Abstract
AS ILLUSTRATED BY A WIDE RANGE of second-quarter results, the pharmaceutical industry's reliance on blockbuster drugs is a double-edged sword. Although Pfizer and GlaxoSmithKline were taken down a notch by pressures on multi-billion-dollar drugs, Merck and Schering-Plough are at their healthiest in years thanks to skyrocketing sales of newer products. Overall, the average second-quarter profit margin for the 13 drug companies tracked by C&EN slipped only slightly to 22.0% from 22.5% in the second quarter of 2006. Sales grew 5.4%, and earnings increased 2.8%. Combined sales at U.S. firms were up 7.2% compared with those of second-quarter 2006, while earnings increased 5.6%. The profit margin of 21.5% in the quarter was nearly even with the 21.8% posted in the year-ago period. European companies didn't do as well, with earnings dropping 0.8% based on a 2.9% rise in sales. Average profit margins were down slightly to 22.7%, compared with 23.6% in the second quarter of 2006. ...
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