Pharma hasn't been racing toward the patent cliff in one big herd like lemmings. Because drugmakers' key patents aren't all expiring at the same time, it's more like cliff diving. One company takes a plunge, and then another, and then another, with some companies going back for repeat dives as their second or third megablockbuster loses patent protection.
So, as the Wall Street Journal points out, new numbers about sales lost to the patent cliff have to be taken in that context. Yes, $250 billion in sales risk falling by the wayside between now and 2015, and that's huge. But those losses will disproportionately hit those companies that haven't yet suffered as much from patent losses as their rivals have.
Which puts some companies in a better position--swimming ahead, you might say. Think GlaxoSmithKline, which has worked its way past some patent expirations, the WSJ says. And that has some investors looking ahead, past the dreaded patent cliff. Analysts are expecting to upgrade ratings on pharma stocks as time passes, on a company-by-company basis, and overall investor sentiment could improve as early as year's end.
Some pharma stocks have almost nowhere to go but up, they've taken such a beating over the past several years. Investors value some companies as if their fortunes won't ever completely turn around. "That's an incredibly pessimistic view," Liberum Capital analyst Naresh Chouhan told the WSJ. One that isn't likely to last forever.
- read the WSJ story