pharmaceutical company analysis
Post on 14-Jan-2015
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PHARMACEUTICALMANUFACTURING
INDUSTRY
Financial analysis of the 5 largest companies in the pharmaceutical industry
Characteristics of Industry The companies in this industry develop
and manufacture drugs that treat a number of medical issues and diseases
This industry is a defensive industry, no matter the state of the economy people will still need their medicine and healthcare
•Roche•Novartis•GlaxoSmithKline•SanofiAventis•Teva
Roche Holdings AG $194.7 Billion $45.499 Billion
69.34% of Roche’s sales are outside of the U.S. Pharmaceuticals and Diagnostics
Key figures January-June
In millions % changeof CHF
2013 2012CER* CHF USD
Group Sales 23,295 22,423 5 4 3Pharmaceuticals Division 18,162 17,409 6 4 3Diagnostics Division 5,133 5,014 3 2 2Core operating profit 9,488 8,641 10 10Operating free cash flow 7,445 7,244 4 3IFRS Net income2 6,047 4,312 41 40Core earnings per share - 7.58 6.88 12 10 diluted
Sanofi-Aventis
139,072.80M $47,406,000,000
31% of net sales were in the United States 24%
31%
45% Western Europe
United States
Other
Teva
34.33 B Market Cap 20.32 B Sales Revenue Generic Pharmaceuticals 21% of its sales come from
Copaxone
Trouble……
GlaxoSmithKline Market Cap - $128,520,000,000 Revenue 2012 - $26,431,000,000 Consumer Health Care, Vaccines, Prescriptions Headquarters in London and Philadelphia Traded on NYSE and LSE
Japanese energy drink, Asthma cure
42.8
23.3
21.7
12.2
Percent of Total Sales by Regions
North America
Europe
EMAP
Japan
Novartis $195.14 Billion market cap $57,561,000,000 Novartis is based in Basel, Switzerland and operate in 140
countries Alcon is the largest and most profitable in eye care Sandoz second largest in generic drug companies Major products include: Diovan, Lotrel, Gleevec, Zometa,
and Neoral
Du-Pont Analysis
Asset Turnover
Debt Cushion & Liquidity
Operating and Financial Leverage
Roche Novartis GlaxoSmithKline
Sanofi- Aventis
Teva
DOL 2.74 3.37 2.51 3.92 4.83
DFL 1.26 1.06 1.12 1.10 1.21
DTL 3.44 3.59 2.82 4.29 5.86
DPS
2008 2009 2010 2011 20120
0.5
1
1.5
2
2.5
3
Roche Holdings AGNovartisGSKSanofiaventisTeva
COST OF CAPITAL
Roche NovartisN/A
GlaxoSmithKline
Sanofi Aventis Teva
COST OF EQUITY 9.32% 8.55% 9.3% 12% 10.72%
WEIGHTED AVG YTM 2.75% 0 2.609% 1.881% 3.09%
PERCENT EQUITY 92.6% 100% 88.27% 91.52% 82.23%
PERCENT DEBT 7.4% 0 11.73% 8.48% 17.77%
WACC 12.75% 8.55% 8.400% 11.123% 9.257%
Earnings Per Share
2008 2009 2010 2011 20120
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Roche Holdings AGNovartisGSKSanofiaventisTeva
Value of Firm
Roche Holdings AG Novartis GSK Sanofiaventis Teva0
50
100
150
200
250
300
350
Current price
Calced Price
CONCLUSION
Roche Holding appears to be the healthiest company.
Teva Pharmaceutical Industries Limited is currently poorest performer
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