06Jun

Making predictions is always dicey – especially so in this unprecedented global environment. Yet that isn’t stopping EvaluatePharma from predicting Roche will still be the world’s biggest drugmaker 6 years from now.

If that seems a bold forecast – over the years, Roche has moved up and down the list of largest pharmaceutical firms – EvaluatePharma predicts that Bristol-Myers Squibb will drop from 4th this year to 8th in 2026.

Though the firm is projected to grow at a compound annual rate of 8.23% — second only to AstraZeneca’s 8.47% — the company’s lock on at least one of its big sellers will expire, lowering its drug revenues. It broke into the top five through its takeover of Celgene at the end of last year..

Other companies, according to the forecast, will move ahead on the list. By virtue of its merger with Allergan, which closed in May, Abbvie is on track to occupy 4th place in 2026. However, the online publication FiercePharma notes that the company’s big selling Humira is vulnerable to biosimilars which could “eat away at billions in revenue.”

These rankings are all based on prescription and over-the-counter drug sales. On a gross revenue basis, Johnson & Johnson tops the list of largest firms with 2019 revenue of $82.1 billion.

Many big pharma companies have other products that add to their total revenue. Johnson & Johnson manufactures skin and hair care, including such well-known brands as Neutrogena and Aveeno, as well as medical devices.

Solely on its drug sales, EvaluatePharma ranks J&J 3rd in 2026.

The forecast predicts Gilead Sciences will struggle to stay in the top 15. The company is forecast to barely grow through 2026. According to the analysis, “The company is famously under pressure to strike deals, but has steadfastly stuck to bolt-ons to date.”

Acknowledging that the “coronavirus pandemic is making the job of forecasting particularly tough right now,” Evaluate concludes by declaring, “it seems clear that Roche will lead the pack in 2026.”

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Green Key
Jun 6, 2023

Pharma Rebrands More Often and Gets Better Results

When Actavis acquired Forest Labs in 2014 it chose to rebrand the products under its own, better known name. That rebranding decision helped Actavis expand the reach of Forest Labs’ products, especially those in women’s health and gastroenterology.

That example is one of the most successful merger rebrandings in a study from the brand valuation consultancy, Brand Finance.

Researching the results of 3,000 mergers and acquisitions since 2014, Brand Finance found 21% resulted in a rebranding, typically of the acquired company’s products. Of all the industries, pharma was the most prolific – and financially successful – in rebranding.

The report says pharmaceutical companies rebranding 31% of the acquired companies. Most of the time the rebranding decision was made because the acquiring company had the stronger name. Sometimes, as when Eli Lilly acquired Novartis Animal Health, it was to avoid brand confusion.

Alex Haigh, Brand Finance valuation director, told FiercePharma, “Pharmaceutical companies tend to be very experienced in mergers and acquisitions. Of the eight companies with the most rebranded acquisitions, three are pharmaceutical companies — Allergan, Lilly and Roche.

“Companies which are experienced in integrating acquisitions tend to be more likely to rebrand and have better results.”

Compared to M&A rebrandings in other sectors, pharma’s are significantly better. The report found pharma had a first year return of 13.8%. Only telecoms and the tech sector had positive first year returns on their rebrandings.

“The success of rebranding strongly depends on sector,” the report observes. “For example, in pharmaceuticals, where acquisitions generally have not built strong brands but acquirers have, rebrands are highly successful.”

“Superior marketing and client networks of the larger players lend themselves to the trend to rebrand for this reason. Also, since there are often positive reputational benefits from new drug development, rebranding can help wider business performance through association.”

Illustrating this point, the Brand Finance reports points to Roche, citing the big pharma firm for its “flexible rebranding strategy.” Roche rebranded its acquisition of three smaller firms — Ignyta, Intermune and Seragon.

But Roche retained the separate brands Flatiron, a medical technology company, and the molecular insights company Foundation Medicine because each already had an established client base and strong name recognition.

Actavis itself is a rebranding poster child. A year after completing the acquisition of Forest Labs, Actavis bought Allergan adopting the name of the acquired company, rolling it out slowly and geographically.

Last month, AbbVie completed its $63 billion acquisition of Allergan and retired the name.

Photo by Stephen Foster on Unsplash

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Green Key