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Top 25 pharma and biopharma report.

01 Pfizer

02 Novartis

03 Merck & Co.

04 Roche

05 GlaxoSmithKline

06 Sanofi

07 Johnson & Johnson

08 Gilead

09 AbbVie

10 AstraZeneca

11 Amgen

12 Teva

13 Eli Lilly & Co.

14 Bristol-Myers Squibb

15 Bayer

16 Boehringer Ingelheim

17 Novo Nordisk

18 Merck KGaA

19 Takeda

20 Allergan

21 Biogen

22 Shire

23 Celgene

24 Mylan

25 Otsuka
TOP 25 PHARMA AND BI0PHARMA COMPANIES
(Based on 2016 Pharma/Biopharma Sales, in $U.S. Millions)

01. Pfizer                  $52,824
02. Novartis                $48,518
03. Merck & Co.             $39,807
04. Roche                   $38,369
05. GlaxoSmithKline         $37,929
06. Sanofi                  $35,633
07. Johnson & Johnson       $33,464
08. Gilead                  $30,390
09. AbbVie                  $25,638
10. AstraZeneca             $23,002
11. Amgen                   $22,991
12. Teva                    $21,903
13. Eli Lilly & Co.         $21,222
14. Bristol-Myers Squibb    $19,427
15. Bayer                   $17,300
16. Boehringer Ingelheim    $16,699
17. Novo Nordisk            $15,841
18. Merck KGaA              $15,828
19. Takeda                  $15,565
20. Allergan                $14,570
21. Biogen                  $11,449
22. Shire                   $11,397
23. Celgene                 $11,229
24. Mylan                   $11,077
25. Otsuka                  $10,240


01 PFIZER, INC.

Headquarters: New York, NY

twitter.com@pfizer_news

www.pfizer.com
HEADCOUNT:           64,000
YEAR ESTABLISHED:      1849
REVENUES:           $52,824    (+8%)
NET INCOME:          $7,215    (+4%)
R&D:                 $7,872    (+2%)

DRUGS APPROVED

DRUG                    INDICATION

Bavencio                urothelial carcinoma
Eucrisa                 mild to moderate atopic dermatitis
Nimenrix                meningococcal group A, C, W-135, and Y
Xalkori                 ROS1-positive advanced non-small cell
                        lung cancer
Prevnar 13              pneumococcal pneumonia, adults 18
                        through 49 years

DRUGS PENDING

DRUG                    INDICATION

Trumenba                adolescent and young adult meningitis B
tafamidis meglumine     transthyretin familial amyloid polyneuropathy
Bavencio                2nd line metastatic merkel cell carcinoma
inotuzumab              acute lymphoblastic leukemia
ozogamicin
ertugliflozin           diabetes mellitus-type 2

PHASE IIB AND BEYOND

DRUG                    INDICATION

Bavencio (avelumab)     non-small cell lung cancer, gastric cancer,
                        ovarian cancer, kidney cancer, head and
                        neck cancer
Ertugliflozin           type 2 diabetes
Ibrance (palbociclib)   high risk early breast cancer
lorlatinib              non-small cell lung cancer
Prophylactic Vaccine    clostridium difficile colitis
Rivipansel              vaso-occlusive crisis associated with
                        sickle cell disease
somatrogon              adult growth hormone deficiency
talazoparib             breast cancer
Tanezumab               OA signs and symptoms, chronic low
                        back pain, cancer pain
Trumenba                meningococcal serogroup B
Vyndaqel                cardiomyopathy
Xeljanz                 ulcerative colitis, psoriatic arthritis
Xtandi                  breast cancer, prostate cancer
Coagulation Factor IX   hemophilia
Dekavil                 rheumatoid arthritis
Dopamine 1              Parkinson's disease
glasdegib               acute myeloid leukemia
JAK3 Inhibitor          alopecia areata, rheumatoid arthritis, ulcer-
                        ative colitis
Myostatin Inhibitor     Duchenne muscular dystrophy
Prophylactic Vaccine    staphylococcus aureus

EARLY RESEARCH PROJECTS

DRUG                    INDICATION

PF-06342674             diabetes mellitus-type 1
PF-06423264             acne
PF-06817024             atopic dermatitis
PF-06823859             lupus
PF-05221304             non-alcoholic steatohepatitis
PF-06282999             acute coronary syndrome
PF-06293620             diabetes mellitus-type 2
PF-06427878             hyperlipidemia
PF-04958242             schizophrenia
PF-05251749             Alzheimer's disease
PF-06669571             cognitive disorder
PF-06818883             intracerebral hemorrhage
PF-04136309             pancreatic cancer
PF-06647020             cancer
PF-06747143             acute myeloid leukemia
PF-06482077             bacterial infections

DRUGS COMING OFF PATENT

DRUG                    INDICATION             YEAR

Viagra                  erectile dysfunction   2017
Lyrica                  epilepsy, neuropathy   2018

TOP SELLING DRUGS

DRUG              INDICATION             2016 SALES   (+/-%)

Prevnar family    pneumoccal vaccine       $5,718      -8%
Lyrica            epilepsy, neuropathy     $4,165      14%
Enbrel            rheumatoid arthritis     $2,909      -13%
Ibrance           cancer                   $2,135      n/a
Lipitor           cholesterol              $1,758      -6%
Viagra            erectile dysfunction     $1,181      -9%
Sutent            cancer                   $1,095      -2%
Premarin          menopause                $1,017      flat
Norvasc           hypertention             $962        -3%
Celebrex          pain                     $733        -12%


Headquartered in New York City, Pfizer jumped past Novartis to reclaim its spot as the largest pharmaceutical company in the world by revenue. The company reported an 8% growth to $52.8 billion for 2016 as compared to $48.9 billion in 2015. Pfizer's portfolio includes medicines, vaccines, and consumer healthcare products separated into two businesses: Innovative Health and Essential Health.

The Innovative Health segment includes the global innovative pharmaceuticals segment and the global vaccines, oncology, and consumer healthcare segment and accounts for more than half of the company's total revenues. The revenue contribution from the segment rose to 55% of total revenues for 2016. The Innovative Health revenues increased 11% to $29.2 billion in 2016 primarily due to an increase in sales of Lyrica, Ibrance, Eliquis, Xeljanz, Xtandi, and the strong performance of new products.

Pfizer Essential Health, formerly known as the Global Established Pharma segment, is focused on non-viral anti-infectives, biosimilars and sterile injectable medicines. The Essential Health business also includes legacy Hospira products. In September 2015, Pfizer acquired Hospira to create a leading provider of global sterile injectables that now encompasses one of the broadest and most diverse portfolios of sterile injectable medicines in the industry. The Essential Health segment revenue's rose 11% to $23.6 billion in 2016, driven by increased sales of legacy Hospira products.

REGULATORY MILESTONES

Many of Pfizer's R&D pipeline's new molecular entities are aimed at a range of cancers, including kidney, breast, prostate, lung and blood cancers, and include biologics, chemicals, immunotherapies, gene therapies and biosimilars.

In 2016, Pfizer achieved several regulatory milestones. Its breakthrough oncology product Ibrance, which was approved by the FDA in the U.S. in 2015 for the initial treatment of the most common form of advanced breast cancer, received a new U.S. indication for recurrent disease. Ibrance also was approved in 2016 by the European Medicines Agency (EMA) for both initial and recurrent disease. There are 77 ongoing or completed collaborative Ibrance studies with investigators, 43 of which are in breast cancer and 34 in non-breast tumors including pancreatic and head and neck cancers.

Xalkori, Pfizer's treatment for non-small cell lung cancer, was approved by the FDA for a certain type of lung cancer known as ROS-1.

Two therapies in development for cancer were accepted for regulatory review in 2016. Inotuzumab for acute lymphoblastic leukemia is now in registration in the EU, and avelumab for metastatic Merkel cell carcinoma is being reviewed in the U.S. and EU.

Together with its partner Merck KGaA, Pfizer is expanding its foothold in immuno-oncology where it currently has 30 avelumab clinical programs in the clinic and in 2016, launched four "first-in-patient" studies and now has eleven immunooncology entries in the clinic. Pfizer is now well positioned to capitalize on what many believe will be the future of cancer treatment--immuno-oncology agents combined with more conventional therapies.

DRIVING PROGRESS IN THE BIOSIMILARS MARKET

As the leading global biosimilars company, Pfizer currently has three marketed biosimilars as part of its acquisition of Hospira--Inflectra (infliximab-dyyb), Retacrit (epoetin zeta) and Nivestim (filgrastim)--available to patients in several markets. Inflectra, which is marketed under other brand names in some countries, is approved in more than 70 countries. Pfizer's robust biosimilars pipeline consists of eight distinct molecules in mid-to-late stage development, and six in early-stage development. Three of its late-stage pipeline products have reported positive top-line data from Phase III studies, and full data results are anticipated in 2017-2018.

Over the past year, the company has also worked to advance the U.S. biosimilars marketplace. In 2016, Pfizer launched Inflectra, a biosimilar for Remicade in the U.S. It marks the first monoclonal antibody (mAb) biosimilar to be both approved and launched in the U.S. It received FDA clearance in November 2016 and will treat difficult conditions including rheumatoid arthritis (RA), Crohn's disease, plaque psoriasis and ulcerative colitis (UC).

Pfizer's 14 biosimilars in the pipeline are expected to compete in a global market that may grow to $17-20 billion over the next five to 10 years. To offer support to patients and providers in the U.S., Pfizer launched the Pfizer enCompass Program, a comprehensive reimbursement and patient support program for biosimilars.

Pfizer is also developing new therapies for improving the quality of life of people who live with debilitating conditions such as RA, lupus, psoriatic arthritis and inflammatory bowel disease (IBD), including UC. It's expertise in Janus kinase inhibitors (JAK), which interfere with the inflammation process in autoimmune diseases, is enabling it to advance several other potential anti-inflammatory therapies beyond the marketed product Xeljanz. Pfizer anticipates initiating approximately six JAK studies in 2017.

In addition, Pfizer has a rich history in vaccine research and development, and in 2016 continued to improve and expand its portfolio of potentially life-saving vaccines. The European Commission approved an expanded indication for its Nimenrix vaccine making it the first and only conjugate vaccine in the EU for immunizing infants six weeks of age and older against invasive meningococcal disease caused by a certain group of bacteria. In addition, Pfizer's Meningococcal Group B (MenB) vaccine, Trumenba, was approved by the FDA for a new two-dose schedule designed to help prevent MenB in healthy adolescents and young adults. Pfizer also continued to advance its Staphylococcus aureus (S. aureus) and Clostridium difficile (C. difficile) vaccine candidates, designed to prevent widespread and increasingly drug-resistant infections.

COLLABORATIONS AND ACQUISITIONS

Collaboration is an important element of Pfizer's overall discovery and early development process. In 2016, it received breakthrough therapy designation from the FDA for a hemophilia gene therapy being developed in partnership with SPARK Therapeutics. It also acquired Bamboo Therapeutics, a privately held biotech based in Chapel Hill, NC, focused on developing gene therapies for the potential treatment of patients with certain rare diseases including Duchenne muscular dystrophy (DMD) and Friedreich's ataxia (FA). Through this acquisition Pfizer acquired a number of novel assets, key technology and manufacturing capabilities that position it to be ahead of the curve in this developing area of research that the company says has the potential to be game-changing.

In December 2016, Pfizer completed the acquisition of Astra-Zeneca PLC's small molecule anti-infective business, primarily outside the U.S., including the commercialization rights and development rights in certain markets to the newly approved EU drug Zavicefta (ceftazidime-avibactam), the marketed agents Merrem/Meronem (meropenem) and Zinforo (ceftaroline fosamil), and the clinical development assets aztreonam-avibactam (ATM-AVI) and ceftaroline-avibactam (CXL). Zavicefta specifically addresses certain multi-drug resistant Gram-negative infections, including those resistant to carbapenem antibiotics, one of the largest threats to global health in the field of infectious disease.

Pfizer also advanced its collaboration with Merck & Co. on ertugliflozin, which is in a new class of treatments for type 2-diabetes, the world's most prevalent type, and expects regulatory action in 2017. Through a partnership with Eli Lilly & Co., Pfizer has initiated six new Phase III trials to continue the development of tanezumab, a novel potential treatment option for chronic, debilitating pain in patients with osteoarthritis, lower back pain and cancer.

Pfizer also entered into several research collaborations and business relationships. They include collaborations with Biolnvent International AB to develop antibodies targeting tumor-associated myeloid cells and Western Oncolytics to advance their novel oncolytic vaccinia virus, WO-12, adding another novel technology platform to its cancer vaccine efforts, as well as a relationship with IBM where it will utilize IBM Watson for Drug Discovery to help accelerate research in immuno-oncology by identifying potential new targets and combination therapies.

Domain Therapeutics, a biopharma company specializing in new drug candidates that target G protein-coupled receptors (GPCRs), entered a collaboration agreement with Pfizer to assess the impact of mutations on different signaling pathways engaged by GPCRs. Domain will use its bioSensAll technology to define signaling signatures for each of the wild-type and mutant receptors. The bioSensAll technology allows for easier understanding of signaling pathways activated by each candidate molecule, predicting its pharmacological profile. This makes it possible to choose at an early stage molecules that have the required activity but do not present side effects or induce tolerance to treatment. The collaboration aims to validate potential targets across a range of therapeutic indications.

Pfizer also entered a new therapeutic antibody discovery collaboration with AbCellera Biologies to apply its mAb screening platform to discover function-modulating antibodies against undisclosed membrane protein targets. AbCellera's platform allows it to screen natural immune repertoires with unparalleled depth to unlock challenging discovery programs.

Lastly, Pfizer gained an eczema asset when it paid $5.2 billion for Anacor Pharmaceuticals. The company's lead asset, crisaborole, is a non-steroidal topical PDE4 inhibitor with antiinflammatory properties for the treatment of mild-to-moderate atopic dermatitis, or eczema. In two Phase III studies, crisaborole achieved statistically significant results on all primary and secondary endpoints. Pfizer received FDA approval at the end of the year and said it believes peak sales for crisaborole could potentially reach $2.0 billion annually.

PFIZER BREAKS GROUND ON NEW BIOLOGICS FACILITY

Clinical manufacturing facility will support Pfizer's diverse biologics research efforts

During the year, Pfizer broke ground on its new biologics clinical manufacturing facility in Andover, MA, and will invest more than $200 million to enable the production of complex biologics and vaccines. The new five-story building is expected to be operational by January 2019.

The Andover campus currently includes seven buildings, which house laboratories, clinical and commercial manufacturing suites, and support areas. It also includes a multiproduct manufacturing facility, which allows clinical and commercial products to be manufactured simultaneously.

The new clinical manufacturing facility is designed with five independent manufacturing suites to support Pfizer's complex and diverse biologics research efforts. The facility will employ flexible design to enable next generation manufacturing strategies and will leverage single-use bioreactors and disposable process technologies.

02 NOVARTIS

Headquarters: Basel, Switzerland

twitter.com/novartis

www.novartis.com
HEADCOUNT:          118,000
YEAR ESTABLISHED:      1996
REVENUES:           $48,518    (-2%)
PHARMA REVENUES:    $32,562    (-2%)
NET INCOME:         $11,314    (-6%)
R&D:                 $9,039    (+1%)

DRUGS APPROVED

DRUG                   INDICATION

Lucentis               choroidal neovascularization in rare diseases
Arzerra                chronic lymphocytic leukemia
Maris                  periodic fever syndromes
Kisqali Femara         HR+/HER2- postmenopausal advanced
  Co-Pack              breast cancer
Rydapt                 acute myeloid leukemia
Zykadia                ALK+ advanced NSCLC
Ribociclib             1st line HR+/HER2- advanced breast
                       cancer

DRUGS PENDING

DRUG                   INDICATION

AfinitorA/otubia       TSC seizures
Revolade               aplastic anemia
Signifor LAR           Cushing's disease
Tafinlar + Mekinist    BRAF V600+ non-small cell lung cancer
Tasigna                CML treatment-free remission

PHASE IIB AND BEYOND

DRUG                   INDICATION

ACZ885                 secondary prevention of cardiovascular
(canakinumab)          events
ACZ885 (canakinumab)   migraine
Arzerra                non-Hodgkin's lymphoma
BAF312                 secondary progressive multiple sclerosis
BYL719 + fulvestrant   HR+/HER2- postmenopausal aBC 2nd line
CAD106                 Alzheimer's disease
Cosentyx               non-radiographic axial spondyloarthritis
Entresto               chronic heart failure with preserved ejection
                       fraction, post-acute myocardial infarction
FTY720 (fingolimod)    pediatric multiple sclerosis
Jakavi                 graft-versus-host disease, early myelofibrosis
LAM320                 multi-drug resistant tuberculosis
LCI699                 Cushing's disease
Lucentis               retinopathy of prematurity
0MB157 (otatumumab)    relapsing multiple sclerosis
PKC412                 acute myeloid leukemia
Promacta / Revolade    severe aplastic anemia
QAW039                 asthma
RTH258                 nAMD, diabetic macular edema
RLX030 (serelaxin)     acute heart failure
SEG101                 sickle cell disease

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

ABL001                 chronic myeloid leukemia
PIM447                 hematologic tumors
GP2018                 autoimmune diseases

DRUGS COMING OFF PATENT

DRUG                   INDICATION                      YEAR

Gleevec                oncology                        2018
Gilenya                autoimmune disease              2017
Exjade                 iron chelation                  2017
Starlix                blood glucose lowering agent    2017
Lotrel                 cardiovascular disorders        2017
Exforge                hypertension                    2017

TOP SELLING DRUGS

DRUG              INDICATION                  2016 SALES   (+/-%)

Gleevec/Glivec    oncology                      $3,323      -29%
Gilenya           autoimmune disease            $3,109      12%
Lucentis          age-related macular           $1,835      -11%
                  degeneration
Tasigna           chronic myeloid leukemia      $1,739       7%
Sandostatin       acromegaly                    $1,646       1%
Afinitor          oncology                      $1,516      -6%
Cosentyx          Psoriasis, ankylosing         $1,128       nm
                  spondylitis and psoriatic
                  arthritis
Galvus            diabetes                      $1,193       5%
Diovan            hypertension                  $1,073      -16%
Exjade            chronic iron overload          $956        4%


Novartis slipped to number two with flat revenues in 2016 compared to 2015. However, at $48.5 billion the Basel, Switzerland-based drug maker is still a Big Pharma giant.

