London: In 2005, 44 per cent of 'mid pharma' revenues were derived from products that have been discovered outside of the in-house development pipelines, says a new report, 'Mid Pharma Sector: In-licensing and other externalisation strategies', from independent market analyst Datamonitor.
In fact, even in the absence of any further external sourcing between now and 2010, the dependence on revenues of products that came from external pipelines will continue to increase, coming to stand at 49 per cent by 2010. Externalisation, says the report, can reduce mid pharma companies' R&D costs and allow it to boost revenues when internal R&D is failing to bring sufficient products to market.
Groups within the group
Datamonitor defines mid pharma as those companies within the PharmaVitae company universe with less than $10 billion in ethical revenues in 2005, excluding Japanese and biotechnology companies. Within this group, the players can be broken down into further sub-groups: the 'Big 6', those focussed on the central nervous system (CNS) market, those focussed on the cardiovascular (CV) market, and domestic players.
The Big 6 - Boehringer Ingelheim, Schering Plough, Novo Nordisk, Bayer, Schering AG and Merck KGaA- all have revenues of greater than $4 billion, are global players and have a broad therapeutic strategy.
The Big 6 is currently in the grips of consolidation with the merger of Bayer and Schering AG going ahead- this dynamic will propel Bayer-Schering into 'big pharma', leaving behind the remaining 'Big 4' in their wake. At the other end of the mid pharma scale are companies with around $1 billion in annual revenue which is mainly generated in their country of origin, such as Recordati, Ipsen, Almirall and Pierre Fabre, while companies such as Lundbeck and Schwarz focus their efforts on the CNS and CV markets respectively.
As a group, mid pharma recorded total ethical sales of $66 billion in 2005. This is forecast to grow with a compound annual growth rate (CAGR) of almost 5 per cent from 2005-10. In fact, 'mid pharma' growth is expected to outstrip 'big pharma' growth during this period.