Novartis (NVS), Roche (RHHBY) and Glaxo (GSK) are predicted to launch the most cancer drugs.
Celgene (CELG) and Roche need to in-license to replace their existing sales.
In June of 2010, I did an analysis of the ability of oncology pipelines to replace current sales, still visible on Rod Raynovich’s webpage. http://raygent.com/other/rag/oncology-pipeline-update/.
The companies with the top ranks for cancer Rx sales in 2011 formed my dataset, along with the number of compounds in Phase 1, 2 and 3 for cancer. To calculate a predicted number of launches for each company, I summed the number in each stage multiplied by its probability of success to approval by stage (using Recap 2010 numbers). The sales replacement power multiples the number of predicted launches by $500M annual sales per approved drug and divides the results by the 2011 sales dollars.
Novartis has the most compounds in Phase 2 and 3 in oncology, and that gives it the number one rank in predicted launches. Based on the probability of success, Novartis should get ~15 molecules approved in oncology from its clinical pipeline today. Multiplying each predicted launch by $500M annual sales, that gives Novartis $7.3B, or 1.1x its 2011 sales in oncology. So its pipeline appears to have the power to replace and grow its current oncology sales.
GlaxoSmithKline has an impressive 40 cancer compounds in development and a predicted 11 launches from this pipeline. GSK is on its way to being a cancer powerhouse. Bayer, Merck, and BMS also look to be growing their oncology power.
Pharma and biotech companies that can’t replace or outpace current oncology sales from drugs in their internal pipeline are more likely than their counterparts to be active in partnering.
Roche has an impressive pipeline with 64 compounds in clinical development, but the huge success of its current drugs means it is hard to replace those sales. So despite 14 predicted launches, the sales replacement power, assuming $500M per drug is way below its current pipeline. To replace current sales, each of the 14 predicted launches would need to be multiplied by $1500M. Unless all its launches are blockbusters, Roche should license more according to this analysis.
By this analysis, Celgene also has too thin a pipeline to replace its oncology sales from organic growth. In 2012, Celgene in-licensed compounds from VentiRx, Epizyme and Anaptys. Watch for Celgene to continue to do deals (as I said in 2010).