The major drivers behind the company's falling revenues have included adjustments for changes to its businesses, including its acquisition of GlaxoSmithKline's (GSK) Oncology business and its divestiture of its Vaccines and Consumer Healthcare divisions to GSK in March 2015.

Novartis started divesting its business segments in 2014. Its Animal Health business was divested to Eli Lilly, while it divested parts of its Vaccines business and its Consumer Healthcare business to GSK. It also divested its Influenza Vaccines business to CSL Group. It acquired GSK's oncology business in March 2015.

To reflect these changes and the importance of oncology to the company following the integration of the oncology assets acquired from GSK, during the year Novartis restructured its Pharmaceuticals Division by creating two business units--Novartis Pharmaceuticals and Novartis Oncology. Both units form the Innovative Medicines Division and consists of products for therapeutic areas including oncology, cardio-metabolic, immunology and dermatology, retinal, respiratory, neuroscience, and established medicines. The Innovative Medicines segment reported a fall of 2% to $32.6 billion in 2016, representing 67% of total company revenue.

Sandoz is Novartis' generics and biosimilars division, which includes the retail generics, anti-infectives and biopharmaceuticals franchises. It is the number two generic medicines provider worldwide, and it's number one in differentiated generics, including products that are difficult to develop and manufacture. In 2016, Sandoz contributed nearly 30% of total revenue at $10.14 billion, marking a 2% increase over the previous year. Alcon, the company's eye care unit, makes up the remaining $5.76 billion of 2016 revenue.

UPPING BIOSIMILAR STAKES

Sandoz's revenue drivers are biopharmaceuticals, including biosimilars and Glatopa. The segment's growth was reported across all regions worldwide. In U.S. markets, its reported revenue for 2016 was $3.7 billion, a 1% rise. European markets reported a 7% rise in revenue to $4.4 billion, driven by strong sales in the region. Canadian and Latin American markets reported a rise of 9% during the year.

The global sales of biopharmaceuticals rose 31% to $1 billion in 2016. These sales included revenue from biosimilars, biopharmaceutical contract manufacturing, and Glatopa. The growth came mainly from the three in-market biosimilars--Omnitrope (somatropin), Binocrit (epoetin alfa), and Zarzio/Zarxio (filgrastim)--along with the strong performance of Glatopa in U.S. markets.

Glatopa (glatiramer acetate) injection is the first generic version of Teva Pharmaceutical's Copaxone 20mg used for the treatment of relapsing forms of multiple sclerosis. The segment's anti-infective franchise reported a fall of 2% in revenue at a constant exchange rate at $1.4 billion in 2016.

Also on the biosimilar front, Sandoz during the year acquired from Pfizer the rights for the development and commercialization of PF-06438179 (biosimilar infliximab) in the 28 countries that form the European Economic Area (EEA). Infliximab is a tumor necrosis factor alpha (TNF-alpha) inhibitor used to treat a range of autoimmune diseases including rheumatoid arthritis (RA) and psoriasis.

Sandoz also advanced its biosimilars program with EMA acceptance of regulatory submission for its biosimilar to Amgen's EU-licensed Neulasta (pegfilgrastim)--a long-acting recombinant human granulocyte colony-stimulating factor (G-CSF). Sandoz is seeking approval for the same indication as the reference product.

CLINICAL COLLABORATIONS

Novartis and Bristol-Myers Squibb (BMS) entered into a clinical research collaboration to investigate the safety, tolerability, and efficacy of Mekinist (trametinib) in combination with Opdivo (nivolumab) and Opdivo + Yervoy (ipilimumab) regimen as a potential treatment option for metastatic colorectal cancer. BMS will conduct the study, which is expected to establish recommended dose regimens and the preliminary anti-tumor activity of the combination therapies. Both companies will evaluate the results to determine optimal approaches and potential clinical development of these combinations.

Allergan entered into a clinical trial agreement with Novartis to conduct a Phase lib study, using Allergan's cenicriviroc (CVC) and Novartis'lead FXR agonist for the treatment of non-alcoholic steatohepatitis (NASH). The study will assess the safety, efficacy and tolerability of this multi-therapy treatment approach for NASH. CVC is a once-daily, oral, Phase III ready potent immunomodulator that blocks two chemokine receptors, CCR2 and CCR5, which are involved in inflammatory and fibrogenic pathways.

Novartis is developing Farnesoid X receptor (FXR) agonists for the treatment of chronic liver diseases, including NASH. The most advanced investigational compound is a potent, non-bile acid FXR agonist, which recently received Fast Track designation from the FDA and is in a Phase II clinical trial. As part of this agreement, Novartis and Allergan will conduct a Phase lib clinical trial to assess the safety, efficacy and tolerability of a multitherapy treatment for NASH.

Novartis also entered a $225 million cardiovascular deal with Ionis Pharmaceuticals to develop and commercialize AKCEAAPO(a)-L Rx and AKCEA-APOCIII-L Rx, novel potential therapies to treat cardiovascular disease. The partnership allows the companies to move more rapidly to Phase III cardiovascular outcomes studies. Ionis and its subsidiary Akcea plan to conduct a Phase II dose-ranging study for each drug, to choose the optimal dose and evaluate alternative dose schedules, such as monthly dosing, for the Phase III study. Following the successful completion of each Phase II dose-ranging study, and prior to initiation of the Phase III study, Novartis will be able to exercise its option to license and commercialize each drug.

BOLSTERING THE IMMUNO-ONCOLOGY PIPELINE

At the start of 2015 Novartis launched a new immuno-oncology research team led by cancer vaccine pioneer Glenn Dranoff. In a short period of time, the team built a broad portfolio of clinical and pre-clinical programs focused on stimulating the body's immune system to combat cancers through targeting critical regulatory steps in the anti-tumor immune response.

Today the company's immuno-oncology portfolio includes novel checkpoint inhibitors, chimeric antigen receptor T-cell (CART) technology, myeloid cell targeting agents, the T-cell stimulating factor IL-15, STING agonists that enhance immune recognition of cancers, and adenosine receptor antagonists and TGF-beta blocking antibodies that overcome immunosuppression in the tumor microenvironment.

During the year, Novartis made a series of acquisitions and strategic collaborations between itself and biotech companies that have helped bolster its immuno-oncology pipeline. It continued to grow the pipeline through a collaboration and licensing agreement with Surface Oncology that gave Novartis access to four preclinical programs that target regulatoryT cell populations, inhibitory cytokines, and immunosuppressive metabolites in the tumor microenvironment.

Novartis also added bispecific antibodies to its immuno-oncology portfolio through a collaboration and licensing agreement with Xencor. Traditional monoclonal antibodies target and bind to a single antigen. Bispecific antibodies are engineered to recognize and target two different antigens, which makes them potentially more effective in targeting complex diseases. A T-cell engaging bispecific antibody is able to bind an antigen on a tumor cell with one arm and engage T-cells capable of their destruction with the other.

Novartis has the right to develop four additional bispecific antibodies and to use other Xencor proprietary antibody engineering technology for up to ten additional biotherapeutic programs across the Novartis R&D portfolio. In addition, the companies will collaborate to co-develop Xencor's two bispecific T-cell engaging antibodies targeting CD3xCD123 and CD3xCD20 for the treatment of acute myeloid leukemia and B-cell malignancies.

Novartis also signed an exclusive option, collaboration and license agreement with Conatus Pharmaceuticals, a biotech focused on the development of novel medicines to treat liver disease. This agreement enables Novartis and Conatus to jointly develop emricasan, an investigational, first-in-class, oral, pancaspase inhibitor for the treatment of NASH with advanced fibrosis (scarring) and cirrhosis. This collaboration has the potential to expand treatment options for people in various stages of fatty liver disease, where no approved medicines currently exist.

REGULATORY APPROVALS

In terms of new drug approvals, two of Novartis' drugs for which regulatory decisions are expected soon include LEE011, an investigational drug in combination with letrozole for the treatment of HR+/HER2- advanced breast cancer, and PKC412, an investigational drug for the treatment of acute myeloid leukemia. Both drugs have been granted priority review designations by the FDA. Other regulatory decisions are expected for biosimilars.

Novartis is also going to submit new drug applications for CTL019, an investigational drug for the treatment of acute lymphoblastic leukemia in children, and AMG334, an investigational drug for the treatment of migraines, developed in partnership with Amgen.

During the year Novartis' Cosentyx (secukinumab) was approved by the FDA for two new indications, active ankylosing spondylitis (AS) and active psoriatic arthritis (PsA). Both are life-long, painful and debilitating inflammatory diseases that affect the joints and/or spine. Cosentyx is now the first and only interleukin-17A (IL-17A) antagonist approved for AS, as well as moderate to severe plaque psoriasis and PsA, which impacts as many as 30% of patients with psoriasis.

NOVARTIS BUYS BLOOD DISEASE DRUG MAKER FOR $665M

Purchase of Selexys complements and broadens hematology pipeline

Novartis acquired Selexys Pharmaceuticals, a drug maker specializing in development of therapeutics in certain hematologic and inflammatory disorders. Novartis exercised its right to acquire Selexys following receipt of results of the SUSTAIN study, a Phase II trial evaluating the use of SelG1, an anti-P-selectin antibody, in the reduction of vaso-occlusive pain crises in patients with sickle cell disease (SCD).

Novartis obtained the exclusive right to acquire Selexys and SelG1 in 2012, Prior to the acquisition, Selexys Pharmaceutical Corporation was a privately held biopharmaceutical company headquartered in Oklahoma City, Oklahoma. Terms of the deal could total up to $665 million in upfront, acquisition and milestone payments.

"Sickle cell disease affects millions of people around the world and there are limited therapies available for treatment of vaso-occlusive pain crises, a very common complication of the disease," said Bruno Strigini, chief executive officer, Novartis Oncology. "With this acquisition, Novartis is able to leverage its leadership in hematology research to advance development of a potential new treatment option for patients living with this debilitating condition."

"We would like to extend our gratitude to all of the dedicated patients, physicians and nurses who participated in the SUSTAIN study of SelG1 in sickle cell disease," said Dr. Scott Rollins, former president and chief executive officer, Selexys Pharmaceuticals. "Further, the acquisition of Selexys by Novartis represents an important step in the continued development of SelG1, a novel, potential first-in-class therapy for patients with this underserved life-threatening disease."

TOP 25 COMPANIES

03 MERCK

Headquarters: Whitehouse Station, NJ

twitter.com/Merck

www.merck.com
HEADCOUNT:           68,000
YEAR ESTABLISHED:      1889
REVENUES:           $39,807     (+1%)
PHARMA REVENUES:    $35,151     (+1%)
NET INCOME:          $5,712    (+28%)
R&D:                 $7,194     (+7%)

DRUGS APPROVED

DRUG                   INDICATION

Keytruda               Mismatch Repair Deficient Cancer,
                       bladder cancer, classical Hodgkin lymphoma,
                       non-small cell lung cancer, head and neck
                       cancer
Zinplava               Clostridium difficile infection

DRUGS PENDING

DRUG                   INDICATION

MK-8237                Allergy, House Dust Mite
MK-8835B               Diabetes Mellitus
MK-1293                Diabetes Mellitus
V419                   Pediatric Hexavalent Combination Vaccine

PHASE IIB AND BEYOND

DRUG                   INDICATION

verubecestat           Alzheimer's disease
anacetrapib            atherosclerosis
Relebactam             bacterial infection
Keytruda               breast cancer, Esophageal cancer, Hodg-
                       kin Lymphoma, liver cancer, colorectal
                       cancer
letermovir             CMV prophylaxis in transplant patients
V920                   ebola vaccine
Sivextro               bacterial pneumonia
vericiguat             heart failure
doravirine             HIV
MK-1029                asthma
MK-1029                cancer
MK-7264                cough, including cough with Idiopathic
                       Pulmonary Fibrosis
MK-5172                hepatitis C
V114                   pneumoconjugate vaccine

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

Pembrolizumab          breast cancer
M7824                  solid tumors
MK5160                 type 1 diabetes mellitus
MK3475                 multiple myeloma
MK8591                 HIV

DRUGS COMING OFF PATENT

DRUG                   INDICATION             YEAR

RotaTeq                rotavirus              2019
Noxafil                antifungal             2019
Emend for injection    chemotherapy induced   2019
                       nausea and vomiting

TOP SELLING DRUGS

DRUG                INDICATION             2016 SALES   (+/-%)

Januvia/Janumet     diabetes, obesity        $6,109      2%
ZetiaA/ytorin       cholesterol              $3,701      -2%
Gardasil            HPV vaccine              $2,173      14%
Remicade            rheumatoid arthritis     $1,268      -29%
Keytruda            cancer                   $1,402      148%
Isentress           HIV/AIDS                 $1,387      -8%
Proquad, MMR,       vaccines                 $1,640      9%
and Varivax
Cubicin             antibiotic               $1,087      -4%
Singular            asthma                   $915        -2%
Pneumovax 23        vaccines                 $641        18%


03 MERCK

Headquartered in Whitehouse Station, NJ, Merck climbed a spot to number three with 2016 revenue of $39.8 billion. The company operates in over 100 countries, and 55% of its total revenue comes from sales outside U.S. markets. The global human health segment, or pharmaceuticals, is the highest revenue-generating segment at the company and contributed nearly 88% of total revenues. This segment includes various franchises like oncology, vaccines, hospital acute care, diabetes, and women's health.

BLOCKBUSTERS LEAD THE WAY

Merck's pharmaceuticals segment has several blockbuster drugs with a yearly contribution of over $1 billion each. Keytruda is part of Merck's immuno-oncology franchise and used to treat non-small cell lung cancer as well as melanoma, a type of skin cancer. Merck launched Keytruda in the fourth quarter of 2014. Last year it Keytruda's global sales were $1.4 billion, a nearly 150% growth in revenues as compared to $566 million in 2015.

Januvia and Janumet are two of Merck's blockbuster drugs in the diabetes franchise. These drugs are used to lower blood sugar levels in patients with type two diabetes and combined sales for these drugs were $6 billion.

Remicade, a top-selling drug for the treatment of inflammatory disorders, is losing its market share due to the entry of generic competitors and biosimilars following the loss of exclusivity in European markets. Revenues fell 29% to $1.3 billion.

Simponi is another drug in the immunology franchise that saw revenues rise 11% to $766 million while the combined revenues of cardiovascular drugs Zetia and Vytorin fell to $3.7 billion due to the loss of exclusivity of Vytorin in the U.S.

The Gardasil franchise is Merck's leading vaccines franchise for the prevention of certain strains of human papillomavirus (HPV). Total sales of the Gardasil franchise in 2016 were $2.2 billion, an increase of 14%.

CANCER COLLABORATIONS

Merck entered a $280 million cancer collaboration with Complix, a biopharmaceutical company developing a pipeline of protein therapeutics called alphabodies for the treatment of cancer and severe autoimmune diseases. The strategic drug discovery collaboration through Merck's subsidiary, Merck Sharp & Dohme Corp. (MSD), will focus on developing cell-penetrating alphabodies (CPABs) for the treatment of cancer. Complix will use its proprietary Alphabody platform to deliver CPABs against up to two intracellular cancer targets. MSD will fund related research activities and has an option to the exclusive, worldwide rights for any of the resulting compounds.

