
|
---|---|---|
Bristol-Myers Squibb |
At high end of $1.42 to $1.47 EPS range |
$1.65 to $1.75 EPS range |
Eli Lilly |
Pro forma $3.50 to $3.55 EPS range |
$3.85 to $4.00 EPS range |
The Bristol-Myers comeback has been a long time coming, after Canadian drugmaker Apotex flooded the market in 2006 with its at-risk launch of generic versions of Plavix. In June, Bristol won a court battle validating its patents on Plavix, and next year will be the first time its earnings have meaningfully grown since the $1.43 per share it earned in 2005.
Swiss drugmaker Novartis
Bubble, bubble, boil and generic trouble
Merck has also released its 2008 guidance of $3.28 to $3.38. Its goal of "double-digit compound annual" earnings-per-share growth from 2005 to 2010 is going to be difficult to keep up when generic competition begins in February against its osteoporosis drug Fosamax.
Fosamax is Merck's third-highest-grossing drug, with 2007 sales expected in the $2.9 billion to $3.1 billion range. By the end of 2008, though, it will be bringing in only a fraction of these sales because of generic competitors. Fortunately, Merck believes that new compounds like HPV vaccine Gardasil and diabetes treatment Januvia should cover the Fosamax shortfall.
Unfortunately, other big pharmas like Pfizer have no recently approved drugs to make up for the ravages of generic competition. The upcoming year will be another very tough one for Pfizer as it deals with the overhang from former blockbuster compounds Norvasc and Zyrtec losing patent protection in 2007 and chemotherapeutic drug Camptosar in 2008.
Old world, renewed growth
While Merck and Pfizer deal with their generics woes next year, Sanofi-Aventis
No big-pharma roundup would be complete without a mention of GlaxoSmithKline
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