Wednesday, October 13, 2021

The Calcbench database of Segments, Rollforwards and Breakouts is quite the nifty tool, able to help analysts find all sorts of specific, segment-level disclosures and insights.

Our case in point for today: top-selling pharmaceutical drugs.

People might not know this, but blockbuster drugs (those grossing $1 billion or more in annual sales) do typically qualify as a separate operating segment for the pharmaceutical firms selling those drugs. Which means you can look up sales by operating segment in the pharmaceutical sector, and find revenue figures for the individual drugs that you might see advertised on television or discuss with your doctor.

So Calcbench did that the other day. Table 1, below, shows the 20 biggest blockbuster drugs based on 2020 sales.

So we can see that even though AbbVie ($ABBV) had the single biggest blockbuster with its Humira drug for Crohn’s disease and related illnesses, Bristol Myers Squibb ($BMY) was actually the biggest performer overall because it has three blockbusters on the list.

Even better, once you know the revenues from specific blockbuster drugs, one can then calculate the percentage of total revenue those blockbusters provide to their respective pharmaceutical manufacturers. Figure 2, below, shows those percentages for various firms in Big Pharma.

Analysts can then use that information in various other ways. For example, if you know when a blockbuster is going to lose patent protection, you can model when the pharma firm might see a significant drop in revenue as generic competitors enter the market, and how that drop might affect the firm’s overall revenues. You could also ask the CFO or CEO on the next earnings call how they plan to replenish the revenue pipeline with other drug candidates still in development.

Bonus for Calcbench subscribers: We even have an Excel template you can use with all the pharma formulas already baked into the spreadsheet, so you can see how revenue from blockbuster drugs has changed over the last few years. (The template tracks many more specific drugs than the Top 20 we showed in Table 1.)

You do need to be a Calcbench subscriber for the template to work. Then, if you want to go down the rabbit hole, well…

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