Adimab entered into an agreement with Merck to transfer its antibody technology to Merck Research Labs for the discovery and optimization of monoclonal and bispecific therapeutic antibody candidates. This technology transfer expands an ongoing collaboration initiated in 2009 that has resulted in several undisclosed therapeutic candidates for Merck. Adimab will transfer and license its antibody discovery and optimization platform to Merck. Merck will receive a custom human antibody library and will obtain a license to the Adimab platform for use in all therapeutic areas and targets. Merck has also secured an option to receive continued improvements to the Adimab platform, including access to new antibody libraries.

AbCellera has entered a collaboration with Merck to generate antibodies against an undisclosed disease target. AbCellera will apply its high-throughput antibody discovery platform to identify antibodies that specifically modulate target function. Merck has the option to develop antibody candidates identified through the collaboration for specified therapeutic applications.

In another cancer pact, ImmunoGen and Merck joined forces to evaluate an ovarian cancer drug combo. The clinical research collaboration was set up to assess ImmunoGen's mirvetuximab soravtansine in combination with Merck's anti-PD-1 therapy, Keytruda (pembrolizumab), for the treatment of patients with FRa-positive ovarian cancer. ImmunoGen is conducting a Phase Ib/II trial evaluating mirvetuximab soravtansine for FR[alpha]-positive ovarian cancer used in combination with other anticancer agents. The assessment of mirvetuximab soravtansine with Keytruda will be added to this trial, with Merck supplying the Keytruda. The agreement may be expanded to include a subsequent Phase III clinical trial.

Merck and Moderna Therapeutics formed a $200 million strategic collaboration and license agreement to develop and commercialize novel messenger RNA (mRNA)-based personalized cancer vaccines. The collaboration will combine Merck's established leadership in immuno-oncology with Moderna's pioneering mRNA vaccine technology and GMP manufacturing capabilities to advance individually tailored cancer vaccines for patients across a spectrum of cancers.

Moderna and Merck will develop personalized cancer vaccines that utilize Moderna's mRNA vaccine technology to encode a patient's specific neoantigens, unique mutations present in that specific patient's tumor. When injected into a patient, the vaccine will be designed to elicit a specific immune response that will recognize and destroy cancer cells. The companies believe that the mRNA-based personalized cancer vaccines' ability to specifically activate an individual patient's immune system has the potential to be synergistic with checkpoint inhibitor therapies, including Merck's anti-PD-1 therapy, Keytruda (pembrolizumab). In addition, Moderna has developed a rapid cycle time, small-batch manufacturing technique that will uniquely allow the company to supply vaccines tailored to individual patients within weeks.

The development program will entail multiple studies in several types of cancer and include the evaluation of mRNA-based personalized cancer vaccines in combination with Merck's Keytruda (pembrolizumab). Moderna will also utilize the upfront payment to fund a portion of the build-out of a GMP manufacturing facility in suburban Boston for the purpose of personalized cancer vaccine manufacturing.

KEY ACQUISITIONS

In June 2016 Merck bought the clinical-stage biotech Afferent Pharmaceuticals in a deal worth up to $1.25 billion. The move gave Merck access to Afferent's lead investigational candidate AF-219 for chronic cough treatment. Merck purchased all outstanding shares of Afferent for an upfront fee of $500 million, and could pay an extra $750 million linked to certain clinical development and commercial milestones.

AF-219 is a selective, non-narcotic, orally-administered P2X3 antagonist currently being evaluated in a Phase lib clinical trial for the treatment of refractory, chronic cough, as well as in a Phase II clinical trial in idiopathic pulmonary fibrosis (IPF) with cough.

P2X3 receptors are believed to play a key role in the sensitization of certain sensory nerves, which become activated under pathological conditions mediated by a common cellular signal, ATP, when it is released in high concentrations due to cellular distress following injury or infection. Afferent's compounds are designed to selectively block ATP activation of P2X3 channels, potentially reducing a range of sensory signs and symptoms.

Merck also acquired IOmet Pharma, bolstering its preclinical immuno-oncology pipeline. The UK-based drug discovery company is focused on cancer immunotherapy and cancer metabolism. Merck gained its preclinical pipeline of IDO (indoleamine-2,3-dioxygenase 1), TDO (tryptophan-2,3-dioxygenase), and dual-acting IDO/TDO inhibitors. IOmet became a wholly owned subsidiary of Merck.

Also of note, in March 2016, after 20 years, Merck and Sanofi Pasteur ended their joint vaccines operations in Europe. After concluding their joint venture, both companies said the plan was to integrate their respective European vaccine businesses into their operations, independently manage their product portfolios and pursue separate growth strategies in Europe.

The joint venture Sanofi Pasteur MSD, owned on a 50/50 basis, was created in 1994 to develop and commercialize vaccines from both companies' pipelines in 19 European countries. Numerous vaccines from Sanofi and MSD's development pipelines were launched, addressing key unmet medical needs. While the joint venture was successful over the past two decades from a public health and commercial perspective, the companies said that after considering their individual strategic priorities, alongside the economic and regulatory environments for vaccine operations in the EU, it was best to manage their respective vaccine product portfolios independently.

MERCK, FUJIFILM PARTNER ON $60M MICROBIAL BIOLOGICS FACILITY

New 20,000-liter facility to be used by Fujifilm for its contract development and

During the year Merck formed a long-term collaboration with Fujifilm Diosynth Biotechnologies, a global biologics contract development and manufacturing organization (CDMO), to invest in and operate a new 20,000 liter large-scale microbialbiologics facility for supply of active pharmaceutical ingredient (API) to its customers.

This collaboration involves a $60 million investment by Merck at its Brinny manufacturing plant in Innishannon, County Cork, Ireland. Merck in Brinny has been in operation for more than 30 years and is an integrated site for the development, testing and manufacturing of biologics.

It is intended that the large-scale biologics operations at Merck in Brinny will be operational in early 2018 for biotech and pharma customers of Fujifilm Diosynth.

The deal addresses a market need for large-scale microbial biologics manufacturing and complements Fujifilm Diosynth's existing microbial capacity that ranges from 100L up to 5000L both in the U.S. and UK.

According to the company, microbial fermentation remains vital technology for the process of manufacturing biologics, and this investment, drawing on the latest production advances, will enable Fujifilm Diosynth's existing and future customers to have a clear and secure line-of-sight to higher product volumes along with lower cost-of-goods. The latter is particularly important as products enter late clinical phase and commercialization.

04 ROCHE

Headquarters: Basel, Switzerland

twitter.com/Roche

www.roche.com
HEADCOUNT:           94,052
YEAR ESTABLISHED:      1896
TOTAL REVENUES:     $49,626    (+5%)
PHARMA REVENUES:    $38,369    (+5%)
NET INCOME:          $9,550    (+8%)
R&D:                 $9,729    (+6%)

DRUGS APPROVED

DRUG                   INDICATION

Actemra/RoActemra      giant cell arteritis
Lucentis               diabetic retinopathy
Tecentriq              metastatic urothelial bladder cancer,
                       meta-static non-small cell lung cancer
Ocrevus                primary progressK/e forms of multiple
                       sclerosis
Alecensa               ALK-positive advanced non-small cell lung
                       cancer

DRUGS PENDING

DRUG                   INDICATION

Avastin                glioblastoma multiforme, relapsed ovarian
                       cancer, platinum-sensitive
Gazyva                 front-line indolent non-Hodgkin's lymphoma
atezolizumab           metastatic non-small cell lung cancer,
                       2nd/3rd-line
Alecensa               ALK-positive non-small cell lung cancer,
                       first-line treatment
Actemra                large-vessel vasculitis
ocrelizumab            relapsing multiple sclerosis

PHASE IIB AND BEYOND

DRUG                   INDICATION

RG1273 pertuzumab      advanced HER2-positive gastric cancer,
                       early HER2-positive breast cancer
RG7204 vemurafenib     adjuvant melanoma, BRAF mutation positive
RG7388 idasanutlin     acute myeloid leukemia
RG7421 cobimetinib     BRAFv600 mutation-positive advanced
+ atezolizumab +       melanoma, first-line treatment
vemurafenib
RG7446 atezolizumab    ovarian cancer, front-line treatment,
                       castration-resistant prostate cancer,
                       extensive-stage small-cell lung cancer,
                       first-line treatment, metastatic
                       triple-negative breast cancer
RG7446 + chemo +/-     first-line non-squamous non-small cell lung
Avastin atezolizumab   cancer
RG7446+                renal cell cancer
Avastinatezolizumab
RG7601 venetoclax      relapsed or refractory multiple myeloma,
                       acute myelogenous leukemia
RG7413 etrolizumab     ulcerative colitis, Crohn's disease
RG1450 gantenerumab    Alzheimer's disease
RG6168                 neuromyelitis optica
RG7412 crenezumab      Alzheimer's disease
RG6013 emicizumab      hemophilia A, patients without FVIII
                       inhibitors

RG1569 tocilizumab     systemic sclerosis

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

RG7935                 Parkinson's disease
RG7906                 psychiatric disorders
RG7203                 schizophrenia
RG6100                 Alzheimer's disease
RG6029                 pain
RG6000                 amyotrophic lateral sclerosis
RG7992                 metabolic diseases
RG6080 nacubactam      bacterial infections
RG7880                 inflammatory diseases
RG7907                 hepatitis B infection
RG7861                 infections caused by Staphylococcus aureus
RG7990                 asthma
RG6069                 fibrosis
RG7888                 solid tumors
RG7446 atezolizumab    HER2-positive breast cancer
RG6185                 oncology
RG6069                 fibrosis
RG7986                 relapsed or refractory B cell non-Hodgkin's
                       lymphoma
RG7882                 ovarian cancer, pancreatic cancer
RG7828                 hematologic tumours
RG7741                 solid tumors or lymphoma

DRUGS COMING OFF PATENT

DRUG                   INDICATION             YEAR

Tarceva                lung cancer            2018
Lucentis               macular degeneration   2018

TOP SELLING DRUGS

DRUG               INDICATION                    2016 SALES   (+/-%)

MabThera/          rheumatoid arthritis            $7,163       1%
Rituxan
Avastin            breast cancer                   $6,656       -1%
Herceptin          cancer                          $6,656       1%
Perjeta            breast cancer                   $1,811       24%
Actemra/           rheumatoid arthritis            $1,665       15%
RoActemra
Xolair             asthma                          $1,470       14%
Lucentis           macular degeneraton             $1,380       -10%
Activase/TNKase    acute myocardial infarction     $1,087       15%
Tarceva            lung cancer                     $1,005       -16%
Kadcyla            breast cancer                   $815         5%


Roche is a pioneer and leader in biologics for oncology and beyond and with $38.4 billion in drug sales for 2016, it moved up a spot from last year to become the fourth largest drug maker in the world. Sales in Roche's Pharmaceuticals Division were driven by strong growth of Perjeta, Herceptin and Actemra/RoActemra, while lower sales were recorded for Pegasys, Tarceva and Lucentis.

In the U.S., Pharmaceuticals sales advanced 3%, led by the respiratory medicines Xolair and Esbriet. The recently launched medicines Tecentriq and Alecensa contributed to the growth as well. Sales of eye drug Lucentis and cancer medicines Avastin and Tarceva declined due to growing use of other therapeutic options. In Europe, sales growth of 4% was driven by Perjeta, Actemra/RoActemra and MabThera/Rituxan.

FIGHTING CANCER

Roche recently launched four new medicines: Cotellic (advanced melanoma), Alecensa (lung cancer), Venclexta (chronic lymphocytic leukemia) and Tecentriq (bladder and lung cancer). In addition, five FDA breakthrough therapy designations were granted for Roche medicines in 2016.

A major highlight was the U.S. launch of Roche's cancer immunotherapy medicine Tecentriq. It is the first FDA-approved treatment for people with a specific type of bladder cancer in more than 30 years. In addition, the FDA cleared Tecentriq for use in previously treated metastatic non-small cell lung cancer (NSCLC). The pivotal Oak trial showed that people with this form of lung cancer who received Tecentriq live significantly longer, regardless of their PDL1 status, compared with those receiving chemotherapy.

Additional data presented at the ECTRIMS4 congress in September showed that Roche's ocrelizumab increased disease control in both relapsing and primary progressive multiple sclerosis (RMS and PPMS). In March, Roche received regulatory approval for this medicine in RMS and PPMS in the U.S. and the EU.

Roche also presented other important clinical results in 2016. A pivotal study in a group of people with haemophilia A (Haven 1) showed that prophylaxis with emicizumab led to a significant reduction in the number of bleeds over time. A phase III study by Chugai (J-Alex) found that first-line treatment with Alecensa significantly reduced the risk of disease worsening or death compared to crizotinib, the current standard of care, in people with ALK-positive NSCLC. While Gazyva/Gazyvaro showed positive results in a major clinical trial (Gallium) in follicular lymphoma, a separate trial (Goya) of the medicine in diffuse large B-cell lymphoma, did not reach its primary study goal.

Also on the cancer battlefront, during the year, Roche launched the global cancer immunotherapy Centers of Research Excellence (imCORE) Network. This network brings together many of the world's leading scientific and clinical experts in cancer immunotherapy to collaborate in investigating the most promising new treatment approaches. The goal is to rapidly initiate preclinical and clinical research based on the latest scientific discoveries and to aggregate and share data to accelerate the search for cures for people with cancer. The imCORE Network will focus on identifying approaches to expand the number of people who benefit from cancer immunotherapy by exploring new ways to activate a person's immune system to fight their cancer.

Roche will invest up to roughly $100 million to support basic and clinical research collaborations related to cancer immunotherapy. This investment is incremental to Roche's on-going research and development of investigational medicines and treatment approaches in the field of cancer immunotherapy.

To further bolster its research efforts, Roche entered a collaboration with Catalent, through its subsidiary Redwood Bioscience, to develop next-generation molecules coupling different therapeutic modalities using Catalent's proprietary SMARTag technology.

Roche gains non-exclusive access to the SMARTag platform and will have an option to take commercial licenses to develop molecules directed to a defined number of targets. Use of SMARTag, Catalent's programmable protein-modification technology, combined with the highly stable hydrazino-Pictet-Spengler (HIPS) conjugation platform, will permit evaluation of alternative sites of drug conjugation so that Roche may develop molecules optimized for efficacy, safety and stability.

Roche paid Catalent an up-front fee of $1 million and is to provide additional research funding during the initial phase of the collaboration. Catalent has the potential to receive up to $618 million in development and commercial milestones, plus royalties on net sales of products, if Roche pursues commercial licenses and all options are exercised.

RESTRUCTURING SMALL MOLECULES NETWORK

At the end of 2015, Roche unveiled plans to restructure its small molecules manufacturing network. The plans called for the closure of four manufacturing sites in Clarecastle, Ireland; Leganes, Spain; Segrate, Italy; and Florence, SC, in the U.S. The decision was made to address current underutilization as a result of its evolving portfolio.

The transition began in 2016 and is planned to end by 2021. During the year, Roche divested two of the facilities. The 300,000 sq.-ft. API manufacturing plant in Florence was sold to Patheon. At the time of the sale Roche entered into a multi-year supply arrangement with the contract development and manufacturing organization (CDMO).

The Spanish facility in Leganes was sold to the contract manufacturing organization (CMO) Famar. In addition, the two companies at the time of sale signed a long-term manufacturing agreement that will allow Famar Leganes to supply Roche in the future from this facility with the current portfolio of products produced at the site.

With these changes Roche is responding to the evolution of its small molecule portfolio towards specialized medicines produced in lower volumes. To support the manufacture of a new generation of specialized small molecule medicines--produced in lower volumes than traditional medicines--Roche is investing roughly $310 million in a dedicated facility in Kaiseraugst, Switzerland to provide future technology requirements.

