Sector News

Tiny drugmakers top list of most profitable, but Shire and Gilead are there, too

May 8, 2015
Life sciences
Who are the most profitable companies in healthcare? Drug companies, with 7 out of 10 slots on a ranking by profit margin. Who are the most profitable drug companies? You might scratch your heads at all but a couple of names.
 
First, we have to take the top-ranked company with a grain of salt. AMAG Pharmaceuticals, a small drugmaker that built its fortunes on an anemia drug called Feraheme, came in first place in the ranking of healthcare companies by profit margin, compiled by Motley Fool. For 2014, AMAG’s profit margin amounted to 109%. That’s because of a one-time tax benefit that pushed net income to $143 million on just $124 million in sales. Needless to say, not a repeatable feat. AMAG’s most recent claim to fame was its $1.25 billion buyout of bankrupt Lumara Health last fall.
 
Next in line? PDL BioPharma, which typically ranks near the top of pharma, margin-wise. Its 2014 margin amounted to about 66%, Motley Fool says. It’s not a typical drugmaker, though; it makes most of its money on royalties, with 71% of 2014 revenue coming from drugs licensed to Roche’s Genentech unit.
 
The third-ranking company is more interesting: It, too, is a tiny business, relatively speaking, with just $57.4 million in first-quarter revenue. But Enanta Pharmaceuticals’ success depends on a very big disease–hepatitis C–and its revenue right now depends on AbbVie, which owes Enanta milestones and royalties on the newly approved cocktail Viekira Pak. For instance, $50 million of Enanta’s Q1 revenue was a milestone payment for European approval of that treatment. Its 2014 profit margin amounted to 65%.
 
Four other small drugmakers are on the list–POZEN, at a 61% margin; the generics maker Taro Pharmaceutical, at 52%; ANI Pharmaceuticals with 51%; and Vanda Pharmaceuticals at 40%.
 
In fact, the only two pharma companies of any size whose margins hit such heights were these: Shire, which specializes in rare diseases, gastrointestinal drugs and ADHD meds, and is aiming for $10 billion in sales by 2020. And Gilead Sciences, with its hugely successful hep C franchise and its stable of high-performing HIV drugs. Shire’s margin amounted to 56% last year, while Gilead’s stood at 48%.
 
By Tracy Staton
 

Related News

September 18, 2020

Eli Lilly, Amgen join forces to scale production of COVID-19 antibody cocktails

Life sciences

Months of fervid research have whittled away most potential options to treat patients with COVID-19, a group of antibody cocktails still hold promise. Eli Lilly believes so strongly in its contender that it’s […]

September 16, 2020

Takeda unveils new Boston R&D manufacturing center for cell therapy pipeline push

Life sciences

Japanese drugmaker Takeda has trumpeted its plan in recent years to cut billions of dollars in costs and pivot around oncology and rare diseases. A key part of that strategy […]

September 15, 2020

AstraZeneca, Oxford restart stalled COVID-19 test as Pfizer ramps up trial numbers for its vaccine

Life sciences

Just under a week after it stopped its key phase 3 pandemic vaccine test, AstraZeneca and the University of Oxford have been given the green light to restart in the […]