Amgen, Inc. (AMGN), Johnson & Johnson (JNJ): Boom Or Ticking Time Bomb?

Boon for business or ticking time bomb?
There is no denying that the investors in the four companies above have all benefited from the development of the megablockbuster anti-inflammatory drugs. But with patent expirations looming it may be time to begin questioning the sustainability of relying on one drug for such a large portion of sales. All one needs to do is look at the havoc caused by the patent cliff to see how far sales can fall.

These record setters are nearing the end. Humira’s composition-of-matter patent expires at the end of 2016 in the United States and in early 2018 in Europe. Remicade loses European exclusivity in 2015, while Enbrel recently gained another 17 years of protection through the end of 2028. Each company is working feverishly to replace the lost sales set to kick in — and each has great pipeline candidates that could help fill the voids.

Foolish bottom line
When combing the market for the next big drug remember to be on the lookout for the three areas outlined above. While several new anti-inflammatory treatments will undoubtedly reach blockbuster status, the market is getting pretty crowded. Therefore, I find it unlikely that any drugs currently in development will ever reach the $5 billion mark. Investors haven’t seen the last megablockbuster, but the next batch will probably target a new market opportunity. What treatment or disease will that be? Stem cells? Obesity? Leave your thoughts in the comments section below.

The article 3 Hallmarks of a Megablockbuster originally appeared on Fool.com and is written by Maxx Chatsko.

Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio, his CAPS page, or follow him on Twitter @BlacknGoldFool to keep up with his writing on energy, bioprocessing, and emerging technologies.The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.

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