05 GLAXOSMITHKLINE

Headquarters: Brentford, Middlesex, UK

twitter.com/GSK

www.gsk.com
HEADCOUNT:           99,300
YEAR ESTABLISHED:      2000
REVENUES:           $37,929     (+7%)
NET INCOME:          $1,240    (-98%)
R&D:                 $4,934     (-6%)

DRUGS APPROVED

DRUG                   INDICATION

Relvar Ellipta         COPD
FluLaval               flu vaccine
  Quadrivalent

DRUGS PENDING

DRUG                   INDICATION

fluticasone furoate    COPD
+ vilanterol +         rheumatoid arthritis
  umeclidinium
  sirukumab
Benlysta               systemic lupus erythematosus
Shingrix               herpes zoster prophylaxis

PHASE IIB AND BEYOND

DRUG                   INDICATION

dolutegravir +
lamivudine             HIV infections
cabotegravir           HIV pre-exposure prophylaxis
tafenoquine            Plasmodium vivax malaria
Relenza                influenza
mepolizumab            COPD
fluticasone            asthma
  furoate +
  vilanterol+
  umeclidinium
sirukumab              giant cell arteritis
2998728                transthyretin-mediated amyloidosis
2696274                metachromatic leukodystrophy
2696275                Wiscott-Aldrich syndrome
mepolizumab            eosinophilic granulomatosis with polyangiitis
retosiban              spontaneous pre-term labour
daprodustat            anaemia associated with chronic renal
                       disease

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

3342830                bacterial infection
2838232                HIV infections
3228836                hepatitis B
3772847                severe asthma
2586881                pulmonary arterial hypertension
2269557                bronchietasis
3008348                idiopathic pulmonary fibrosis
3174998                solid tumours and haematological malignancies
2857916                multiple myeloma
3326595                cancer
2330811                systemic sclerosis
2646264                chronic urticaria
2618960                Sjogren's syndrome
2831781                autoimmune disease
3050002                psoriatic arthritis
3179106                inflammatory disorders of the bowel
daprodustat            wound healing
3008356                nonalcoholic steatohepatitis
2881078                muscle wasting
mepolizumab            severe atopic dermatitis

DRUGS COMING OFF PATENT

DRUG                   INDICATION   YEAR

Lexiva                 HIV          2018
Kivexa                 HIV          2019

TOP SELLING DRUGS

DRUG                 INDICATION          2016 SALES   (+/-%)

Seretide/Advair      asthma, COPD          $4,068     -28%
Triumeq              HIV                   $2,025      105%
Tivicay              HIV                   $1,112      39%
Infanrix, Pediarix   pediatric vaccine     $898       -20%
Ventolin             asthma                $916       -3%
Flixotide/Flovent    respiratory           $743       -22%
Avodart              enlarged prostate     $741       -26%
Lamictal             anti-epileptic        $717       -12%
Epzicom/Kivexa       HIV                   $663       -38%
Augmentin            antibacterial         $657       -19%


GlaxoSmithKline (GSK) moved up a spot from number six last year to round out the 2016 top five pharma companies. The UK-based drug maker's revenue grew to $37.9 billion from $35 billion last year, driven by strong sales of HIV drugs in the Pharmaceuticals segment.

The Pharmaceuticals segment is focused on providing medicines to treat a range of acute and chronic diseases. The broad portfolio includes medicines for respiratory and HIV, in which GSK are global leaders. Segment sales were approximately $20 billion. The respiratory business grew 2% driven by new products launched over the last four years, including Ellipta-based products Breo, Anoro, Arnuity and Incruse as well as biologic Nucala. HIV sales increased 37% driven primarily by strong performances from both Triumeq, a single-pill treatment combining dolutegravir, abacavir and lamivudine, and Tivicay (dolutegravir), an innovative integrase strand transfer inhibitor. The global HIV business is managed through ViiV Healthcare, a company 78.3% owned by GSK, with Pfizer and Shionogi the other shareholders. ViiV Healthcare is growing rapidly, and accounts for over 20% of Pharmaceutical sales.

GSK's Vaccines business has a broad portfolio with vaccines for people of all ages from babies and adolescents to adults and older adults. The company delivers over two million vaccine doses per day to people living in over 160 countries. Vaccines sales grew 26% roughly $4.6 billion during 2016. Performance was driven by sales of new products including meningitis vaccines Bexsero and Menveo, and there was also strong demand for Fluarix /FluLaval.

The Consumer Healthcare business, which develops and markets products in Wellness, Oral health, Nutrition and Skin health categories, includes GSK's seven global power brands--Otrivin, Panadol, parodontax, Poligrip, Sensodyne, Theraflu and Voltaren. Segment sales grew 19% to approximately $10 billion. At a brand level, Sensodyne, Panadol and Otrivin performed strongly with Sensodyne passing the $1 billion mark for the first time.

GSK reported balanced growth across its three global geographies. U.S. sales grew 9% while in Europe sales grew 12% and international market sales grew 8% for the year.

RESEARCH COLLABORATIONS

During the year GSK reported progress on several research collaborations. It exercised its option for an exclusive license to a target under the respiratory diseases research collaboration with Five Prime Therapeutics, triggering a $1.5 million payment to Five Prime. The collaboration, established in 2012, aims to identify new therapeutic approaches to treat refractory asthma and chronic obstructive pulmonary disease (COPD), with a focus on identifying novel therapeutic targets. The collaboration was expanded in April 2014 to include two additional respiratory discovery programs and the research term was extended through July 2016, which GSK committed to fund.

GSK has responsibility for further development and commercialization of products that incorporate or target the licensed protein target. Five Prime is eligible to receive as much as $93 million in milestone payments for each product incorporating the licensed protein. Five Prime is also eligible to receive royalties on sales. The Five Prime discovery platform includes a library of more than 5,700 extracellular proteins believed to encompass all of the body's medically important targets for protein therapeutics.

In another joint research effort, Adaptimmune Therapeutics and GSK expanded the terms of their collaboration agreement to accelerate Adaptimmune's lead clinical cancer program, an affinity enhanced T-cell immunotherapy (GSK3377794) targeting NYESO-1, toward pivotal trials in synovial sarcoma. Adaptimmune and GSK formed a strategic collaboration and licensing agreement in June 2014 for up to five programs, including the lead NY-ESO TCR program. GSK has an option on the NY-ESO-1 program through clinical proof of concept and, on exercise, will assume full responsibility for the program. The companies will accelerate the development of Adaptimmune's NY-ESO therapy into pivotal studies in synovial sarcoma and will explore development in myxoid round cell liposarcoma. Additionally, the companies may initiate up to eight proof-of-principle studies exploring combinations with other therapies, including checkpoint inhibitors. According to the expanded development plan, the studies will be conducted by Adaptimmune with GSK effectively funding the pivotal studies and sharing the costs of the combination studies via a success based milestone structure.

VBI Vaccines entered into a research collaboration with GSK Biologicals SA to evaluate VBI's LPV Platform. VBI's LPV Platform is a proprietary formulation and process that enables the development of vaccines and biologics with improved stability and preserved potency. GSK has the option to negotiate an exclusive license to VBI's LPV Platform for use in a defined field. Stability is a critical issue potentially affecting vaccine potency, safety and ultimately patient access. The LPV Platform uses a proprietary formulation and process to enclose and protect the antigen (active component) of a vaccine or biologic. VBI has completed proof of concept studies on a number of vaccine and biologic targets that demonstrate the LPV Platform's ability to preserve potency under stress conditions.

Lastly, Codexis, a protein engineering company, completed the third and final wave in the transfer of its CodeEvolver protein engineering platform technology to GSK, which paid $7.5 million for completion of this milestone in the second quarter of 2016. The agreement grants GSK a license to use Codexis'CodeEvolver platform technology to develop novel enzymes for use in the manufacture of GSK's pharmaceutical and health care products. Codexis has the potential to receive additional milestone payments ranging from $5.75 million to $38.5 million per project based on GSK's successful application of the licensed technology. Codexis is also eligible to receive royalties based on sales for products using Codexis' CodeEvolver technology. The CodeEvolver platform technology is operational at a GSK R&D facility in Pennsylvania.

In other news during the year, GSK opened a $90 million expansion at an antibiotics factory, enabling the pharma giant to make antibiotics for an extra 100 million patients each year at the plant in Irvine, North Ayrshire. The site has been expanded to meet growing demand from the developing world and emerging markets and the investment creates 55 new jobs with a 35% boost in capacity. The expansion is part of GSK's roughly $360 million investment in Scotland since 2013 between its sites in Irvine and Montrose, Angus. Also, an additional $260 million of investment funding was announced at the opening.

In terms of divestitures, GSK sold to Mayne Pharma a portfolio of marketed dermatology Foam Assets from for $50.1 million. The assets include U.S. rights to Fabior and Sorilux, Canadian rights to Luxiq and Olux-E and Mexican rights to betamethasone foam. Mayne Pharma acquired the approved regulatory filings, trademarks, marketing materials, select product inventory, and will acquire or obtain licenses for related patents.

WORKING WITH THE FRANCIS CRICK INSTITUTE

GSK joins forces with world-leading biomedical research center

A landmark collaboration between GSK and the Francis Crick Institute aims to achieve new breakthroughs in understanding and treating diseases. The open innovation collaboration combines GSK's pharmaceutical R&D expertise with the Crick's deep knowledge of disease biology.

The mutual aim is to explore new avenues of medical research and drug discovery across a range of diseases. The collaboration takes a 'LinkLabs' approach to working, with teams of scientists from each organization working side-by-side in integrated teams at the Crick's center of biomedical research in the heart of London and GSK's global R&D hub in Stevenage. GSK and the Crick believe this fluid interchange of skills and ideas benefits both sides, introducing new ways of working and stimulating the development of novel approaches to problems. By pooling knowledge and resources the goal of the collaboration is ultimately to improve the success rate for discovering new medicines.

In the spirit of open innovation, research findings from the collaboration will be shared externally, via joint publication in peer-reviewed journals. This will enable important discoveries to be applied across the research community, maximizing the potential to progress scientific understanding and accelerate the development of treatments for patients.

The Francis Crick Institute is a charity funded by the Medical Research Council, Cancer Research UK, the Wellcome Trust, University College London, Imperial College London and King's College London.

06 SANOFI

Headquarters: Paris, France

twitter.com/sanofi

www.sanofi.com
HEADCOUNT:          113,816
YEAR ESTABLISHED:      2004
REVENUES:           $35,633     (-1%)
NET INCOME:          $9,782    (flat)
R&D:                 $5,449     (+2%)

DRUGS APPROVED

DRUG                      INDICATION

Kevzara                   rheumatoid arthritis
Dupixent                  atopic dermatitis
Suliqua                   type 2 diabetes
Adlyxin                   type 2 diabetes

DRUGS PENDING

DRUG                      INDICATION

Dupixent                  atopic dermatitis
SAR342434                 type 1 +2 diabetes
Dengvaxia                 dengue fever vaccine
PR5i                      pediatric hexav. vaccine
VaxiGrip QIV IM           influenza vaccine (3 years+)

PHASE IIB AND BEYOND

DRUG                      INDICATION

dupilumab                 asthma, nasal polyposis
isatuximab                relapsed refractory multiple myeloma
patisiran                 familial amyloidotic polyneuropathy
GZ402666                  Pompe disease
sotagliflozin n           type 1 & type 2 diabetes
Clostridium difficile     toxoid vaccine
VaxiGrip QIV IM           influenza vaccine (6-35 months)
Pediatric pentavalent     DTP-Polio-Hib
  vaccine
Men Quad TT               ACYW conjugate vaccine

EARLY RESEARCH PROJECTS

DRUG                      INDICATION

SAR440340                 asthma
SAR439794                 peanut allergy
GZ402668                  relapsing multiple sclerosis
UshStat                   usher syndrome 1B
SAR228810                 Alzheimer's disease
SAR408701                 solid tumors
SAR428926                 cancer
SAR438335                 type 2 diabetes
SAR341402                 diabetes
SAR440181                 dilated cardiomyopathy
SAR247799                 cardiovascular indication
SAR407899                 microvascular angina
Zika                      vaccine
Herpes Simplex            HSV-2 vaccine
  Virus Type 2
RSV                       vaccine

DRUGS COMING OFF PATENT

DRUG                      INDICATION           YEAR

Apidra                    type 1 diabetes      2018
Aldurazyme                enzyme replacement   2019

TOP SELLING DRUGS

DRUG                 INDICATION             2016 SALES   (+/-%)

Lantus               diabetes                 $6,020     -11%
Plavix               heart attack, stroke     $1,627     -20%
Lovenox              thrombosis               $1,724     -5%
Polio/Pertussis/     vaccines                 $1,575      11%
  Hib Vaccines
Influenza            vaccines                 $1,602      15%
  Vaccines
Renvela/Renagel      hypocalcemia             $971       -1%
Aprovel /Avapro      hypertention             $717       -11%
Cerezyme             Gaucher disease          $788       -1%
Myozyme /            Pompe disease            $764        12%
  Lumizyme
Meningitis/          vaccines                 $667        3%
Pneumonia Vaccines


Sanofi reported revenues of $35.6 billion for 2016, dropping it from number three last year ($40.4B) to number 6 this year, due mostly to the negative impact of foreign exchange rates. The year started with Paris-based Sanofi reorganizing its business, which now consists of the following five business units: Sanofi Genzyme, the specialty care business that includes multiple sclerosis, rare diseases, and oncology; Diabetes and Cardiovascular; Generic Medicines and Emerging Markets; Consumer Healthcare; and Sanofi Pasteur, or the Human Vaccines segment. On January 1, 2017, Sanofi and Boehringer Ingelheim completed the exchange of Merial, Sanofi's animal health business and Boehringer Ingelheim's consumer healthcare business.

STRENGTHENING BIOLOGICS FOOTPRINT

Sanofi grew its biologics footprint during the year through research collaborations and facility expansions. With Global Genomics Group (G3) it entered into a research collaboration to identify new signaling pathways and targets involved in coronary artery disease. The companies will use G3's platform with data from its G3LOBAL Database to further decipher the molecular underpinnings of LDL-cholesterol regulation and to better understand which patients may benefit from interference with these signaling pathways.

In a deal with Jubilant Biosys Ltd, a Bengaluru-based subsidiary of Jubilant Life Sciences Ltd., Sanofi Deutschland GmbH, entered a strategic alliance to discover and develop small molecule inhibitors for multiple targets in metabolic disorders. The research alliance aims to develop therapeutic small molecules that will address the unmet needs in diabetes and obesity. Jubilant will provide drug discovery and early development services across computational, synthetic chemistry, biology, GLP/ GMP services, to identify lead candidates and demonstrate clinical proof of mechanism. The research for the projects take place at R&D labs of Jubilant Biosys and Jubilant Chemsys in Noida, India.

Sanofi and Innate Pharma entered a research collaboration and licensing agreement to apply Innate Pharma's new proprietary technology to the development of innovative bispecific antibody formats engaging natural killer (NK) cells to kill tumor cells through the activating receptor NKp46. Both companies will work together on the generation and evaluation of up to two bispecific NK cell engagers, using technology from Innate Pharma and Sanofi's proprietary bispecific antibody format as well as tumor targets. Sanofi will be responsible for the development, manufacturing and commercialization of products resulting from the research collaboration. Innate Pharma will be eligible to receive as much as $450 million in development and commercial milestone payments, as well as royalties on net sales.

Recursion Pharmaceuticals entered a research agreement with Sanofi Genzyme to deploy its drug repurposing platform to identify new uses for Sanofi's clinical stage molecules across dozens of genetic diseases. Recursion generates human cellular models of many diseases and uses computer vision to extract thousands of morphological measures at the level of individual cells. Molecules are then screened for their ability to rescue phenotypic defects associated with each disease. Recursion has already used the platform to generate an internal pipeline of candidates for a handful of genetic diseases, with a lead asset nearing IND for the treatment of Cerebral Cavernous Malformation. Sanofi will provide Recursion with a number of small molecules, and Recursion will screen these molecules across its extensive and rapidly expanding library of genetic disease models. Sanofi Genzyme will have the option to develop products targeting any new indications identified.

Warp Drive Bio, a life sciences company developing therapeutics that exploit the molecules and mechanisms of nature, during the year reached a milestone in the antibiotic discovery program under its research collaboration with Sanofi. Sanofi assumed all preclinical and clinical development efforts for the novel aminoglycoside antibiotic candidates discovered by Warp Drive. This program is one of several natural product-based programs utilizing Warp Dive's Genome Mining technology platform.

The Biomedical Advanced Research and Development Authority (BARDA), within the Office of the Assistant Secretary for Preparedness and Response in the U.S. Department of Health and Human Services, awarded Sanofi a $37.6 million contract to supply and manage inventory for Leukine. Sanofi Genzyme is developing Leukine for the treatment of acute radiation syndrome, a serious illness that occurs in people exposed to high doses of radiation. In 2013, Sanofi was awarded a $36.5 million contract for late stage development and procurement of Leukine. Since then Sanofi Genzyme has conducted studies regarding the potential use of Leukine in patients acutely exposed to myelosuppressive doses of radiation (Hematopoietic Syndrome of Acute Radiation Syndrome). The company plans to submit a supplemental Biologics License Application (sBLA) to the FDA this year.

Sanofi also unveiled plans to develop and commercialize biologics in China through a partnership with JHL Biotech, a biopharma company with development and manufacturing facilities in Wuhan and Taiwan. The two companies entered a strategic alliance to develop and commercialize biologics in China with potential international expansion.

As part of the deal, Sanofi invested $80 million in newly issued JHL shares and paid $21 million upfront to acquire exclusive rights for the proposed biosimilar of Rituximab and options to certain JHL pipeline products. JHL will lead the development, registration, and manufacturing activities, while Sanofi will lead commercialization efforts in China. JHL is entitled to receive milestones of as much as $236 million and sales royalties.

