In the Pipeline discussed an analysis of the "freshness index" from FirstWord Pharma. The freshness index is a measure of what percentage of a company's drug sales -- from say the last 5 years - is of total sales. In this analysis, sales of drugs introduced to the market after 2010 were measured as a percent of total sales. In theory, a higher freshness index means more sales are comping from new drugs and the company's future growth prospects are more rosy. It could also be taken to suggest a healthier new product pipeline (whether R&D or acquisition).
The rankings showed J&J (23.4%), Novartis (17.8%) and Novo (13.6%) were the top 3 ranked companies in this post 2010 ratings war. The bottom 3 included Sanofi (2.7%), GSK (2.3%) and Eli Lilly (0.8%) as the three trail dogs. Lilly in particular is really a hurting buckaroo. So it is clear that near term revenue contributions are much healthier at the top three companies than at the bottom three.
But I wonder if that is really the whole picture -- particularly for some of the companies in the middle. The index is skewed to just the past couple years for new products. Also, the index can be influenced by both positive new product growth and old product decline. I suppose if your oldest products were dying fast enough that could create an enhanced impression that your new products were better contributors than might be the case. But under either interpretation, Lilly looks bad. Might be more like the "staleness index" for them.
Posted by Bruce Lehr Nov 26th 2013.