The Biggies

  Big Pharma

The term Big Pharma is used to refer collectively to the global pharmaceutical industry. According to Steven Novella the term has come to connote a demonized form of the pharmaceutical industry.

Pfizer Inc (US) Pfizer is the world's largest research-based pharmaceutical company.

What are the Top 15 Pharmaceutical Companies in the World?

15. Novo Nordisk (Denmark) 

Revenue from Pharmaceutical Drug Sales: $18.29 billion

Total Revenue: $18.29 billion

Percent of Revenue From Pharmaceutical Drug Sales: 100%

Estimated R&D Spend: $2.00 billion

Number of Employees: 43,250

Revenue Per Employee: $422,000

Novo Nordisk is a Danish pharmaceutical company founded in 1923, with global headquarters in the Danish town of Bagsvaerd. Its key products are diabetes care medication. Over 29 million patients use their products and the company produces almost 50% of the world’s insulin. Novo Nordisk aims to have all its production powered by renewable energy by 2020.

14. Bayer AG (Germany) 

Revenue from Pharmaceutical Drug Sales: $19.57 billion

Total Revenue: $47.30 billion

Percent of Revenue From Pharmaceutical Drug Sales: 41%

Estimated R&D Spend: $3.41 billion

Number of Employees: 103,800

Revenue Per Employee: $455,000

Bayer, the creators of world-famous drug Aspirin, is a German pharmaceutical company that was established nearly 150 years ago in 1863. Bayer’s best-selling drugs include Xarelto, used to treat blood clots, an injection Eylea, for retina disease and Rennie antacid tablets, one of the biggest selling branded over-the-counter medications in Europe.

13. Gilead Sciences (US) 

Revenue from Pharmaceutical Drug Sales: $22.10 billion

Total Revenue: $22.10 billion

Percent of Revenue From Pharmaceutical Drug Sales: 100%

Estimated R&D Spend: $9.10 billion

Number of Employees: 11,800

Revenue Per Employee: $1,872,000

Gilead was founded in 1987 in California, US and since then, has grown to become one of the world’s largest biopharmaceutical companies. They are a research-based biopharmaceutical company that discovers, develops and commercializes innovative medicines. Gilead Sciences focused on virology, hepatology, hematology, oncology, cardiovascular, inflammation and respiratory diseases

12. Amgen Inc (US) 

Revenue from Pharmaceutical Drug Sales: $22.20 billion

Total Revenue: $22.20 billion

Percent of Revenue From Pharmaceutical Drug Sales: 100%

Estimated R&D Spend: $4.10 billion

Number of Employees: 23,400

Revenue Per Employee: $948,000

Amgen Inc. is an American multinational biopharmaceutical company headquartered in California, United States and is one of the world’s largest independent biotechnology firm. In 2013, the company’s largest selling product lines were Neulasta/Neupogen, two closely related drugs used to prevent infections in patients undergoing cancer chemotherapy; and Enbrel, a tumor necrosis factor blocker used in the treatment of rheumatoid arthritis and other autoimmune diseases. Other products include Epogen, Aranesp, Sensipar/Mimpara, Nplate, Vectibix, Prolia and XGEVA.

11. Eli Lilly (US) 

Revenue from Pharmaceutical Drug Sales: $22.30 billion

Total Revenue: $22.30 billion

Percent of Revenue From Pharmaceutical Drug Sales: 100%

Estimated R&D Spend: $5.60 billion

Number of Employees: 33,800

Revenue Per Employee: $659,000

Eli Lilly is an American global pharmaceutical company. It was founded by Eli Lilly in 1876 and has its headquarters in Indianapolis, Indiana in the United States. The world owes Lilly for the first mass-production of Penicillin, Salk Polio vaccine and insulin and is the largest producer and distributor of psychiatric medications in the world. Other drugs produced by Lilly are namely Arzoxifine, Efient, Olanzapine, etc.

