Where next for the pharma supertankers?

PHARMAS

This year has been earmarked ‘the patent cliff' for pharmaceuticals.

The US Food & Drug Administration (FDA) no longer grants companies 15-year patents for minor improvements on existing drugs. So, as the current generation of blockbuster patents expire, competition opens, profits and margins collapse, causing additional headaches for large R&D-centric firms. So why go overweight pharma? First, the concerns above are priced in. Second, these companies already know they have challenged business models and can do something about it. What you are seeing are companies cutting costs by being less complacent in their R&D, by cutting sales forces and by re-ex...