Moody's: Patent-cliff challenges will continue to dog big pharma
- According to Moody's, Pfizer, Eli Lilly, Merck, Amgen and Novo Nordisk are more threatened now by patent losses than they were just a couple of years ago.
- The companies with the most exposures to patent expirations are AstraZeneca, Eli Lilly, and Bristol-Myers Squibb (BMS).
- For example, BMS is taking a hit with the expiration of its antipsychotic Abilify in the E.U. last year—and this year in the U.S.
Patent expiration and the loss of sales that accompanies it is part of the price of doing business in the pharmaceutical industry—and the best antidote for this problem is a strong pipeline. Not surprisingly, a company faces the greatest risk when more than one of its highest-selling products faces patent expiration around the same time. That's the position that AstraZeneca is in, with recent patent expirations of Nexium and Symbicort, as well as the imminent patent expirations of Synagis and Crestor this year.
Eli Lilly is facing greater patent expiry exposure, along with risk of major sales losses, as it contends with the loss of protection for Cymbalta and Evista (both last year). Upcoming patent expirations that could shake up Lilly's revenues include patent expiry of Zyprexa in Japan this year, as well as Cialis in the U.S. in 2017.
Moody's also notes that many of the companies facing these pressures, such as Lilly, Amgen, Merck, and AstraZeneca, have been feeding their pipeline and working on diversifying their product portfolios—two strategies that bode well for future growth.