Betting Upon Galvus and Exelon
More than 20% patients suffering from diabetes type 2, are above the age of 65 years. Controlling sugar in elderly patients is bit more challenging, and in this patient group, Novartis AG (ADR) (NYSE:NVS) “Galvus” has proved its efficiency. This drug reported the sales growth of 43%, year-over-year, amounting to $910 million in 2012. To increase its market share, Galvus was recently launched in China. It is estimated that there are around 75 million diabetes type 2 patients in China, which accounts for around 20% of the total medical expenditure of country.
Galvus has also received approval in the EU region last year. It is expected that this will help the company to post revenue growth of more than 34% in this year compared to last year.
Novartis’s two blockbuster drugs, namely, “Glivec” and “Diovan,” had combined revenue of $9.1 billion, last year. Glivec, used to treat leukemia, is patented in around 40 countries, including China, Russia, and Taiwan. Glivec generated revenue of $4.67 billion in the previous year, and expected revenue is around $4.75 billion for the current fiscal year. Moreover, Glivec dominates the $6 billion market of leukemia drugs. However, the patents for Glivec will expire in 2015 and 2016, in the U.S., and Europe, respectively.
In 2011, there were around 30 million patients diagnosed with Alzheimer’s. Novartis is selling its Exelon drug, which is used in the medical treatment of Alzheimer’s. It is expected that, by 2015, the number of patients with Alzheimer will increase to 35 million globally. The global market size for Alzheimer’s therapies is expected to remain above $19 billion in 2015. Novartis expects Exelon to generate revenue of around $1.04 billion in the current fiscal year, down from $1.05 billion in previous fiscal year. Revenue growth is flat, in comparison with previous year; however, looking at the potential market to capture; Novartis has a big opportunity to tap in with its drug Exelon.
Conclusion
Sanofi SA (ADR) (NYSE:SNY) will get the benefits of its monopoly, while its new drug will help in offsetting the revenue hit from expiring patents.
Johnson & Johnson (NYSE:JNJ)’s increasing footprints in emerging markets will result in a broader marketplace for its drugs, and its new drug Invokana will add revenue to the company.
Judging the potential market for the drug Galvus and Exelon, Novartis’s profits look poised to surge. However, the patent on Glivec will expire in 2015, which will reduce Novartis’ revenue at that.
All of these stocks are a “buy.”
Madhu Dube has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.
The article Can Investors Bet on These 3 Pharma Companies? originally appeared on Fool.com and is written by Madhu Dube.
Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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