Pfizer Inc. (PFE), GlaxoSmithKline plc (ADR) (GSK), Merck & Co., Inc. (MRK): Which Pharmaceutical Giant Faces the Steepest Patent Cliff?

Going forward, Merck & Co., Inc. (NYSE:MRK) does not boast a very strong pipeline. There are high hopes for a few potential blockbusters, but Merck’s future portfolio does not have a well-defined path forward. It is unclear how the company can fully replace lost Singulair sales.

Avoid steep patent cliffs

Large pharmaceutical companies such as Pfizer, GlaxoSmithKline, and Merck are allocating considerable resources to research and development, which will blunt the blow of losing any individual blockbuster to generic competition.

At the same time, some companies face steeper patent cliffs than others.

While Pfizer is a huge company and is massively profitable, the loss of Lipitor will undeniably serve as a drag on its results for some time, and the company cannot rely on strong performance from non-pharmaceutical related business segments.

Merck is seeing strength with its new diabetes drug, but the loss of Singulair in addition to broader weakness in the company’s other segments places it in a difficult position. Moreover, a pharmaceutical pipeline that should be considered iffy at best is a concern.

On the other hand, Glaxo is resilient in the current environment. Avandia is likely to retain its dominance for the foreseeable future, which should allow ample time for Glaxo to improve its already sterling inhaler positioning. With no looming threat of patent loss and a more diverse revenue split, Glaxo appears to be the big pharma stock on this list best positioned to face its patent cliff.

The article Which Pharmaceutical Giant Faces the Steepest Patent Cliff? originally appeared on and is written by Robert Ciura.

Robert Ciura has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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