10. AstraZeneca plc (UK) 

Revenue from Pharmaceutical Drug Sales: $23.57 billion

Total Revenue: $24.38 billion

Percent of Revenue From Pharmaceutical Drug Sales: 96%

Estimated R&D Spend: $6.00 billion

Number of Employees: 61,100

Revenue Per Employee: $405,000

AstraZeneca plc was founded 1999, through the merger of the Sweden-based Astra AB and the UK-based Zeneca Group, is a Swedish-British multinational pharmaceutical and biologics company. It specializes in prescriptive medicines including Carbocaine, Naropin, Betaloc, Zestril, Lexinor, Cubicin, Zomig, Tomudex, and a variety of other medicines in the areas of oncology, neuroscience, gastrointestinal, etc. The acid reflux medication called Nexium is its leading product at $5.2 billion. It is also the manufacturer of drugs for cholesterol treatment called Crestor and an antipsychotic drug called Seroquel.

9. GlaxoSmithKline plc (UK)

Revenue from Pharmaceutical Drug Sales: $24.70 billion

Total Revenue: $33.75 billion

Percent of Revenue From Pharmaceutical Drug Sales: 73%

Estimated R&D Spend: $5.05 billion

Number of Employees: 99,400

Revenue Per Employee: $339,000

GlaxoSmithKline plc is a multinational company based in the United Kingdom dealing in the fields of pharmaceutical, biologics, vaccines and consumer healthcare. GSK was formed by the merger of Glaxo Wellcome plc and SmithKline Beecham plc in 2000. It manufactures products for various diseases including mental health, diabetes, asthma, cancer, virus control, etc. GSK also manufactures nutritional products, drinks, and other healthcare goods like Horlicks, Sensodyne, Boost, etc. Its top-selling drug is Advair and is used to treat asthma and chronic obstructive pulmonary disorder treatment.

8. Bristol-Myers Squibb (US) 

Revenue from Pharmaceutical Drug Sales: $26.15 billion

Total Revenue: $26.15 billion

Percent of Revenue From Pharmaceutical Drug Sales: 100%

Estimated R&D Spend: $6.15 billion

Number of Employees: 30,000

Revenue Per Employee: $871,000

Bristol-Myers Squibb was formed in 1989 through the merger of the Squibb Corporation and Bristol Myers and Company. Today, it has it’s headquarters in New York City, US and produces pharmaceuticals and biologics for the treatment of a number of conditions including HIV and hepatitis. They were also one of the first companies to begin research and development into anti-cancer drugs in the 1970’s.

7. Sanofi S.A. (France)

Revenue from Pharmaceutical Drug Sales: $27.98 billion

Total Revenue: $39.19 billion

Percent of Revenue From Pharmaceutical Drug Sales: 71%

Estimated R&D Spend: $6.54 billion

Number of Employees: 105,000

Revenue Per Employee: $373,000

Sanofi-Aventis, is a French multinational pharmaceutical company with its headquarters located in Paris, France. It conducts research and development and manufactures pharmaceutical products sold primarily in the prescription market. Over-the-counter medicines are also developed by the company. Various drugs manufactured by the company include Aflibercept, Jevtana, Humenza vaccine, Iniparib and Otamixaban. Sanofi-Aventis was formed in 2004 by the merger of Aventis and Sanofi-Synthélabo and later in 2011 changed the name to Sanofi.

Revenue from Pharmaceutical Drug Sales: $33.27 billion

Total Revenue: $33.27 billion

Percent of Revenue From Pharmaceutical Drug Sales: 100%

Estimated R&D Spend: $6.40 billion

Number of Employees: 30,000

Revenue Per Employee: $1,100,000

6. AbbVie Inc (US) 

AbbVie is an American biopharmaceutical company formed in 2013 and was formed when Abbott Laboratories announced its plan to separate into two publicly traded companies. It was decided that the “new” Abbott Laboratories would specialize in diversified products including medical devices, diagnostic equipment and nutrition products, while AbbVie would operate as a research-based pharmaceutical manufacturer that specialises in making small molecule drugs for patients worldwide.

The company focuses on therapy areas such as dermatology, oncology, neurological disorders and metabolic diseases.

AbbVie’s most well known for its rheumatoid arthritis med Humira (Humira makes up more than 60% of AbbVie’s total sales) along with Imbruvica, Lupron, Veikira and Synthroid.

5. Merck & Co., Inc (US)

Revenue from Pharmaceutical Drug Sales: $41.75 billion

Total Revenue: $46.84 billion

Percent of Revenue From Pharmaceutical Drug Sales: 89%

Estimated R&D Spend: $9.87 billion

Number of Employees: 56,000

Revenue Per Employee: $836,000

Merck & Co., Inc is an American pharmaceutical company with its headquarters located in Whitehouse Station, New Jersey. Kenneth Frazier is the chairman, president and CEO of the company and it was founded in 1891 as a subsidiary of Merck KGaA. It came out as an independent company in 1917 after being taken over by US Government during World War I.

