Top 5 Drug Companies in USA and Their China Reliance

In this article, we will be taking a look at the top 5 drug companies in USA and their China reliance. To read our detailed analysis of the pharmaceutical sector, you can go directly to see the Top 10 Drug Companies in USA and Their China Reliance.

5. Bristol-Myers Squibb Company (NYSE:BMY)

Total Revenue in 2021: $46.39 billion

Bristol-Myers Squibb Company (NYSE:BMY) is based in New York City and is one of the largest pharmaceutical companies in the world. It has consistently ranked on the Fortune 500 list of the largest US corporations.

Bristol-Myers Squibb Company (NYSE:BMY) was initiated with an Overweight rating at Cantor Fitzgerald by analyst Olivia Brayer on January 17. The analyst also placed a $95 price target on the stock.

The company positioned itself well in 2023 through the success of three of its therapies: Revlimid, Eliquis, and Opdivo. Over the past three years, Bristol-Myers Squibb Company (NYSE:BMY)  has generated about $40 billion in operating cash flow. It also generated about $10.8 billion in product sales in 2022. The company has been focusing on marketing its arthritis drug, Orencia, in China, which it is targeting as a profitable pharma market due to its economic power and large population.

Investment management company RGA Investment Advisors mentioned Bristol-Myers Squibb Company (NYSE:BMY) in its third-quarter 2022 investor letter. Here’s what the firm said:

“Bristol-Myers Squibb Company (NYSE:BMY), which we referenced above, boasts a double digit free cash flow yield that gets divided roughly equally between repurchases, a dividend and M&A in what is the best environment for acquisitions perhaps ever. In 2019, BMY acquired Celgene, who had one of the better corporate development programs in the industry. We view this as a great outlet for us as generalists considering a company like BMY should truly thrive with the ability to acquire outstanding assets and science at depressed valuations. We touched on the Turning Point acquisition above and we expect the company to be increasingly active in the M&A landscape. Importantly, Celgene also came to BMY with a phenomenal CAR-T platform. CAR-T is a cell therapy that activates the body’s immune system to target cancers. This will be a key growth vector alongside M&A in overcoming the company’s patent cliff.”

4. Merck & Co., Inc. (NYSE:MRK)

Total Revenue in 2021: $48.7 billion

Merck & Co., Inc. (NYSE:MRK) operates through its Pharmaceutical and Animal Health segments. It focuses on the areas of oncology, hospital acute care, immunology, and neuroscience.

On January 4, Geoff Meacham at BofA upgraded Merck & Co., Inc. (NYSE:MRK) shares from Neutral to Buy.

Over the past 10 years, Merck & Co., Inc. (NYSE:MRK) has seen its revenues grow by 27%. Over the same period, the company’s earnings per share have also increased by 184%. It also has a dividend compound annual growth rate of 7% over the past five years, and a dividend yield of 2.74% as of January 31. China is one of Merck & Co., Inc.’s (NYSE:MRK) eight strategic countries, and it focuses on the pharmaceutical, chemical, and life science sectors in the Chinese market, making it heavily reliant on the country.

Baron Funds, an investment management company, mentioned Merck & Co., Inc. (NYSE:MRK) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“Merck & Co., Inc. (NYSE:MRK) is a large-cap pharmaceutical company with a deep heritage in drug discovery. Share gains were led by the continued growth of key asset Keytruda, the leading immune oncology agent used to treat a variety of cancers. Shares also benefited from increased investor interest as Merck proves its ability to scale its Gardasil vaccine that had previously been constrained by supply issues. We retain long-term conviction, as we expect Keytruda to solidify its position as the best-selling biopharmaceutical drug of all time.”

3. AbbVie Inc. (NYSE:ABBV)

Total Revenue in 2021: $56.2 billion

AbbVie Inc. (NYSE:ABBV) is a biotech company based in North Chicago, Illinois. It offers a wide variety of products to treat conditions such as active rheumatoid arthritis and moderate to severe plaque psoriasis.

An Overweight rating was kept on AbbVie Inc. (NYSE:ABBV) shares on January 26 by analyst Chris Scott at JPMorgan, alongside a $190 price target.

Between 2021 and 2023, AbbVie Inc. (NYSE:ABBV) has returned a total of 38%, including dividends. The company has seen sales increases in 2022, with its core immunology segment recording a sales increase of 15% year-over-year in the third quarter. The immunology segment is heavily reliant on China since AbbVie Inc. (NYSE:ABBV) sources active pharmaceutical agents used in the production of drugs for immunology from the country.

Baron Funds, an investment management company, mentioned AbbVie Inc. (NYSE:ABBV) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“AbbVie Inc. (NYSE:ABBV) develops inflammatory, oncology, and aesthetic drugs. Shares rose primarily due to the rotation into large-cap pharmaceutical stocks trading at low valuations. Investors continue to be focused on the rate of erosion of the Humira franchise upon patent expiration in 2023, which we think is less important over the long term than the growth of novel franchises like Rinvoq and Skyrizi. We retain conviction given AbbVie’s low valuation and growth opportunities.”

2. Pfizer Inc. (NYSE:PFE)

Total Revenue in 2021: $51.75 billion

Pfizer Inc. (NYSE:PFE) is a New York-based pharmaceutical company. It offers medicines in the areas of cardiovascular metabolic and women’s health, biologics, small molecules, immunotherapies, and biosimilars.

Mohit Bansal holds an Equal Weight rating and a $50 price target on Pfizer Inc. (NYSE:PFE) shares as of January 17.

Pfizer Inc. (NYSE:PFE) has an impressive historic record of stock price gains. Between 1980 and 2022, the company’s shares rose by 166.43%. At the close of September 2022, it had $36 billion in cash and liquid investments. The company sources active pharmaceutical ingredients used in the production of antibiotics, cardiovascular drugs, and oncology drugs from China, making it heavily reliant on the country.

1. Johnson & Johnson (NYSE:JNJ)

Total Revenue in 2021: $53.9 billion

Johnson & Johnson (NYSE:JNJ) is a pharmaceutical company based in New Brunswick, New Jersey. It offers baby care products as well, under the Johnson’s and Aveeno brands.

A Buy rating was reiterated on Johnson & Johnson (NYSE:JNJ) shares on December 12 by analyst Joanne Wuensch at Citigroup. The analyst also placed a $205 price target on the stock.

It has been operating in China for over 30 years, and is reliant on the country because it sources raw materials for its pharmaceuticals from there. Over the past three decades, the company has also created a huge customer base in China, which significantly contributes to its revenues.

See also 15 Biggest European Pharmaceutical Companies and 10 Best Pharma Dividend Stocks To Invest In.