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Who Has the Best Pharma Pipeline?

One major name is well-positioned for revenue growth

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Merck & Co.

Merck & Co.‘s (NYSE:MRK) pipeline might be the most hotly debated pipeline of the nine in question here. Investors are quick to criticize how small it is, but when you start to do the math, you find Merck’s got 35 drugs in Phase 2 or Phase 3 trials. One of them is a vaccine to treat HPV, and another is odanacetib, which improves bone strength. Still, there’s nothing in the pipeline that looks as potent as its asthma and allergy drug Singular, which lost patent protection this year.

Bristol-Myers Squibb

With 46 drugs in the pipeline, Bristol-Myers Squibb (NYSE:BMY) is another dark-horse candidate for the pharma name with the best pipeline. On the other hand, a couple of key problems with the pipeline’s most-watched drugs has to leave you wondering whether more problems are waiting. One of those stumbles was a potential safety issue with BMS-986094, for hepatitis C. That was one of the drugs acquired in early 2012 with the acquisition of Inhibitex, which was largely made because of the strength of the Inhibitex hepatitis C portfolio. Bristol-Myers Squibb also recently pulled the plug on Phase 3 trials of brivanib, as a treatment for hepatocellular carcinoma.


It might only have 19 drugs in late-stage trials, and there’s little doubt that Roche (PINK:RHHBY) needs at least a few of them to win approval to offset growing concerns about (not to mention looming patent expiration of) breast cancer drug Herceptin … but there’s something compelling here. More than half of the current pipeline consists of drugs being tried in conjunction with currently approved drugs (a ‘companion diagnostic’ arrangement) to make the whole treatment regimen more effective. Such drugs rarely lead to blockbuster-level sales, but there’s a lot to be said for low-hanging fruit.

Sanofi SA

Sanofi (NYSE:SNY) might not have a very deep or wide pipeline, but there are a few sleepers in it. Specifically, it’s developing a cholesterol-lowering drug with Regeneron (NASDAQ:REGN). For the time being, it’s simply called REGN727, though it’s slated to start Phase 3 testing soon. Sanofi also is working on the dengue fever vaccine it acquired with its 2008 purchase of Acambis, and Lemtrada (now for multiple sclerosis) is being developed after it was brought into the fold as part of the Genzyme purchase. Though the company reported its initial effort at a dengue fever vaccine wasn’t great, to design even a semi-effective one is ground-breaking; that’s a potential $1 billion (annually) opportunity. Though Lemtrada hit an FDA snag last month, it’s still viable.

And the Winner Is …

Just for the record, there’s more to the story than simply what you read about the pipelines above. So don’t think I’m making a final decision just on those factoids. But, taking everything into consideration, the best-looking pipeline in pharma right now belongs to (insert drum roll here) …

… Pfizer.

It’s not something I thought I’d be saying a year ago, but having had a chance to dissect its pipeline and compare it to the rest of the industry, Pfizer has the most near-term potential for relatively big, blockbuster-caliber revenue through tofacitinib and Eliquis. It also has a long string of Phase 1 and Phase 2 trials in the lineup that could step into the cash cow role, even if its three flagship drugs can’t.

And what you can’t really see in the pipelines alone is that Pfizer has finally opened up to a collaborative spirit, particularly with the country’s major drug research universities. That’s going to keep the pipeline full for quite some time.

But hey — that’s just one man’s opinion. What do you think? You can chime in below if you’ve got something to add.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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