4. Johnson & Johnson (US)

Revenue from Pharmaceutical Drug Sales: $42.19 billion

Total Revenue: $82.06 billion

Percent of Revenue From Pharmaceutical Drug Sales: 51%

Estimated R&D Spend: $11.40 billion

Number of Employees: 132,200

Revenue Per Employee: $620,000

Johnson & Johnson is a US-based multinational company that manufactures medical devices, pharmaceuticals and consumer packaged goods. It was founded in 1886 by Robert wood Johnson I, James Wood Johnson and Edward Mead Johnson. The Company’s headquarters is located in New Brunswick, New Jersey. Johnson & Johnson is a leading name in many household items like Johnson & Johnson baby products, Neutrogena skin and beauty products, Band-Aid, Clean and clear facewashes, etc. The other drugs manufactured by it are Bapineuzumab, Ceftobiprole, Dacogen, Procrit, Rivaroxaban, Topamax, etc.

3. Novartis International AG (Switzerland)

Revenue from Pharmaceutical Drug Sales: $48.67 billion

Total Revenue: $48.67 billion

Percent of Revenue From Pharmaceutical Drug Sales: 100%

Estimated R&D Spend: $9.40 billion

Number of Employees: 108,700

Revenue Per Employee: $472,000

Novartis International AG, a multinational pharmaceutical company is based in Basel, Switzerland. Novartis has been on the face of the pharmaceutical industry for about 250 years owing to its formation by the merger of Swiss companies Ciba-Geigy and Sandoz Laboratories in 1996. Novartis produces a range of products including vaccines, contact lenses, over-the-counter drugs, veterinary medicines, etc. Novartis is a manufacturer of drugs including Clozapine, Diclofenac, Carbamazepine, Valsartan (Diovan) and Glivec.

2. Hoffmann-La Roche AG (Switzerland)

Revenue from Pharmaceutical Drug Sales: $50.00 billion

Total Revenue: $63.35 billion

Percent of Revenue From Pharmaceutical Drug Sales: 78%

Estimated R&D Spend: $12.03 billion

Number of Employees: 94,500

Revenue Per Employee: $670,000

Hoffmann-La Roche is a Swiss global healthcare company founded by Fritz Hoffmann-La Roche after whom the company is named, in 1896. Its headquarters is located in Basel, Switzerland. Other companies owned by Roche are Genentech, Chugai pharmaceuticals and Ventana. It was the first company to produce synthetic vitamin C at a large scale under the brand name of Redoxon. Its leading drug is Herceptin a medication for breast cancer. The various drugs produced by Roche include Accutane, Bactrium, Cellcept, Herceptin, Invirase, Tamiflu, Rohypnol, etc. It also manufactures a range of Diabetes management products under the brand name Accu-check.

1. Pfizer Inc (US)

Revenue from Pharmaceutical Drug Sales: $51.75 billion

Total Revenue: $51.75 billion

Percent of Revenue From Pharmaceutical Drug Sales: 100%

Estimated R&D Spend: $8.65 billion

Number of Employees: 96,500

Revenue Per Employee: $536,000

Pfizer is the world’s largest research-based pharmaceutical company. Its research headquarters are located in Groton, Connecticut, America. Pfizer has developed many medicines and vaccines like Sutent, Zithromax, apixaban, Macugen, Lyrica, latreperdine, etc. in the areas of oncology, infections and infestations, cardiology, opthamalogy, neurology and psychiatry. Its top selling drug is Lipitor. The company was founded in 1849 in New York City by cousins Charles Pfizer and Charles Erhart.

Why are drugs so expensive?

Developing a new prescription medicine that gains marketing approval is estimated to cost drugmakers $2.6 billion according to a recent study by Tufts Center for the Study of Drug Development and published in the Journal of Health Economics.

A Tough Road: Cost To Develop One New Drug Is $2.6 Billion; Approval Rate for Drugs Entering Clinical Development is Less Than 12%*

*https://www.policymed.com/2014/12/a-tough-road-cost-to-develop-one-new-drug-is-26-billion-approval-rate-for-drugs-entering-clinical-de.html#:~:text=Developing%20a%20new%20prescription%20medicine,the%20Journal%20of%20Health%20Economics.