SANOFI INVESTS 340M [euro] TO EXPAND BIOLOGICS SITE IN BELGIUM

Additions to existing site will support production of monoclonal antibodies

During the year Sanofi unveiled plans for an approximately $340 million expansion at its site in Geel, Belgium, to drive the future of biologics by expanding manufacturing and commercial capabilities in order to ensure quality, capacity, and scale.

Through the investment, Sanofi plans to adapt and expand existing production capabilities to support its pipeline of monoclonal antibodies. Updates to the existing facility will include the development of new laboratories focused on quality control and manufacturing sciences.

Sanofi and its specialty care global business unit, Sanofi Genzyme, have already invested roughly $685 million in the Geel site, which began industrial biotech activities in 2001. The site is currently responsible for the global production of a protein therapy for Pompe disease, a rare, genetic muscular disease that is often fatal. The protein therapy is produced using cell cultures in large bioreactors, followed by a purification process.

Through this latest investment, the state-of-the-art facility will add more than 8,000 square meters of manufacturing floor space, enabling the site to increase its overall production capacity and diversify to other drugs and therapeutic areas.

As part of the company's strategic roadmap, Sanofi aims to launch several biologics in the upcoming years, pairing technology, cutting-edge manufacturing and operations capabilities to deliver high-quality products that could improve patient outcomes.

07 JOHNSON & JOHNSON

Headquarters: New Brunswick, NJ

twitter.com/JNJComm

www.jnj.com
HEADCOUNT:          127,000
YEAR ESTABLISHED:      1887
REVENUES:           $71,890    (+3%)
PHARMA REVENUES:    $33,464    (+7%)
NET INCOME:         $16,540    (+7%)
R&D:                 $9,095    (+1%)

DRUGS APPROVED

DRUG                      INDICATION

DDarzalex                 relapsed/refractory multiple myeloma in
                          combination with lenalidomide/dexamethasone
Imbruvica                 marginal zone lymphoma in patients who
                          require systemic therapy
Stelara                   moderately to severely active Crohn's
                          disease
Invokamet XR              once-daily, fixed-dose combination for
                          type 2 diabetes
Imbruvica                 previously untreated chronic lymphocytic
                          leukaemia

DRUGS PENDING

DRUG                      INDICATION

Simponi Aria              ankylosing spondylitis
sirukumab                 rheumatoid arthritis
Stelara                   pediatric psoriasis
Imbruvica                 chronic graft-versus-host-disease
Zytiga                    prostate cancer newly diagnosed hormone
                          naive metastatic

PHASE IIB AND BEYOND

DRUG                      INDICATION

Xarelto                   reduce the risk of major adverse cardiac
                          events, prevention of symptomatic VTE
                          and VTE-related death, VTE prophylaxis in
                          ambulatory cancer patients
Invokana                  diabetic nephropathy
Ulcerative Colitis        ulcerative colitis, axial spondylytis
  Axial Spondylytis
Darunavir STR             single tablet regimen for HIV in treatment
                          naive patients and treatment experienced
                          patients
Endurant STR              single tablet regimen for HIV
Darzalex                  frontline multiple myeloma transplant
                          eligible in combination with bortezimib,
                          thalidomide and dexamethasone
Imbruvica                 treatment naive patients with mantle cell
                          lymphoma, relapsed/refractory patients
                          with indolant non-Hodgkins lymphoma,
                          non-germinal center B-cell subtype of
                          diffuse large B-cell lymphoma, frontline
                          chronic lymphocytic leukemia
apalutamide               prostate cancer pre-metastatic
                          castration-resistant
Yondelis                  relapsed ovarian cancer

EARLY RESEARCH PROJECTS

DRUG                      INDICATION

Ceftobiprole              staphylococcal skin infections
JNJ-39758979              rheumatoid arthritis
CPI-1205                  B-Cell lymphoma
CPI-0610                  leukemia, myelocytic, acute, myelodys
                          plastic syndrome
Doxazosin                 PTSD, alcohol use disorder
Sotatercept               diamond blackfan anemia
VLX600                    refractory cancer
ALRN-6924                 acute myeloid leukemia, myelodysplastic
                          syndromes
MSB0011359C               solid tumors

DRUGS COMING OFF PATENT

DRUG                      INDICATION                 YEAR

Velcade                   mantle cell lymphoma       2017
Remicade                  rheumatoid arthritis       2018

TOP SELLING DRUGS

DRUG                INDICATION              2016 SALES   (+/-%)

Remicade            rheumatoid arthritis      $6,966      6%
Stelara             psoriasis                 $3,232      31%
Xarelto             deep vein thrombosis,     $2,288      23%
                    pulmonary embolism
Zytiga              prostate cancer           $2,260      1%
Invega Sustenna     schizophrenia             $2,214      21%
Prezista            HIV/AIDS                  $1,851      2%
Simponi             rheumatoid arthritis      $1,745      31%
Invokana            type 2 diabetes           $1,407      7%
Imbruvica           oncology                  $1,251      82%
Velcade             velcade, mantle           $1,224      -8%
                    cell lymphoma


Headquartered in New Brunswick, NJ, Johnson & Johnson 0&J) operates in more than 60 countries while its pharmaceutical and healthcare products are supplied to over 200 countries. The Pharmaceutical segment contributes nearly 47% of J&J's total revenues. The segment reported 2016 revenues of $33.5 billion--a 7% increase over 2015--and comprises several franchises: Immunology, Infectious Disease, Neuroscience, Oncology, and Cardiovascular and Metabolics. The major blockbuster drugs under the Immunology franchise are Remicade, Stelara, and Simponi/Simponi Aria. The franchise revenues reported growth of 7% to $12 billion in 2016.

CANCER COLLABORATIONS

J&J's Oncology franchise grew 24% to $6 billion during 2016, driven by increased sales of Imbruvica and a strong uptake of Darzalex. During the year Janssen Biotech, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, entered several cancer collaborations. First it teamed up with Tesaro for exclusive rights to the investigational compound niraparib in prostate cancer. Niraparib is an orally administered, once daily, potent, and highly selective poly polymerase (PARP) inhibitor, currently in late-stage development for patients with metastatic breast cancer and ovarian cancer. Janssen will develop and commercialize niraparib for patients with prostate cancer worldwide, except in Japan. Tesaro received an upfront payment of $35 million, and is eligible to receive additional milestone payments of up to $415 million.

With Bristol-Myers Squibb (BMS), Janssen entered a clinical research collaboration to evaluate BMS' immuno-oncology drug Opdivo (nivolumab) and Janssen's Live Attenuated Double-Deleted (LADD) Listerial monocytogenes cancer immunotherapy, expressing mesothelin and EGFRvIII (JNJ-64041757), in patients with non-small cell lung cancer (NSCLC). Opdivo is a human antibody designed to alleviate immune suppression. JNJ-64041757 is designed to induce an immune response against NSCLC tumors.

Later in the year, Janssen entered into a master clinical trial collaboration and supply agreement with Onyx Pharmaceuticals, a subsidiary of Amgen, to evaluate the efficacy and safety of CD38-directed immunotherapy daratumumab (DARZALEX) in combination with a proteasome inhibitor (PI) carfilzomib (KYPROLIS) and dexamethasone. The agreement covers all potential opportunities for combining daratumumab and carfilzomib to treat cancer. Janssen licensed daratumumab from Genmab and is responsible for all global development, marketing and manufacturing. Carfilzomib is developed and commercialized by Amgen.

Industrial bioscience company Amyris entered into a research agreement with Janssen facilitated by Johnson & Johnson Innovation. The collaboration will use Amyris's [micro]Pharm platform technology to develop a customized library of natural and natural-like compounds to test against Janssen's therapeutic target. Amyris's pPharm platform technology enables an integrated discovery and production process for therapeutic compounds. It provides access to scarce natural compounds and also creates new diversity based on natural compound scaffolds.

Janssen Biotech also licensed Ionis Pharmaceuticals' IONIS-JBIl-2.5Rx, an oral antisense drug for the treatment of a GI autoimmune disease, for $10 million. Janssen assumes all global development, regulatory and commercialization responsibilities after Ionis completes the IND-enabling studies. Ionis is eligible to receive as much as $800 million in development, regulatory and sales milestones and license fees for three programs, as well as royalties on sales from any product that is successfully commercialized.

Janssen Pharmaceutica NV divested five anesthesia and pain management injectable products to Piramal Enterprises' wholly owned Critical Care subsidiary in the UK for $155 million. The products include five injectable versions of Janssen's Sublimaze (fentanyl citrate), Sufenta (sufentanil citrate), Rapifen (alfentanil hydrochloride), Dipidolor (piritramide), and Hypnomidate (etomidate), which are currently marketed in more than 50 countries. Piramal acquired the brand names and related IP, including how to make both the API and the finished dosage forms of the products. The acquisition does not include the transfer of any manufacturing facilities or employees. Janssen will continue to supply finished dosage forms for up to three years and API for up to five years, and will continue to sell the products on behalf of Piramal until the marketing authorizations or relevant business relations are transferred to Piramal.

J&J BUYS ACTELION FOR $30B

Actelion to spin out R&D ops and assets

During the year Johnson & Johnson entered into a mega deal to acquire Actelion Ltd. for approximately $30 billion.

Actelion, based in Allschwil, Switzerland, has a franchise of differentiated, innovative products for pulmonary arterial hypertension (PAH), as well as specialty in-market medicines and late-stage products. J&J expects to retain Actelion's presence in Switzerland and leverage its complementary capabilities to shape medical paradigms.

As part of the transaction, Actelion will spin out its drug discovery operations and early-stage clinical development assets into a newly created Swiss biopharma company, R&D NewCo. Johnson & Johnson also received an option on ACT-132577, a product being developed for resistant hypertension currently in Phase II development.

08 GILEAD SCIENCES

Headquarters: Foster City, CA

twitter.com/gileadsciences

www.gilead.com
HEADCOUNT:            8,900
YEAR ESTABLISHED:      1987
REVENUES:           $30,390    (-7%)
NET INCOME:         $13,488    (-26%)
R&D:                 $5,098    (+69%)

DRUGS APPROVED

DRUG                   INDICATION

Harvoni and Sovaldi    pediatric patients 12 years and older with
                       HCV infection
Vemlidy                chronic hepatitis B virus
Once-Daily Truvada     reducing the risk of sexually acquired HIV-1
Epclusa                all genotypes of chronic hepatitis C
Odefsey STR            HIV-1 infection

DRUGS PENDING

DRUG                   INDICATION

Sofosbuvir,            chronic HCV infection
velpatasvir and
voxilaprevir STR
Bictegravir/F/TAF      HIV/AIDS

PHASE IIB AND BEYOND

DRUG                   INDICATION

Selonsertib            NASH
Idelalisib             relapsed refractory CLL
Andecaliximab          gastric cancer
Filgotinib             Crohn's disease, ulcerative colitis
Entospletinib          chronic graft versus host disease
Presatovir             respiratory syncytial virus
GS-9876                rheumatoid arthritis, Sjogren's syndrome,
                       cutaneous lupus erythematosus
GS-5734                Ebola virus infection

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

GS-9620                HIV/AIDS
GS-9688                chronic HBV infection
Andecaliximab          solid tumors
GS-5829                solid tumors

DRUGS COMING OFF PATENT

DRUG                   INDICATION   YEAR

Atripla                HIV          2018
Complera               HIV          2018

TOP SELLING DRUGS

DRUG         INDICATION            2016 SALES   (+/-%)

Harvoni      chronic hepatitis C     $9,081      -34%
Sovaldi      chronic hepatitis C     $4,001      -24%
Truvada      HIV                     $3,566       3%
Atripla      HIV                     $2,605      -15%
Stribild     HIV                     $1,914       5%
Epclusa      chronic hepatitis C     $1,752      n/a
Complera /   HIV                     $1,457       2%
  Eviplera
Viread       chronic hepatitis B     $1,186       7%


Despite having lost a portion of its dominant share in the increasingly competitive Hep C market, Gilead only slipped one slot in this year's rankings to 8. While the company took a hit financially, with revenues down 7% and earnings down 26%, it was expected, and Gilead's competitors reaped the rewards.

HCV product sales, which consist of Harvoni, Sovaldi and Epclusa were $14.8 billion for the year, compared to $19.1 billion in 2015. Declines were due to lower sales of Harvoni and Sovaldi, partially offset by sales of Epclusa, which was launched in 2016 in various countries.

R&D expenses, which were up a whopping 69% in 2016, increased primarily due to overall clinical costs, including ongoing milestone payments, and Gilead's purchase of a U.S. EDA priority review voucher. R&D expenses also include up-front collaboration expenses related to Gilead's license and collaboration agreement with Galapagos NV, purchase of Nimbus Apollo, Inc. and impairment charges related to IPR&D.

Despite key competition and fewer patients, due to the curative nature of its Hep C products, a large untapped market remains and Gilead has been working to build awareness among an estimated 2.5 million baby boomers in the U.S. If Gilead can maintain its market share in this segment, there is still money to be made.

With its multi-billion dollar HCV franchise, Gilead's closest competitors remain far behind. Even though Merck, AbbVie, and BMS each have HCV drugs for at least one of the six genotypes, their combined sales don't touch Gilead's numbers. Additionally, Gilead's newest pan-genotype drug Epclusa, approved last June, surpassed its competition in 2016 with $1.8 billion in sales, and it should have a strong hold in the near term.

Epclusa represents the first all-oral, pan-genotypic, single tablet regimen for the treatment genotype 1-6 chronic hepatitis C virus (HCV) infection. It's also the first single tablet regimen approved for the treatment of patients with HCV genotype 2 and 3, without the need for ribavirin.

Despite high cure rates and simplified treatment for most HCV patients, those who have failed previous treatment with direct acting antivirals continue to represent an unmet medical need. Study results demonstrate that combining three potent antivirals with different mechanisms of action and high barriers to resistance can provide high cure rates for patients who have failed other highly effective oral DAA regimens.

Gilead's pending SOF/VEL/VOX fixed-dose combination was granted Breakthrough Therapy designation by the U.S. FDA for the treatment of chronic genotype 1 HCV patients who previously failed an NS5A inhibitor-containing regimen.

Additionally, the European Commission approved Gilead's Vemlidy (Tenofovir Alafenamide,TAF) for the treatment of Chronic Hepatitis B Virus Infection, which is the first new treatment for chronic hepatitis B to be approved in Europe in nearly a decade. TAF is a targeted prodrug of tenofovir that has demonstrated antiviral efficacy similar to Viread, but at one-tenth the dose. TAF is associated with improved renal and bone lab safety parameters compared to TDF in clinical trials.

Vemlidy was approved by the FDA in November 2016 for the treatment of chronic HBV infection in adults with compensated liver disease, and by the Japanese Ministry of Health, Labour and Welfare in December 2016 for the suppression of viral replication in chronic hepatitis B patients with evidence of hepatitis B virus replication and abnormal liver function.

In the near term, Gilead has decent growth potential. Within the next few years. Bictegravir could significantly boost HIV franchise sales. Bictegravir is a combo alternative integrase inhibitor that would come in single tablet form. GSK's Tivicay has led the market in this space with its HIV segment up 57% in the first quarter, led by Tivicay sales. Gilead stands to recoup some of the market share it lost in this space once Bictegravir hits the market.

Recent trials demonstrated that Gilead's bictegravir combination could offer an improvement over existing therapies. In four Phase III studies, bictegravir met its primary objective of noninferiority. Gilead plans to submit a marketing authorization application for BIC/FTC/TAF in the EU in the third quarter of 2017.

Three of the ongoing studies are designed to explore the safety and efficacy of BIC/FTC/TAF compared to triple-therapy regimens containing dolutegravir in treatment-naive patients and virologically suppressed patients switching from an existing antiretroviral regimen with dolutegravir. A fourth study in virologically suppressed patients compares switching to BIC/FTC/TAF versus remaining on a suppressive regimen of two nucleoside/ nucleotide reverse transcriptase inhibitors and protease inhibitor.

Because people with HIV are living longer and are increasingly likely to be taking medication for other conditions, such as heart and liver disease, they are exposed for longer periods of time to the virus and to the medications used to treat it. Therefore, new, effective treatment options are needed that are also tolerable, and offer convenient dosing.

Helping to fulfill this need, Gilead's once-daily single tablet regimen Odefsey for the treatment of HIV-1 in certain patients, was granted approval in the EU in June 2016, and in the U.S. in March 2016. Odefsey combines Gilead's emtricitabine and tenofovir alafenamide (marketed as Descovy) with rilpivirine, marketed by Janssen Sciences Ireland UC, a Johnson & Johnson company. Following the approval of Genvoya in November 2015, Odefsey is Gilead's second STR based on the Descovy backbone to receive marketing authorization in the EU and is currently the smallest pill of any STR for the treatment of HIV.

