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New York-headquartered Pfizer will remain the world’s top pharmaceutical company six years from now, well past the patent expiry of Lipitor, which is its biggest brand and contributes nearly a fourth of its global revenues.

Or so a study titled World Preview 2016 by pharma and biotech industry consulting firm EvaluatePharma reveals.

According to the report, by that year, Pfizer would have annual revenues of $47 billion, down 6% from $50 billion in 2009, but would still be able to capture 6% of the world pharmaceutical market. Understandably, the revenue decline would be mainly on account of the expiry of patents on Lipitor.

This is somewhat surprising considering Pfizer’s acquisition of Wyeth for $68 billion in early 2009 was expected to give it additional revenue of around $20 billion a year, thereby more than compensating for the lost sales of Lipitor due to the patent expiry.
Merck would claim the second spot with sales of $46.3 billion in 2016. That will be a big leap for the company, which owns brands like Zocor and Singulair alongside Schering Plough’s portfolio and can boost presence in growth areas such as women’s healthcare.

Somewhat surprisingly, the study sees GSK falling to the sixth position by 2016 from third now. GSK is possibly the only company that has not done a mega merger or acquisition in the last few years. In contrast, it has been aggressively forging links with generic companies and early stage drug discovery units. While such deals are important from a long-term perspective, in the medium term, their effect on topline could be negligible at best.

One big entrant into the top-ten list and most desirably so will be Teva. EvaluatePharma analysis shows that Teva will be amongst the fastest growing companies as its sales will move up from $12.6 billion in 2009 to $20.8 billion in the next six years. That massive jump in revenues will catapult Teva from the present 15th position to the 10th. The study notes that Teva will be ahead of some more traditional Big Pharma groups such as Bristol-Myers Squibb, Eli Lilly and Amgen.

The churn in the rankings of pharmaceutical companies may not be tumultuous, but despite the slowdown in home markets like the US and Europe, not to mention the acute costs and pipeline problems, the top companies will somehow be able to maintain their ranks.

There is no indication on the revenue distribution by geography for the big pharmaceutical companies but it may be safe to conclude that the share of emerging markets will continue to grow in the overall numbers. That trend is already getting demonstrated in the earnings of companies such as AstraZeneca, GSK, Novartis and Sanofi Aventis.

The study also throws light on the top ten brands. According to it, Abbott and Eisai’s Humira, used for arthritis treatment, will nearly double its sales from $5.6 billion to $10.1 billion in 2016. Humira will be followed by three more biotech compounds —- Avastin, Enbrel and Rituxan. The fifth position will be taken by AstraZeneca’s Crestor, which has GlaxoSmithKline’s Advair as the only other small molecule in the top-ten list. Herceptin, Remicade, Lantus and Prolia will also be among the biggest products 6-7 years from now. This is a startling change as the present data of top drugs is dominated by small molecules.

Will this big shift to biotech drugs from conventional small molecules trigger a larger pharma-biotech consolidation? In the wake of Roche taking stronger control of Genentech, that possibility cannot be dismissed.

Biotech companies lack formidable marketing network in large markets that pharma companies can boast of and knowing well that a large part of future growth is expected to come from emerging and untapped markets, one round of takeovers could be in place.

There could also be more pull for big pharma companies towards Indian generic companies —- for digging deeper into the domestic market and to wrest large manufacturing facilities. Companies may be too tempted to reduce their operational costs by at least a half and deploy the additional available financial resources in bulking up marketing and research capabilities.

Those developments may lead to some more surprises. Every generic company wants to get into the innovation mode, like Teva did with Copaxone. There could also be a strong likelihood of a generic company building a pipeline by buying smaller brands and growing them big. Lupin and Dr Reddy’s have been on that track and many more may decide to identify themselves with more such scalable products.

The ground situation for the world pharmaceutical market is going to be very volatile and there is evidently a lot of action to come.
Pillman is an executive closely linked to the global pharma industry.