Pharma companies had a bleak day today, with three of the industry’s biggest players reporting falling sales as their best-selling products continue to fall off the ‘patent cliff’. There are signs, though, that the slide may be bottoming out for some.
Worst hit was AstraZeneca, which reported a 15% drop in revenue in the third quarter of the year and a 50% drop in earnings per share, a measure of profitability.
Company chief executive Pascal Soriot blamed expiring patents — which open up the market to generic versions of drugs — and “challengers that confront the pharmaceutical industry as a whole” for the decline in the London-based company’s sales.
Sanofi, headquartered in Paris, reported sales down by 3.1% and its earnings per share sliding 14.5%. However, the company says the end of its patent on cancer drug oxaliplatin (Eloxatin) marks the bottom of its tumble down the patent cliff.
“Indeed, the loss of exclusivity of Eloxatin in the US is a turning point in this recent history of Sanofi,” said Jérôme Contamine, the company’s chief financial officer. “Importantly, we have lost on the one hand €448 million [US$580 million] in sales from generic competition, but at the same time our growth platforms have grown by 6.4% and now represent more than 70% of our sales.”
Novartis performed slightly better, with a 2% drop in sales in the third quarter but a 2% increase in its earnings per share. The Basel, Switzerland-based company said that newly launched medicines had helped make up much of the ground lost by patent expiries.
So amid the slide, there are some signs that some parts of the industry might be, if not back on its feet, then ready to get up. “Investors are increasingly willing to accept that pharma companies can navigate the patent cliff through factors including growth in emerging markets, cost management, diversification and in some cases new drug launches,” said Deutsche Bank analyst Mark Clark before the results were public (quoted in the Wall Street Journal).
[All figures used in this article are adjusted for currency fluctuations by the companies concerned.]