Additionally, the European Commission approved Gilead's once-daily Truvada for reducing the risk of sexually acquired HIVl. This represents the first antiretroviral medicine to be licensed in Europe for pre-exposure prevention, in combination with safersex practices, to reduce the risk of HIV-1 in high risk adults.

To maintain its position in the top 10, Gilead needs a new outlet. So far, its oncology efforts have been challenged. Its only approved oncology asset is idelalisib, marketed as Zydelig, which is a second line therapy with boxed warning in three indications: Relapsed chronic lymphocytic leukemia (CLL), in combination with rituximab, in patients for whom rituximab alone would be considered appropriate therapy due to other co-morbidities; Relapsed follicular B-cell non-Hodgkin lymphoma in patients who have received at least two prior therapies; and Relapsed small lymphocytic lymphoma (SLL) in patients who have received at least two prior therapies. Needless to say, Zydelig hasn't taken off in the oncology sector as anticipated.

Other oncology pipeline assets include: Andecaliximab, an MMP9 inhibitor currently in Phase III trials in gastric cancer, entospletinib, a SYK inhibitor in Phase II in acute myeloid leukemia, and hematopoietic and lymphoid malignancies; and tirabrutinib, a BTK inhibitor in Phase II for B-cell malignancies, as well as couple candidates in early development.

In November, Gilead achieved top-line results from two Phase III trials (SIMPLIFY 1 and 2) that evaluated momelotinib, an investigational inhibitor of Janus kinase 0AK) compared to ruxolitinib or best alternative therapy (BAT) in myelofibrosis, a relatively rare bone marrow cancer. The SIMPLIFY-1 study achieved its pre-specified primary endpoint of non-inferiority to ruxolitinib for splenic response rate, defined as the percentage of patients experiencing a 35% reduction in spleen volume, but SIMPLIFY-2 failed to achieve its primary endpoint of superiority of momelotinib compared to BAT in patients previously treated with ruxolitinib.

In the "other" category, NASH, or nonalcoholic steatohepatitis, is a therapeutic area being pursued by Gilead, and several other drug developers. Allied Market Research estimates that the global market is expected to reach $1.6 billion by 2020. The high prevalence of Type II diabetes and obesity, which leads to NASH and other nonalcoholic fatty liver diseases, has created this market. North America has the highest rates of NASH and other nonalcoholic fatty liver diseases and Europe ranks second in terms of the prevalence.

Results from a Phase II trial evaluating the investigational apoptosis signal-regulating kinase 1 (ASK1) inhibitor selonsertib alone or in combination with the monoclonal antibody simtuzumab (SIM) in NASH and moderate to severe liver fibrosis, demonstrated regression in fibrosis that was, in parallel, associated with reductions in other measures of liver injury in patients treated with selonsertib.

While competition for Gilead's top franchises took its toll in 2016, HCV and HIV assets moving through the pipeline are likely to put this antiviral authority back on top--remaining there may prove more difficult. A breakthrough product in oncology, cell therapy, or NASH is needed in the long term.

09 ABBVIE

Headquarters: North Chicago, IL

twitter.com/abbvie

www.abbvie.com
HEADCOUNT:           29,000
YEAR ESTABLISHED:      2013
REVENUES:           $25,638    (+12%)
NET INCOME:          $5,953    (+16%)
R&D:                 $4,366    (+2%)

DRUGS APPROVED

DRUG                      INDICATION

Humira                    hidradenitis suppurativa, uveitis
Venclexta                 chronic lymphocytic leukemia with 17p
                          deletion
Imbruvica                 relapsed/refractory marginal zone lymphoma
Empliciti                 multiple myeloma, second line
Duodopa                   Parkinson's disease
Zinbryta                  multiple sclerosis

DRUGS PENDING

DRUG                      INDICATION

Imbruvica                 graft-versus-host-disease
glecaprevir/              GT1 -6 chronic hepatitis C virus
pibrentasvir

PHASE IIB AND BEYOND

DRUG                      INDICATION

ABT-494                   rheumatoid arthritis
Risankizumab              psoriasis
Empliciti                 first line multiple myeloma
Imbruvica                 diffuse large B-cell lymphoma, follicular
                          lymphoma, pancreatic cancer
Rova-T                    small cell lung cancer
Veliparib                 breast cancer, lung cancer, ovarian cancer
Venclexta                 chronic lymphocytic leukemia, multiple
                          myeloma, acute myeloid leukemia
Atrasentan                diabetic nephropathy
Elagolix                  endometriosis, uterine fibroids

EARLY RESEARCH PROJECTS

DRUG                      INDICATION

ABBV-323                  Crohn's disease
ABBV-553                  psoriasis
ABBV-599                  rheumatoid arthritis
ABBV-075                  acute myeloid leukemia, multiple myeloma
ABBV-085                  solid tumors
ABBV-621                  solid and hematologic tumors
ABBV-838                  multiple myeloma
ABT-414                   pediatric brain tumors
ABT-RTA 408               melanoma
ABBV-951                  Parkinson's disease
ABT-555                   multiple sclerosis
ABBV-2451                 cystic fibrosis

DRUGS COMING OFF PATENT

DRUG                      INDICATION             YEAR

Humira                    rheumatoid arthritis   2018
Kaletra                   HIV/AIDS               2018

TOP SELLING DRUGS

DRUG           INDICATION             2016 SALES   (+/-%)

Humira         rheumatoid arthritis    $16,078      15%
Imbruvica      chronic lymphocytic     $1,832       143%
                 leukemia
Viekira        hepatitis C             $1,522       -7%
Lupron         hormone treatment       $821         -1%
Synthroid      hyperthyroidism         $763         1%
Synagis        RSV                     $730         -2%
Creon          digestion               $730         16%
AndroGel       testosterone            $675         -3%
Kaletra        HIV/AIDS                $549         -22%
Sevoflurane    anesthesia              $428         -10%


In 2016 AbbVie delivered its best year yet since it launched in 2013 after separating from Abbott Laboratories. With strong growth performance, new product launches and the addition of Stemcentrx to advance its work within oncology, AbbVie delivered revenue growth of more than 13% to $25.6 billion, placing it as the ninth largest pharma company in the world.

AbbVie operates in one business segment--pharmaceutical products. Its blockbuster biologic Humira (adalimumab), which is used to treat a range of autoimmune diseases, continues to anchor the company accounting for more than 60% of total revenues. The rising star in AbbVie's portfolio is the cancer drug Imbruvica, whose sales shot up 143% to $1.8 billion in 2016. The company also offers products for Virology, Metabolics/Hormones, Endocrinology.

In 2016, AbbVie launched several new products and expanded indications across immunology, oncology, virology and neuroscience. The company also advanced its research in oncology with Stemcentrx and its novel compound, rovalpituzumab tesirine (Rova-T), which is currently in late-stage clinical trials for solid tumor cancers.

AbbVie made the mega deal to acquire Stemcentrx and its lead late-stage asset Rova-T for $5.8 billion in April 2016. The company says Rova-T is a novel biomarker-specific therapy that is derived from cancer stem cells and targets delta-like protein 3 (DLL3) that is expressed in more than 80% of SCLC patient tumors and is not present in healthy tissue. AbbVie boasts an oncology development program of more than 200 clinical trials across more than 20 tumor types.

At the beginning of the year, MD Anderson Cancer Center and AbbVie entered a three-year immunotherapy collaboration to select and conduct preclinical and clinical studies evaluating new ideas in the area of immuno-oncology. AbbVie's research efforts in immunotherapy leverage the companys strengths in biology, protein engineering and chemistry. MD Anderson's immunotherapy platform includes technology for preclinical modeling, clinical trials and immune monitoring before, during and after treatment to better understand drug mechanisms and identify biomarkers to guide treatment. AbbVie and MD Anderson will each assign two scientists to a joint scientific committee to decide on projects to pursue. The collaboration will initiate with projects driven by AbbVie Biotherapeutics, AbbVie's center of innovation in the biotech hub of the San Francisco Bay Area. Future projects will draw from AbbVie's portfolio of oncology programs.

At the end of the year, AbbVie and Northwestern University signed a five-year collaboration agreement to advance research and discovery in oncology. AbbVie and the Robert H. Lurie Comprehensive Cancer Center of Northwestern will work in several areas of oncology research, including, lung, colorectal, breast, prostate and hematological cancer.

The collaboration provides Lurie Cancer Center scientists with the opportunity to access new therapies developed by AbbVie for preclinical research funded under the agreement, as well as AbbVie's research teams. AbbVie has the option to obtain an exclusive license of certain Lurie Cancer Center discoveries made under the five-year collaboration.

AbbVie set up additional collaborations with several other companies. One with Boehringer Ingelheim aims to develop and commercialize BI 655066, an anti-IL-23 monoclonal antibody in Phase III development for psoriasis. The companies are also evaluating the drug's potential in Crohn's disease, psoriatic arthritis and asthma. In addition to the anti-IL-23 antibody, AbbVie gains rights to an anti-CD-40 antibody, BI 655064, currently in Phase I development. Boehringer will retain responsibility for further development of BI 655064, and AbbVie may elect to advance the program after certain undisclosed clinical achievements.

AbbVie also formed a collaboration with Argenx, a clinical-stage biopharmaceutical company, to develop and commercialize ARGX115, Argenx'preclinical human antibody program targeting the novel immuno-oncology target GARR a protein believed to contribute to immuno-suppressive effects of T-cells. Argenx will conduct research and development through IND-enabling studies. Upon successful completion of these studies, AbbVie may exercise an exclusive option to license the ARGX-115 program and assume responsibility for further clinical development and commercialization. In addition to the ARGX-115 program, and upon reaching a predetermined preclinical stage milestone, AbbVie will fund further GARP-related research by Argenx for an initial period of two years.

CytomX Therapeutics teamed up with AbbVie to co-develop and commercialize Probody Drug Conjugates against CD71, which is highly expressed in a number of solid and hematologic cancers and has molecular properties for efficient delivery of cytotoxic payloads to tumor cells. Probody therapeutics are designed enhance the tumor-targeting features of an antibody and reduce drug activity in healthy tissues. CytomX has generated preclinical data that demonstrates that Probody drug conjugates can safely and effectively target tumor antigens, such as CD71, that are not addressable by conventional antibody-drug conjugates.

Lastly, Galapagos NV and AbbVie expanded their agreement in cystic fibrosis (CF) to reflect the successful expansion of their CF portfolio. The companies aim to develop a triple CFTR combination therapy to address 90% of patients with CF. In order to bring a more effective therapy to patients, the companies have developed multiple candidates and backups for each of the three components of a potential triple combination.

ABBVIE OPENS FIRST PHASE OF SINGAPORE FACILITY

New site to expand the company's global operations for small molecule and biologics manufacturing

AbbVie has strengthened its manufacturing capabilities by opening the small molecule active pharmaceutical ingredient (API) facility of its Singapore manufacturing site. This facility supports the growth of AbbVie's oncology and women's health pipeline and reflects progress from AbbVie's two previous announcements for manufacturing investment in Asia in 2014.

The new 120,000 square-meter site located in the Tuas Biomedical Park is AbbVie's first manufacturing facility in Asia and will also include a biologics manufacturing facility that is expected to be fully operational by the end of 2018. Combined, the API and biologics facilities represent a $320 million investment in Singapore that will employ more than 250 new employees, the majority of whom will be hired locally in Singapore, including skilled positions across manufacturing, technical operations, administration, quality, information technology and supply chain.

10 ASTRAZENECA

Headquarters: London, UK

twitter.com/astrazeneca

www.astrazeneca.com
HEADCOUNT:           59,700
YEAR ESTABLISHED:      1999
REVENUES:           $23,002    (-7%)
NET INCOME:          $3,406    (+21%)
R&D:                 $5,890    (-2%)

DRUGS APPROVED

DRUG                   INDICATION

Tagrisso               NSCLC patients with EGFR T790M mutation
Qtern                  type-2 diabetes
Siliq                  moderate-to-severe plaque psoriasis
Zavicefta              serious bacterial infections

DRUGS PENDING

DRUG                   INDICATION

ZS-9                   hyperkalaemia

DRUGS IN PHASE MB AND BEYOND

DRUG                   INDICATION

acalabrutinib          B-cell malignancy, 1st line CLL
durvalumab             s2nd-line advanced bladder cancer, stage
                       III NSCLC
durvalumab             3rd-line NSCLC, 1 st-line bladder, 2nd-line
  + tremelimumab       SCCHN, 3rd-line NSCLC, 1 st-line bladder,
                       2nd-line SCCHN
moxetumomab            hairy cell leukaemia
pasudotox
elumetinib             differentiated thyroid cancer
Epanova                severe hypertriglyceridaemia
Farxiga/Forxiga        type-2 diabetes
roxadustat             anaemia in CKD/ESRD
Bevespi Aerosphere     COPD
benralizumab           severe asthma, COPD
tralokinumab           severe asthma
anifrolumab            systemic lupus erythematosus
lanabecestat           early Alzheimer's disease

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

AZD0156                solid tumors
AZD2811                solid tumors
AZD9150                haematological malignancies
AZD9496                ER+ breast cancer
AZD4635                solid tumors
AZD6738                solid tumors
Lynparza + AZD1775     solid tumors
MEDI-565               solid tumors
MEDI-0562              solid tumors
MEDI-3726              prostate cancer
durvalumab             solid tumors
  + AZD1775
durvalumab             non-small cell lung cancer
  + Iressa
durvalumab             melanoma
  + dabrafenib
  + trametinib
durvalumab or          diffuse large B-cell lymphoma
durvalumab
  +AZD9150
tremelimumab           solid tumors
  + MEDI0562

DRUGS COMING OFF PATENT

DRUG                   INDICATION    YEAR

Onglyza                diabetes      2018
Pulmicort              asthma        2018
Nexium                 acid reflux   2018
Symbicort              asthma        2017-2029

TOP SELLING DRUGS

DRUG                INDICATION        2016 SALES    (+/-%)

Crestor             cholesterol         $3,401       -32%
Symbicort           asthma              $2,989       -12%
Nexium              acid reflux         $2,032       -19%
Pulmicort           asthma              $1,061        5%
Brilinta            antiplatelet        $839          36%
Farxiga             type 2 diabetes     $835          70%
Faslodex            breast cancer       $830          18%
Zoladex             cancer              $816          0%
Seloken/Toprol-XL   hypertention        $737          4%
Seroquel XR         anti-psychotic      $735         -28%


AstraZeneca rounded out this year's top ten pharma companies with $23 billion of revenues in 2016. While this is a 5% drop from the previous year, moving forward the company has classified several products and regions as a part of its growth platforms--Respiratory and Diabetes products, Brilinta/Brilique, and the regional sales from emerging markets and Japan. The company also added a new Oncology franchise for the first time to the growth platforms, with its new oncology products, Tagrisso and Lynparza.

Overall, the Cardiovascular and Metabolic Diseases segment is AstraZeneca's highest revenue-contributing segment, with about 38% contribution of total product sales. Revenues fell 13% to $8.1 billion in 2016 due to the decrease in its Crestor sales following patent expiry and a generic entry in the U.S. Sales of Onglyza in the U.S. declined 10% to $376 million, as the company prioritized Farxiga. A highlight for the segment was the performance of new growth products Brilinta/Brilique whose revenues rose 39% to $839 million during 2016.

The Respiratory segment's revenues fell 3% to $4.8 billion during 2016, with lower sales of Symbicort and Tudorza/ Eklira. This decrease was partially offset by increased revenues of drugs including Pulmicort, Duaklir, and Daliresp. Pulmicort sales of $1 billion were up 5%.

The Oncology segment, which as mentioned above, is now included in the growth platform, includes new products Tagrisso and Lynparza that are expected to drive this segment's growth in coming years. The segment's revenues rose 16% to $3.4 billion during 2016, following a strong performance of Tagrisso, Lynparza, Zoladex, and Faslodex. The segment's revenues were partially offset by lower sales of Iressa and legacy products such as Casodex and Arimidex. Lynparza reported sales of $218 million and was available in 31 countries by end 2016. Iressa sales of $513 million were down 6% as the company prioritized Tagrisso

The Other segment includes drugs from the Infection, Neuroscience, and Gastrointestinal franchises. This is AstraZeneca's second-largest revenue contributor, comprising 24% of the company's total product sales for 2016, which fell 19% during the year. Nexium sales of $2 billion were down 19% and Seroquel XR sales of $735 million were down 28% following loss of exclusivity.

