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Pharma R&D spending in Q3.

R&D spending by the top 10 pharmaceutical companies showed a double-digit rise for the third quarter of 2002. Lead by double-digit increases in spending by AstraZeneca, Merck. Novartis and Pharmacia, spending by the top 10 pharmaceutical companies increased 10.5% compared to the third quarter of 2001 to more than $6.9 billion. Sequentially, the trend is also upwards as these same companies showed only a 7.5% increase in R&D spending for the first half of 2002 (see IBO 7/31/02).

For the quarter, total R&D spending by the top 10 pharmaceutical companies rose faster than sales, up 10.5% compared to a 6.8% increase in sales year over year. However, two companies, Wyeth and Bristol-Myers Squibb showed a drop in sales. Total sales for the top 10 pharmaceutical companies were $59.5 billion for the third quarter.

As for R&D as a percentage of sales, spending levels were nearly the same year over year for the third quarter. For the top 10 pharmaceutical companies, R&D as a percentage of sales rose only 0.4% for the third quarter. The only company to show an increase above 2% was Bristol-Myers Squibb at 2.5%, and only three companies, AstraZeneca, Wyeth and Pharmacia, showed an increase of over 1%.

Thus, it appears that there is an upward trend in R&D spending for the second half of the year. But changes are ongoing. GlaxoSmithKline noted that R&D spending will increase in the fourth quarter. However, the head of development at its pharmaceutical group left to join Bristol-Myers Squibb earlier this month. In its quarterly release, Novartis announced the implementation of a new research strategy.
Research & Development Expenses

 2002 2001 Growth
 Q3 Q3 from 2001

GlaxoSmithKilne $986 $922 6.9%
Novartis $717 $625 14.6%
Wyeth $518 $473 9.5%
Johnson & Johnson $952 $899 5.9%
Pharmacia $565 $507 11.4%
Bristol-Myers Squibb $542 $496 9.3%
AstraZeneca $757 $614 23.3%
Merck $677 $590 14.7%
Pfizer $1,263 $1,188 6.3%

TOTAL $6,977 $6,314 10.5%

 2002 2001 Growth
 Q3 Q3 from 2001

GlaxoSmithKilne $7,744 $7,191 7.7%
Novartis $5,364 $4,803 11.7%
Wyeth $3,623 $3,699 -2.1%
J&J $9,079 $8,058 12.7%
Pharmacia $3,579 $3,530 1.4%
Bristol-Myers Squibb $4,171 $4,743 -12.1%
AstraZeneca $4,350 $3,950 10.1%
Merck $12,893 $11,920 8.2%
Prizer $8,725 $7,824 11.5%

TOTAL $59,628 $55,718 6.8%
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Title Annotation:pharmaceutical companies
Publication:Instrument Business Outlook
Geographic Code:1USA
Date:Oct 31, 2002
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