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Big Tobacco

Big Tobacco is a name used to refer to the largest global tobacco industry companies. The five largest tobacco companies are Philip Morris International, Altria, British American Tobacco, Imperial Brands, and Japan Tobacco International.

Targeting Youth

The Big Tobacco industry works hard to hook kids early to secure their next generation of customers, since 9 of 10 adult smokers start before age 18. That's why tobacco companies develop products and use tactics to attract children.

(Learned about mergers and acquisitions from former LAPD Officer Mike, in my first business class, at Woodbury University.)

Phillip Morris Acquisitions

In 1970, Philip Morris made the first of several acquisitions with the purchase of Miller Brewing Company. In 1985, Philip Morris Companies Inc. became a holding company and the parent of Philip Morris Inc. and bought General Foods. The acquisition of Kraft Foods came in 1988, after which Kraft and General Foods became Kraft General Foods.[5]

Although it had begun investing in the homebuilder by 1969, Philip Morris purchased Southern California's Mission Viejo Company in its entirety for $52 million during 1972. Philip Morris continued to hold on to this investment until 1997, finally selling the division off to J.F. Shea Company.[7]

In the 1970s, in response to smokers’ health concerns, Philip Morris introduced the “Light” cigarette - which was later found to be no safer than any others.[8]

In 1976, Marlboro became the leading brand in the U.S.; Morris operated as the largest seller of tobacco in the U.S. and the second-largest in the world.

In 2001, Kraft Foods launched an initial public offering (IPO) for 11.1% of the company that took in $8.7 billion, making it the second-largest IPO in American history at the time.[9]

In 2002, Miller Brewing and South African Breweries became SABMiller, the second-largest maker of beer in the world, though Philip Morris kept an interest in the merged company.

R.J. Reynolds Acquisitions

In 1979, R.J. Reynolds bought Del Monte Foods for $618-million and in 1985, it acquired Nabisco Brands for $4.9-billion.

On April 27, 1989, RJR Nabisco announced it would move its headquarters to the New York City area.[10]

As a result of the acquisition, RJR Nabisco divested the following divisions:

Nabisco's UK operations (including Smith's and Walkers), Belin of France, and Saiwa of Italy were sold to BSN.[11] Smith's and Walkers were swiftly resold to PepsiCo.[12]

Chun King was sold to Yeo Hiap Seng.[13]

Associated Biscuits International (consisting of 38% of India's Britannia and 40% of Pakistan's English Biscuit Manufacturers) to Britannia Industries.[14]

Fresh Del Monte Produce was sold to Polly Peck.[15]

Del Monte Foods was sold to Merrill Lynch, Citicorp Venture Capital, and Kikkoman. Del Monte's Asia operations (outside the Philippines) were separately sold to Kikkoman.[16]

The company's 20% stake in ESPN Inc. was sold to Hearst Communications.

Another major consequence of the buyout was that according to United States Department of Labor, in its report "American Workplace", over 2,000 workers subsequently lost their jobs, which 72% eventually replaced, but earning less than half of their previous incomes, suggesting that it took most of those who lost their jobs an average of 5.6 months to find new employment.[17]

On March 21, 1991, RJR Nabisco Holdings Corp. became a publicly traded stock. In March 1999, RJR Nabisco announced the sale of the international division of R. J. Reynolds Tobacco, and in June of that year, the company sold the remainder of R. J. Reynolds Tobacco to stockholders. The parent company became Nabisco Group Holdings and owned 80.5 percent of Nabisco Holdings. In 2000, Philip Morris bought Nabisco Holdings. Soon after that, R. J. Reynolds Tobacco Holdings, Inc., first traded in June 1999, announced the acquisition of Nabisco Group Holdings. The deal was completed in December 2000.[6][18]

Other mergers (until that class I had no idea that this shit happened, especially tobacco and food [bleh])