FEEDING THE PIPELINE

During the year AstraZeneca, along with its global biologics research and development arm, MedImmune, and Moderna Therapeutics formed a new collaboration to discover, co-develop and co-commercialize messenger RNA (mRNA) therapeutic candidates for the treatment of a range of cancers. The collaboration is in addition to the agreement announced by the companies in 2013 to develop mRNA Therapeutics for the treatment of cardiovascular, metabolic and renal diseases as well as selected targets in oncology. The collaboration combines Medlmmune's protein engineering and cancer biology expertise with Moderna's mRNA platform. mRNA-based therapies are an innovative treatment approach that enables the body to produce therapeutic protein in vivo, opening up new treatment options for a wide range of diseases that, according to the company, cannot be addressed using existing technologies.

AstraZeneca and Moderna have agreed to collaborate on two specific immuno-oncology programs, based on promising preclinical data, including pharmacology in tumor models. Moderna will fund and be responsible for discovery and preclinical development of product candidates, with the aim of delivering one investigational new drug (IND) application-ready molecule for each of the two programs.

Also during the year, Allergan entered into a global agreement with AstraZeneca to develop and commercialize ATM-AVI, an investigational, fixed-dose antibiotic combining aztreonam and avibactam. The companies will evaluate the combination to treat serious infections caused by metallo [beta]lactamase MBL-producing Gram-negative pathogens, a difficult-to-treat sub-type of carbapenem-resistant Enterobacteriaceae (CRE), for which there are limited treatments. Aliergan will maintain commercialization rights in the U.S. and Canada and AstraZeneca will have commercialization rights in all other countries.

ATM-AVT is the first drug candidate to be developed under a public-private partnership agreement between AstraZeneca and the Biomedical Advanced Research and Development Authority (BARDA), a part of the U.S. Department of Health and Human Services' Office of the Assistant Secretary for Preparedness and Response (ASPR). The goal of this strategic alliance is to develop a portfolio of drug candidates over the next five years with dual uses in treating illnesses caused by bioterrorism agents and antibiotic-resistant infections.

LEO Pharma formed an agreement with AstraZeneca to acquire the global license to tralokinumab in skin diseases and the exclusive license to brodalumab in Europe. Tralokinumab, an anti-IL-13 monoclonal antibody, has completed a Phase lib study for the treatment of patients with atopic dermatitis. Brodalumab is an IL-17 receptor monoclonal antibody under regulatory review for patients with moderate-to-severe plaque psoriasis. AstraZeneca received $115 million upfront and is eligible to receive as much as $1 billion in commercial-related milestones and a percentage of royalties on sales. AstraZeneca will manufacture and supply tralokinumab to LEO Pharma and will retain all rights to tralokinumab in respiratory disease and any other indications outside of dermatology.

Eli Lilly and Co. and AstraZeneca entered a worldwide agreement to co-develop MEDI1814, an antibody selective for amyloid-beta 42 (A[beta]42) as a potential disease-modifying treatment for Alzheimer's disease. This agreement expands the collaboration related to AZD3293, a BACE inhibitor in Phase III development.

AstraZeneca and Incyte Corporation formed a collaboration to evaluate the efficacy and safety of Incyte's Janus-associated kinase 0AK) 1 inhibitor, INCB39110, in combination with AstraZeneca's next generation epidermal growth factor receptor (EGFR) inhibitor, Tagrisso (osimertinib). The combination will be assessed as a second line treatment for patients with EGFR mutation-positive non-small cell lung cancer (NSCLC), who have been treated with a first generation EGFR tyrosine kinase inhibitor (TKI) and subsequently developed the T790M resistance mutation.

11 AMGEN

Headquarters: Thousand Oaks, CA

twitter.com/Amgen

www.amgen.com
HEADCOUNT:           20,000
YEAR ESTABLISHED:      1980
REVENUES:           $22,991    (+6%)
NET INCOME:          $7,722    (+11%)
R&D:                 $3,840    (-6%)

DRUGS APPROVED/LAUNCHED

DRUG              INDICATION

Amgevita          inflammatory diseases
Parsabiv          secondary hyperparathyroidism
Enbrel            children with moderate to severe plaque
                  psoriasis
Blincyto          Ph- relapsed or refractory B-cell precursor
                  acute lymphoblastic leukemia
DRUGS PENDING

DRUG              INDICATION

Repatha           additional reduction in heart attacks,
                  strokes and coronary revascularizations
Erenumab          migraine prevention
Xvega             multiple myeloma
Blincyto          relapsed/refractory Ph+ and minimal
                  residual disease of ALL
ABP 215           biosimilar to Bevacizumab
Romosozumab       osteoporosis in postmenopausal women
                  at increased risk of fracture

DRUGS IN PHASE IIB AND BEYOND

DRUG              INDICATION

AMG 520           Alzheimer's disease
Aranesp           low risk myelodysplastic syndromes
Enbrel            psoriatic arthritis, maintaining remission of
                  rheumatoid arthritis
Erenumab          episodic and chronic migraine
Evenity           postmenopausal osteoporosis and male
                  osteoporosis
Imlygic           metastatic melanoma
Kyprolis          multiple myeloma, small-cell lung cancer
Omecamtiv         heart failure
Prolia            glucocorticoid-induced osteoporosis
Repatha           hyperlipidemia
Vectibix          wild-type KRAS exon 2 metastatic
                  colorectal cancer
Xvega             prevention of bone metastases in patients
                  with adjuvant breast cancer

EARLY RESEARCH PROJECTS

DRUG              INDICATION

AMG 176           multiple myeloma
AMG 211           cancer
AMG 224           multiple myeloma
AMG 301           migraine
AMG 330           acute myeloid leukemia
AMG 420           multiple myeloma
AMG 557           systemic lupus erythematosus
AMG 570           systemic lupus erythematosus
AMG 592           inflammatory diseases
AMG 820           cancer
AMG 986           heart failure
IMLYGIC           metastatic melanoma
Oprozomib         multiple myeloma

DRUGS COMING OFF PATENT

DRUG                INDICATION                                    YEAR

Sensipar/Mimpara    renal disease                                 2018
Enbrel              psoriasis                                     2019
Blincyto            Philadelphia chromosome-negative
                    relapsed or refractory acute lymphoblastic
                    leukemia                                      2019

TOP SELLING DRUGS

DRUG         INDICATION                2016 SALES   (+/-%)

Enbrel       rheumatoid arthritis       $5,965      11%
Neulasta     chemotherapy induced       $4,648     -1%
               neutropenia
Aranesp      chemotherapy induced       $2,093      7%
               anemia
Prolia       bone cancer                $1,635      25%
Sensipar/    renal disease              $1,415      12%
  Mimpara
Xgeva        bone cancer                $1,405      9%
Epogen       anemia                     $1,282     -31%
Neupogen     chemotherapy induced       $765       -27%
               neutropenia
Kyprolis     multiple myeloma           $692        35%
Vectibix     colorectal cancer          $611        11%
Nplate       immune thromboytopenia     $584        11%


After nearly 40 years, Amgen remains among the world's largest biopharma companies with a market cap of $114 billion. In 2016, Amgen's portfolio of top sellers boasted seven blockbuster drugs (classified as $1 billion or more in annual sales). Of these, five are still growing, Enbrel, Aranesp, Prolia, Sensipar and Xgeva. Osteoporosis drug Prolia, has shown the strongest gains (25%) over the last year. However, biosimilar competition in today's market is fierce and Amgen's products are among the prime targets.

Enbrel sales soared 11% in 2016, just shy of $6 billion, while sales of Neulasta, a treatment for chemotherapy induced neutropenia, were pretty much flat at $4.6 billion due to increased competition in this space and patent expirations. Sales of Amgen's original flagship blockbusters, Epogen and Neupogen (the industry's first victim of biosimilar competition), have fallen dramatically in recent years, down a third since 2014.

Kyprolis, Blincyto and Repatha are Amgen's fastest growing drugs but they have a way to go to compensate for the decline of core products.

Despite increased competition and patent expirations, 10 out of Amgen's 13 products grew in 2016. Not unlike many of its competitors, advancing its pipeline assets is essential to maintaining growth. Amgevita and Erenumab look to be the most promising sources of revenue for the company in the near term.

Safety issues surrounding Evenity and less than impressive Repatha results are among the company's most recent road blocks. Osteoporosis drug Evenity was close to gaining FDA approval, but a recent study showed an increased risk of heart-related side effects. It's not likely to be approved this year and its future is in question. Also, Repatha, a new cholesterol reducing drug, showed positive results in a recent study but not enough to impress investors or outstrip the competition, and as a result, it could face tougher payer reimbursement.

In the way of positive news, Amgen submitted a Biologics License Application to the FDA for its new migraine drug Erenumab, which demonstrated positive Phase III results from pivotal studies in more than 2,600 patients with episodic and chronic migraine.

Amgen and development partner, Novartis, recently expanded their collaboration for erenumab, a fully human monoclonal antibody specifically designed to target and block the Calcitonin Gene-Related Peptide (CGRP) receptor, believed to have a critical role in mediating migraine pain. The companies have agreed to combine capabilities to co-commercialize erenumab in the U.S. Amgen retains exclusive rights in Japan and Novartis gains exclusive rights in Canada, retaining its existing rights in rest of the world.

Amgevita, Amgen's biosimilar to AbbVie's $16 billion top-seller Humira, was approved by the FDA and the EU, but ongoing litigation could significantly delay launch. Amjevita is the first Humira biosimilar to be approved in the U.S.

AbbVie filed a lawsuit seeking to block Amgen from selling a copy of the arthritis medicine, and according to AbbVie, Amgen's proposed biosimilar would infringe at least 10 patents, and AbbVie has reserved the right to assert as many as 51 other patents. Unfortunately for Amgen, the trial is not expected to begin until November 2019, and Amgen is not alone in its pursuit for a Humira biosimilar. Samsung Bioepsis' Imraldi was recently recommended for approval by the EMA. The EMA also recently accepted an application for review from Sandoz, and Boehringer Ingelheim's recent Phase III study confirmed its biosimilar candidate has similar efficacy, safety and immunogenicity to Humira--just to name a few ...

Moreover, with respect to the Sandoz v. Amgen dispute, on June 12, the U.S. Supreme Court released a highly anticipated decision relating to patent disputes between the developers of new biologics and the manufacturers of "biosimilar" copies.

Sandoz received approval from the European Commission for Erelzi, its biosimilar to Amgen's Enbrel to treat inflammatory diseases such as rheumatoid arthritis, psoriasis, and psoriatic arthritis.

On one issue, Sandoz won. As a result of the court's ruling, biosimilar companies will generally be able to launch their products as soon as the data exclusivity on the innovative product expires. On the second issue, however, the outcome was a bit murky. Amgen lost the immediate dispute presented to the Supreme Court, but the litigation is not over, and there are still key questions to be resolved concerning not only federal but also state law, namely California.

With respect to innovation efforts, two early stage R&D investments aim to target cancer. Amgen and Immatics Biotechnologies entered a research collaboration and exclusive license agreement to develop next-gen T-cell engaging bispecific immunotherapies targeting multiple cancers. Amgen paid $30 million upfront and Immatics is eligible to receive more than $500 million in development, regulatory and commercial milestones, as well as royalties on sales.

Additionally, Amgen acquired global rights from Boehringer Ingelheim for BI 836908 (AMG 420), a bispecific T cell engager (BiTE) that targets B-cell maturation antigen, a potential target for multiple myeloma. The drug is currently in Phase I studies. The companies will work together on clinical development, transfer of manufacturing, and global regulatory activity.

Among assets closer to fruition, Amgen will sponsor a clinical trial collaboration and supply agreement with Janssen Biotech that will evaluate the efficacy and safety of CD38-directed immunotherapy Darzalex, in combination with Amgen's proteasome inhibitor Kyprolis and dexamethasone, to treat cancer. The first Phase III study will determine if this combination improves survival compared to Kyprolis and dexamethasone alone in multiple myeloma in patients who have received prior therapies.

Also, Amgen and Daiichi Sankyo Co. entered an exclusive agreement to commercialize nine biosimilars in Japan. The deal includes several biosimilars in late-stage development, including biosimilars of Humira, Avastin and Herceptin. Amgen is responsible for the development and manufacturing of the biosimilars and Daiichi Sankyo will file for marketing approval and be responsible for distribution and commercialization in Japan.

Despite current challenges, Amgen's strong foundation as a biologics pioneer should prevail. Near term assets and strong revenue streams for top sellers should offset any losses for flagship products--for now.

12 TEVA

Headquarters: Petach Tivka, Israel

twitter.com/tevapharm

www.tevapharm.com
HEADCOUNT:                    57,000
YEAR ESTABLISHED:               1901
REVENUES:                    $21,903    (+11%)
SPECIALTY PHARMA REVENUES:    $8,674    (+4%)
NET INCOME:                     $311    (-81%)
R&D:                          $2,111    (+38%)

DRUGS APPROVED

DRUG                      INDICATION

Vantrela ER               pain
Austedo                   Huntington's disease
ArmonAir RespiClick       asthma
AirDuo RespiClick         asthma
DRUGS PENDING

DRUG                      INDICATION

Austedo                   Tardive dyskinesia
QVAR                      asthma
Reslizumab IV             asthma
Fluticasone Propional     te asthma
Fluticasone Salmetert     3l asthma

PHASE IIB AND BEYOND

DRUG                      INDICATION

Fremanezumab              chronic migraine, cluster headache
Fasinumab                 osteoarthritis pain
Reslizumab SC             asthma
CT-P10                    biosimilar to Rituxan
CT-P6                     biosimilar to Herceptin

EARLY RESEARCH PROJECTS

DRUG                      INDICATION

Omacetaxine               acute myeloid leukemia
pridopidine               Huntington's disease
Omacetaxine               chronic myeloid leukemia
  mepesuccinate
PXVX0047                  adenoviral infection
Cisplatin and             ovarian cancer
  doxorubicin

DRUGS COMING OFF PATENT

DRUG         INDICATION   YEAR

Treanda      cancer       2019

TOP SELLING DRUGS

DRUG         INDICATION            2016 SALES   (+/-%)

Copaxone     multiple sclerosis      $4,223       5%
Treanda      cancer                  $661        -11%
ProAir       asthma                  $565         3%
Qvar         asthma                  $462         18%
Azilect      Parkinson's disease     $410         7%
Nuvigil      insomnia                $200        -46%


Headquartered in Israel, Teva is the world's largest generic medicines producer, leveraging its portfolio of more than 1,800 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has the world-leading innovative treatment for multiple sclerosis (MS) as well as late-stage development programs for other disorders of the central nervous system (CNS), including movement disorders, migraine, pain and neurodegenerative conditions, as well as a broad portfolio of respiratory products.

The Generic medicines segment includes chemical and therapeutic equivalents of originator medicines in a variety of dosage forms, such as tablets, capsules, injectables, inhalants, liquids, ointments and creams. Teva is the leading generic drug company in the U.S. and Europe. This segment includes the OTC business, conducted primarily through PGT, a consumer healthcare joint venture with P&G, as well as its active pharmaceutical ingredient (API) manufacturing business.

Specialty medicines includes Teva's core therapeutic areas of CNS medicines such as Copaxone and Azilect and respiratory medicines such as ProAir and QVAR. The specialty medicines segment also includes products in other therapeutic areas, such as Bendeka/Treanda in oncology and ParaGard in women's health.

Teva's revenues in 2016 were $21.9 billion, up from $19.6 the year before. The Generics segment makes up 55% of sales, followed by the Specialty (39%) and Other (6%) segments. In geographic terms, the U.S. accounts for the bulk of sales with a 53% share, followed by Europe (25%) and ROW markets (22%).

Of note during the year, in August, Teva completed its acquisition of Allergan's worldwide generic pharmaceuticals business, Actavis Generics. At closing, Teva paid Allergan roughly $33.4 billion. The acquisition significantly expanded its generics product portfolio and pipeline, and R&D capabilities.

As part of the Actavis acquisition, Teva divested certain products in the U.S. and Europe, to meet antitrust regulatory requirements. It sold its Actavis Generics assets and operations in the UK and Ireland to Accord Healthcare for approximately $768 million. The sale included a portfolio of generic medicines plus a manufacturing plant in Barnstaple, England.

During the year, Mayne Pharma completed its $652 million transaction with Teva and Allergan, gaining 37 approved and five filed generic pharmaceutical products. This transaction is among the largest generic pharmaceutical divestitures and followed Teva's purchase of Allergan's generic drug business.

Also, Impax Laboratories signed definitive agreements with Teva and affiliates of Allergan for the acquisition of a broad portfolio of generic products across solid oral, inhalable, injectable and topical dosage forms for $586 million. The deal also includes the return to Impax of its rights to its pending abbreviated new drug application (ANDA) for the generic equivalent to Concerta (methylphenidate hydrochloride).

In October 2016, Teva completed the acquisition of Anda Inc., the fourth largest distributor of generic pharmaceuticals in the U.S., from Allergan for $500 million.

