Analysing pharmaceutical companies

The best start to understanding the pharmaceutical sector lies in the main revenue driver, and sources of shareholder value, in a pharmaceutical company:

1. existing, marketed, products,
2. pipelines.

Assessing pipelines is harder, because sales are less predictable.

Other factors that commonly affect a pharmaceutical company's ability to generate revenues include:

1. the existence (or not) of a sales force able to sell its products, and
2. the ability to add new products to the early stage pipeline.

These, and other important issues, are described on the following pages:

• Product types
• Sizes and specialisations of pharmas
• Currently marketed pharmaceuticals
• Patent and exclusivity expiries
• Approval processes
• Pipelines and R & D
• Risks and trends