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Too big to succeed? The return of 100 billion market capitalization pharmaceutical companies is not as good as that of the S&P 500

 Last Update: 2022-01-26
 Source: Internet
 Author: User

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Today, an investor named Maxx Chatsko analyzed the total investment return (share value + dividends) of 18 pharmaceutical companies with a market value of more than $100 billion from reaching this market value to last September
.

Compared with the S&P 500 index, except for Johnson & Johnson, Novo Nordisk, and Moderna, the total investment return after becoming a billion-dollar giant is not as good as that of the S&P.

Drug source analysis

Why the return on investment of such a highly innovative and socially important sector as a leading pharmaceutical company is so unbearable
.

The first is volume.

The more important question is how did the pharmaceutical company reach the market value of 100 billion yuan
.

Unlike McDonald's, which sells more than 2 billion hamburgers every year, drug companies usually only rely on the emergence of a few important products to become a Big Mac

Unlike the situation where burgers will always be sought after by foodies, drugs have a life cycle
.

Patents are a key factor, especially for small-molecule drugs, whose value will drop significantly after the patent expires

This data also shows that even top pharmaceutical companies are unable to fight back in the face of the complexity of new drug discovery, and more sustainable discovery of blockbuster drugs is the only way for high-tech giant pharmaceutical companies to beat burger restaurants
.

Now multiple technology platforms such as gene editing, gene therapy, RNAi, mRNA, protein degradation, etc.

Original link: https://7investing.

Original link: https://7investing.
com/articles/why-are-100-billion-drug-developers-such-lousy-investments/

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