A list of the biggest mergers and acquisitions

Vodafone and Mannesmann merger (1999) - $202.8B

AOL and Time Warner merger (2000) - $182B

Gaz de France and Suez merger (2007) - $182B

Verizon and Vodafone acquisition (2013) - $130B

Dow Chemical and DuPont merger (2015) - $130B

United Technologies and Raytheon merger (2019) - $121B

AT&T and Time Warner merger (2018) - $108B

AB InBev and SABMiller merger (2015) - $107B

Glaxo Wellcome and SmithKline Beecham merger (2000) - $107B

Heinz and Kraft merger (2015) - $100B

Bristol-Myers Squibb and Celgene merger (2019) - $95B

Royal Dutch Petroleum and Shell merger (2004) - $95B

Pfizer and Warner Lambert merger (1999) - $90B

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A List of 16 Successful Mergers and Acquisitions

Verizon and Verizon Wireless

Dow and DuPont combine businesses

Anheuser-Busch InBev and SAB Miller

Heinz and Kraft

AT&T and Time Warner tie-up

Charter Communications and Time Warner Cable merger

Disney and 21st Century Fox

CVS and Aetna

Cigna and Express Scripts

United Technologies and Raytheon

Dell and EMC Corporation

Actavis and Allergan Inc

Royal Dutch and BG group

Saudi Aramco and SABIC

Praxair and Linde AG

Unilever PLC with Unilever NV

5 Big Mergers and Their Battle with Antitrust Laws

Exxon & Mobil: An $80.3 Billion Deal

In June 1998, Exxon and Mobil announced a plan to merge the two oil companies in an $80.3 billion deal. The Federal Trade Commission concluded that this deal would violate federal antitrust laws. As a result, the combined company was required to divest 2,431 Exxon and Mobil gas stations across the United States. This was the largest retail divestiture in history. The combined company resulted in Exxon Mobil (XOM ) – the largest U.S. company until it was surpassed by Apple (AAPL ) in 2012.

Be sure to also check out Stock Market Sectors: A Dividend.com Primer.

Reynolds American & Lorillard: A $27.4 Billion Deal

In July 2014, Reynolds American (RAI) announced that it had reached an agreement to merge with Lorillard (LO) in a $27.4 billion deal. The combined company would result in the second largest tobacco company behind Altria (MO ). The two companies later received notices from the Federal Trade Commission requesting more information about the merger. The deal is still waiting for approval.

Comcast & Time Warner Cable: A $45 Billion Deal

In February 2014, Comcast (CMCSA ) and Time Warner Cable (TWC) announced a $45 merger deal. The deal was highly criticized by the public as many considered it to be harmful to many of the stakeholders. The deal is currently being examined by the Department of Justice and the FCC.

Be sure to check out Companies That Own the World’s Most Popular Brands.

AT&T & T Mobile: A $15 Billion Deal

In March 2011, AT&T (T ) and T Mobile announced that they had reached a deal to merge. The deal would involve AT&T obtaining an additional 33.7 million customers, making it the largest mobile phone company in the United States. In August, the Antitrust Division reported that it was actively trying to block the merger. In December of 2011, AT&T announced that it would no longer attempt to get the deal passed.

U.S. Airways & American Airlines: An $11 Billion Deal

In January 2012, U.S. Airways Group announced that it would merge with American Airlines (AAL) in an $11 billion deal. This deal came after American Airlines sought to find a merger as part of its Chapter 11 bankruptcy protection. The Department of Justice opposed the deal, as it would lead to higher airline fees. The deal was later approved when the two airlines agreed to give discount airlines additional access to several major U.S. airports.

Be sure to also read Dividend.com’s Cheatsheet to Analyzing Transportation Stocks.

The Bottom Line

When deals are announced, it is common for the stock prices of the companies involved to have a major reaction. As investors it is important to understand that the major mergers and acquisitions can carry risks as they can be closely examined, and sometimes fail.

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Big Government

Big government is a pejorative term for a government or public sector that is considered excessively large or unconstitutionally involved in certain areas of public policy or the private sector.

Commentators who use the term are often concerned about government involvement in the delivery of public goods and the formulation and implementation of laws and policies concerning civil rights, social justice and social welfare.[3][4] However, such commentators may also be supportive of capital punishment, stronger executive powers for government, a larger criminal justice system (particularly in terms of the numbers of police officers and prisons) and a powerful military.

Biden, Calling for Big Government, Bets on a Nation Tested by Crisis

The president’s speech laying out trillions of dollars in new economic proposals plays to voters’ warm feelings toward federal aid in the coronavirus pandemic. (https://www.nytimes.com/2021/04/28/business/economy/biden-spending-big-government.html)