Europe

GLOBAL INVESTOR 1.14 — 28
Switzerland:
A pharmaceutical powerhouse
In a science-driven industry such as the pharmaceutical industry, a commitment to sustained
R&D investment is a crucial factor in order to attract the best scientists, in our view. This is not only
important to increase the success of developing drugs in-house, but also when it comes to judging
the merits of in-licensing opportunities. Switzerland has a long history of expertise in chemical/
pharmaceutical sciences and is home to two of the world’s top pharma companies.
Roche has a unique combination
of pharma and diagnostics
Roche is the world’s leader in oncology and
in vitro diagnostics. With its acquisition of
Genentech, the company has secured access
to some of the world’s leading scientists and
most promising pipeline assets. Owing to
Roche’s unique combination of a pharma and
a diagnostics business under one roof, it is
well-positioned in the development of targeted
and personalized treatments. Here it
becomes more and more important to understand
the molecular signatures of diseases in
order to stratify patients into well-defined
patient pools, thereby increasing the clarity
of the signals in clinical trials and ultimately
increasing the chances of success.
Novartis follows a strategy of focused
Novartis has leading positions in all three of
its divisions. It is number two worldwide in
oncology (behind Roche) and generics (behind
Teva) and, with Alcon, it owns the world’s
leading ophthalmology business. With its own
unique combination of businesses, Novartis
covers a broad spectrum of healthcare demand
with innovative products, as well as
low-cost alternatives in the form of generics.
Key strengths of the company, in our view,
include the benefits of having an independent
research organization (Novartis Institutes for
BioMedical Research), as well as the complementary
know-how in product innovation
(pharma) and process innovation (generics).
Top 10 corporate R&D spenders
Pharmaceutical companies are among the biggest spenders on R&D worldwide.
Roche and Novartis lead their peers on this metric.
Top 10 pharmaceutical
companies by size of pipeline
A company’s pipeline is its source of future revenue growth. Again, Roche and Novartis are
leaders in terms of number of pipeline drugs, a large proportion of which originate in-house.
Rank Company
Source: Citeline Pharma R&D Annual Review 2014, Bloomberg, Credit Suisse
Headquarters
Source: Bloomberg, Credit Suisse
R&D spending
(bn USD)
1 Volkswagen Germany Automotive 13.5
Rank Short name Headquarters Industry
2 Samsung South Korea Computing and electronics 13.5
3 Intel USA Computing and electronics 10.6
4 Microsoft USA Software and Internet 10.4
5 Roche Switzerland Healthcare 10.0
6 Novartis Switzerland Healthcare 9.9
7 Toyota Japan Automotive 9.1
8 Johnson & Johnson USA Healthcare 8.2
9 Google USA Software and Internet 8.0
10 Merck & Co. USA Healthcare 7.5
No. of drugs
in pipeline 2014
% of originated
drugs (2013)
R&D expenditure
2013A (bn USD)
1 GlaxoSmithKline UK 261 57% 6.1
2 Roche Switzerland 248 79% 10.0
3 Novartis Switzerland 223 73% 9.9
4 Pfizer USA 205 67% 6.7
5 AstraZeneca UK 197 70% 4.8
6 Merck & Co. USA 186 56% 7.5
7 Sanofi France 180 45% 6.3
8 Johnson & Johnson USA 164 52% 8.2
9 Bristol-Myers Squibb USA 133 74% 3.7
10 Takeda Japan 132 50% 3.5