Lilly Math: Subtracting Employees And Animal Health Equals Pharma Growth
Lilly is cutting 3,500 jobs and may spin out or divest its animal health business to support pharma growth as sales of new medicines contributed significant revenue in the third quarter, but price increases were needed to offset falling demand for mature products.
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Pharmaceuticals have been, and are forecasted to be, the main revenue driver for big pharma, but reliance on this market could shift because of challenges, ranging from generic and biosimilar competition to low R&D productivity. An analysis based on the indicative profit potential metric finds that branded prescription drugs remain the most profitable market to play in, but other sectors may offer opportunities.
Investors await news from Lilly on whether it will use repatriated cash for M&A; from Biogen on its Spinraza and gene therapy strategies in light of Novartis' AveXis deal; and from Amgen on pipeline programs and acquisitions as major products face new competition. Immuno-oncology combination updates are anticipated from Roche, plus guidance on how GSK will cope with Advair generics, HIV competition from Gilead and the cost of new drug launches is expected.
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