OTHER TRANSACTIONS

During the year, Teva entered into a collaborative agreement with Regeneron Pharmaceuticals to develop and commercialize Regeneron's pain medication product, fasinumab. It paid Regeneron $250 million upfront and will share the global commercial benefits of this product, as well as ongoing associated research and development costs of approximately $1 billion, equally with Regeneron. Following the termination of the Phase II clinical study for chronic low back pain in October 2016, Teva and Regeneron planned to design a Phase III study in chronic low back pain that excludes patients with advanced osteoarthritis.

Teva and Celltrion entered into an exclusive partnership to commercialize two of Celltrion's mAb biosimilar candidates in the U.S. and Canada. CT-P10 is a proposed mAb biosimilar to Rituxan (rituximab), which is used to treat Non-Hodgkin's Lymphoma (NHL), Chronic Lymphocytic Leukemia (CLL), Rheumatoid Arthritis (RA), Wegener's Granulomatosis and Microscopic Polyangiitis (MPA). CT-P6 is a proposed mAb biosimilar to Herceptin (trastuzumab), which is used to treat HER2-overexpressing breast cancer and HER2-overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma. Rituxan and Herceptin have combined annual sales of approximately $6.5 billion in the U.S. and Canada. Teva will be responsible for all commercial activities in the U.S. and Canada, pending regulatory approvals. Celltrion has responsibility for completing all clinical development and regulatory activities. Celltrion receiveed $160 million upfront.

Teva also completed the acquisition of Representaciones e Investigaciones Medicas, S.A. de C.V. (Rimsa), a pharmaceutical manufacturing and distribution company in Mexico, for $2.3 billion. It also established a new business venture with Takeda--Teva Takeda Yakuhin Ltd.--to address the growing importance of generics in Japan.

At the end of the year, Teva entered into an agreement to sell its royalties and other rights in Ninlaro (ixazomib) to a subsidiary of Takeda, for a $150 million upfront payment, with additional consideration of up to $150 million dependent on future sales. Also, it entered into a license agreement for research, development, manufacture and commercializing of Attenukine with a subsidiary of Takeda, for a $30 million upfront payment, with additional milestone payments of up to $280 million and royalties.

TEVA, ABCELLERA EXPAND RESEARCH COLLABORATION

Follows a successful mAb discovery alliance completed between the two companies last year

Canadian biotechnology company AbCellera Biologies has entered a new therapeutic antibody discovery collaboration with Teva to discover new antibodies against membrane protein targets.

The current agreement follows a successful first collaboration completed between the two companies last year.

The deal will see AbCellera Biologies use its monoclonal antibody (mAb) screening platform to support the discovery of antibodies that modulate the function of an undisclosed membrane protein target elected by Teva Pharmaceutical.

As part of the agreement, AbCellera will receive an upfront payment and research support, in addition to milestone and royalty payments based on Teva's development and commercialization of antibodies generated under the current partnership. Further terms of the agreement have not yet been disclosed.

AbCellera founding chief executive officer Carl Hansen said, "We are excited to expand our relationship with the innovative team at Teva. This follow-on project marks an important step in establishing AbCellera's platform as an enabling technology for difficult target classes that have proven intractable by conventional antibody discovery methods."

Steffen Nockm, senior vice-president and global head, Teva Pharmaceutical Industries, said, "We are pleased to extend our work with AbCellera utilising this company's novel biologics technology. This agreement will be complementary to our existing antibody discovery process, with the potential to strengthen Teva's capabilities in novel biologics discovery."

13 LILLY

Headquarters: Indianapolis, IN

twitter.com/EliLillyCo

www.lilly.com
HEADCOUNT:           42,066
YEAR ESTABLISHED:      1876
REVENUES:           $21,222    (+6%)
NET INCOME:          $2,738    (+14%)
R&D:                 $5,244    (+9%)

DRUGS APPROVED

DRUG                      INDICATION

Synjardy                  cardiovascular outcomes
Jardiance                 reduce the risk of cardiovascular death in
                          adults with type 2 diabetes and established
                          cardiovascular disease
Lartruvo                  soft tissue sarcoma
  with doxorubicin

DRUGS PENDING

DRUG                      INDICATION

Baricitinib               rheumatoid arthritis

PHASE IIB AND BEYOND

DRUG                      INDICATION

nasal glucagon            severe hypoglycemia
LY3314814                 Alzheimer's disease
Lasmiditan                migraine
Galcanezumab              chronic and episodic migraine
Solanezumab               Alzheimer's disease
Tanezumab                 pain indications including osteoarthritis
                          pain
Abemaciclib               metastatic breast cancer, KRAS mutant
                          non small cell lung cancer
Ixekizumab                axial spondyloarthritis
Empagliflozin             chronic heart failure
Ramucirumab               first-line gastric cancer, 2nd line
                          hepatocellular carcinoma

EARLY RESEARCH PROJECTS

DRUG                      INDICATION

BAFF/IL-17                immune diseases
CXCR1/2                   immune diseases
DGAT-2 inhibitor          dyslipidemia
GIP/GLP-1                 diabetes
  Co-agonist Peptide
Insulin-Fc/Dula           diabetes
Oxyntomodulin             diabetes
AB42 Antibody             Alzheimer's disease
D1 potentiator            dementia
N3pG-AB Monoclonal        Alzheimer's disease
Antibody
Tau Antibody              Alzheimer's disease
Angiopoietin 2 MAb        cancer
CSF-1R Monoclonal         cancer
Antibody
FGFR3-ADC                 cancer
TGF[beta] RI Kinase       cancer

DRUGS COMING OFF PATENT

DRUG                      INDICATION             YEAR

Cialis                    erectile dysfunction   2017
Strattera                 ADHD                   2017
Effient                   anticoagulant          2017
Forteo                    osteoporosis           2018

TOP SELLING DRUGS

DRUG         INDICATION             2016 SALES   (+/-%)

Humalog      diabetes                 $2,769      -3%
Cialis       erectile dysfunction     $2,472       7%
Alimta       cancer                   $2,283      -8%
Forteo       osteoporosis             $1,500       11%
Humulin      diabetes                 $1,366       4%
Cymbalta     anxiety, depression      $931        -9%
Strattera    ADHD                     $855         9%
Zyprexa      schizophrenia            $725        -23%
Erbitux      head and neck cancer     $687         42%
Effient      anticoagulant            $535         2%


While Lilly dropped a spot to number 13 this year revenues were up from $19.9 billion to $21.2 billion in 2016. U.S. sales were $11.5 billion while outside the U.S. sales were $9.7 billion. The Indianapolis, IN-based company reported revenue growth across its three largest therapeutic areas. The Endocrinology segment increased 15% to $8 billion primarily driven by growth of Trulicity, Forteo, Jardiance, Trajenta, and Basaglar. Oncology grew 6% to $3.7 billion due to higher volumes for Cyramza and Erbitux, and Cardiovascular grew 5% to $3.2 billion, mostly due to higher realized price for Cialis. Revenue in Neuroscience decreased 7% to $2.7 billion as a result of lower volumes for Zyprexa and Cymbalta following patent expirations.

On the drug development front, the company reported two new molecular entities (NMEs) were approved by regulatory authorities in 2016, Ixekizumab (Taltz), a neutralizing monoclonal antibody to interleukin-17A for the treatment of moderate-to-severe plaque psoriasis and psoriatic arthritis, and Olaratumab (Lartruvo), a human lgG1 monoclonal antibody for the treatment of advanced soft tissue sarcoma.

During the year, Lilly continued its successful Alzheimer's disease collaboration with AstraZeneca. It received Fast Track designation from the FDA for the AZD3293 development program, an oral beta secretase cleaving enzyme (BACE) inhibitor currently in Phase III trials. The FDA's Fast Track program is designed to expedite the development and review of new therapies to treat serious conditions and tackle key unmet medical needs.

AZD3293 has been shown in Phase I studies to reduce levels of amyloid beta in the cerebro-spinal fluid of people with Alzheimer's and healthy volunteers. The progression of Alzheimer's disease is characterized by the accumulation of amyloid plaque in the brain. BACE is an enzyme associated with the development of amyloid beta and inhibiting BACE is expected to prevent the formation of amyloid plaque and eventually slow the progression of the disease.

AstraZeneca received a $100 million milestone payment from Lilly now that AZD3293 has moved into Phase III testing in the Amaranth study.

The two companies also announced the planned initiation of a new Phase III trial for AZD3293, named Daybreak,which will study the safety and efficacy of AZD3293 in people with mild Alzheimer's dementia.

The alliance between the two companies was formed in 2014 for the development and commercialization of AZD3293/ LY3314814. Lilly leads clinical development, working with researchers from AstraZeneca's neuroscience research and development team, while AstraZeneca is responsible for manufacturing. The companies have joint responsibility for commercialization of the molecule and will share all future costs equally for development and commercialization, as well as net global revenues post-launch.

In another Alzheimer's alliance, Lilly and AstraZeneca are codeveloping MEDI1814, an antibody selective for amyloid-beta 42 (A[beta]42), which is in Phase I development. AstraZeneca received a $30 million upfront payment from Lilly.

In another clinical trial collaboration, Lilly and Boehringer Ingelheim teamed up to battle metastatic breast cancer. The collaboration will evaluate the safety and tolerability of abemaciclib (LY2835219), Lilly's cyclin-dependent kinase (CDK) 4 and CDK 6 inhibitor, in combination with BI 836845, Boehringer's insulin-like growth factor (IGF)-1/IGF-2 ligand neutralizing antibody, in patients diagnosed with HR+, HER2- mBC. Based on the Phase lb trial results, the collaboration has the potential to expand to Phase II trials in patients with HR+, HER2- mBC and other solid tumors.

Lilly's abemaciclib is designed to block the growth of cancer cells by specifically inhibiting CDK 4 and CDK 6. In many cancers, uncontrolled cell growth arises from a loss of control in regulating the cell cycle due to increased signaling from CDK 4 and CDK 6. Boehringer's BI 836845 is an IGF ligand-neutralizing antibody that binds to both IGF-1 and IGF-2 preventing activation of the respective receptor, resulting in decreased growth-promoting signaling, which may decrease tumor growth. In a Phase lb/ II trial, BI 836845 has shown promising preliminary efficacy and good clinical safety in combination with everolimus and exemestane in patients with HR+ mBC.

The rationale for the collaboration is based upon the hypothesis that these two agents, in combination, could offer a more complete pathway interference and could potentially prolong cell cycle arrest. For HR+, HER2- mBC patients, this could translate to a reversal of resistance to hormone therapy.

Lastly, Regen BioPharma entered into an agreement with Lilly to receive compounds for drug discovery purposes and allows Regen to share structural information on compounds of mutual interest. Regen will examine 21,000 Lilly compounds in its NR2F6 high-throughput screening program to identify activators and inhibitors of this protein. NR2F6 is a molecular switch known as an "orphan nuclear receptor," which controls genes associated with the immune response as well as genes associated with the ability of cancer stem cells to propagate. Lilly has an option to negotiate a compound purchase agreement, a license agreement, or a research collaboration agreement for further research and development of material of mutual interest.

DAVE RICKS TAKES LILLY'S HELM

John Lechleiter retires as CEO

At the end of 2016 John Lechleiter retired as president and chief executive officer of Lilly, a post he held since 2008. He joined Lilly in 1979 as a senior organic chemist in process research and development. In the mid1980s he served as director of pharmaceutical product development for the Lilly Research Centre Limited in England. He later held roles in project management, regulatory affairs, product development, and pharma operations. In 2005, he was named president and chief operating officer and joined the board of directors.

Mr. Lechleiter's successor is Dave Ricks, who has served as president and chief executive officer of Lilly since January 1, 2017. He became chairman of the board of directors on June 1,2017. A 20-year Lilly veteran, Mr. Ricks served as president of Lilly Bio-Medicines from 2012 to 2016. Previously, he was president of Lilly USA, the company's largest Dave Ricks affiliate, from 2009 to 2012. He served as president and general manager of Lilly China, operating in one of the world's fastest-growing emerging markets, from 2008 to 2009. He was also general manager of Lilly Canada from 2005 to 2008, after roles as director of pharmaceutical marketing and national sales director in that country. Mr. Ricks joined Lilly in 1996 as a business development associate and held several management roles in U.S. marketing and sales before moving to Lilly Canada.

14 BRISTOL-MYERS SQUIBB

Headquarters: New York, NY

twitter.com/bmsnews

www.bms.com
HEADCOUNT:           25,000
YEAR ESTABLISHED:      1887
REVENUES:           $19,427    (+17%)
NET INCOME:          $4,457    (+185%)
R&D:                 $4,940    (-17%)

DRUGS APPROVED

DRUG                    INDICATION

Opdivo                  squamous cell cancer of the head and
                        neck, dMMR or MSI-H metastatic
                        colorectal cancer, relapsed or
                        refractory classical
                        Hodgkin lymphoma (cHL)
Orencia                 highly active and progressive disease in
                        adult patients with rheumatoid arthritis
Empliciti               multiple myeloma

DRUGS PENDING

DRUG                    INDICATION

Opdivo                  advanced or metastatic urothelial carcinoma,
                        dMMR or MSI-H metastatic colorectal
                        cancer

PHASE IIB AND BEYOND

DRUG                    INDICATION

Prostvac                oncology
Opdivo                  adjuvant melanoma , 1 st line head and
                        neck, 1 st line glioblastoma, 1 st line
                        hepatocellular carcinoma
Opdivo + Yervoy         1st line non-small cell lung cancer, 1st line
                        small cell lung cancer, 1 st line renal cell
                        carcinoma, 1st line head and neck, 1st line
                        gastric cancer
Opdivo + Empliciti      multiple myeloma
Empliciti               multiple myeloma
PROSTVAC                metastatic castration--resistant prostate
                        cancer

EARLY RESEARCH PROJECTS

DRUG                    INDICATION

Factor Xla Inhibitor    thrombosis
HSP47                   fibrosis
PEG-FGF21               fibrosis
Anti-IP10               ulcerative colitis
BTK Max                 rheumatoid arthritis
S1P1 Agonist            autoimmune diseases
TYK2 Inhibitor          autoimmune diseases
Nivolumab               immunoscience
Anti-CD73               solid tumors
Anti-GITR               solid tumors
Anti-OX40               solid tumors
Anti-TIGIT              solid tumors
Cabiralizumab           solid tumors
Glypican3-ADC           hepatocellular carcinoma
Mesothelin-ADC          solid tumors

DRUGS COMING OFF PATENT

DRUG                    INDICATION   YEAR

Reyataz                 HIV/AIDS     2017
Sustiva                 HIV/AIDS     2017

TOP SELLING DRUGS

DRUG           INDICATION               2016 SALES    (+/-%)

Opdivo         melanoma, lung             $3,774       301%
               cancer, renal cancer
Eliquis        deep vein thrombosis       $3,343       80%
               and pulmonary embolism
Orencia        rheumatoid arthritis       $2,265       20%
Sprycel        leukemia                   $1,824       13%
Hepatitis C    HCV                        $1,578      -2%
Franchise
Baraclude      hepatitis B                $1,192      -9%
Sustiva        HIV/AIDS                   $1,065      -15%
Franchise
Yervoy         oncology                   $1,053      -6%
Reyataz        HIV/AIDS                   $912        -20%
               renal cancer


Headquartered in New York City, Bristol-Myers Squibb's (BMS) sales grew 17% to $19.4 billion in 2016 from $16.5 billion the year before. Most of the revenue comes from sales in the U.S. (55%) while Europe accounts for 22% and ROW markets including Japan contributed 23 % of sales revenue.

Overall, growth was driven by strong performance in the company's Oncology segment, the largest revenue contributor in 2016, accounting for nearly 35% of the company's total revenue. This segment reported a rise of more than 62% in 2016 compared to 2015, mainly driven by Opdivo, with nearly $3.8 billion in sales, up a staggering 301%. Yervoy, Sprycel, and newly launched Empliciti to treat multiple myeloma, also contributed to growth.

The Virology segment contributed 24% of BMS's total revenue, which fell 11% to $4.7 billion in 2016, compared to $5.3 billion in 2015. With increased competition in this segment, the company reported declines for all of its products, including its Hepatitis C franchise, its hepatitis B drug Baraclude, and its HIV drugs Reyataz and Sustiva.

The Immuno-Science segment, which includes Orencia, contributed nearly 12% of the company's total revenue in 2016, driven by a 20% increase in Orencia sales to $2.3 billion compared to 2015.

The Cardiovascular segment, represented by the drug Eliquis, contributed 17% of BMS's total revenue in 2016. Eliquis sales soared 80% to $3.3 billion in 2016, compared to $1.9 billion in 2015, due to wide use and the strength of its prescription trends.

The Neuroscience segment, represented by the drug Ability, reported a drop of 83% in Abilify revenue to $128 million following competition launched during the year.

Also, the Matured Products segment and all other products showed a 17% drop in revenue to $2.1 billion due to increased competition.

In 2016, BMS received 19 approvals for new medicines and additional indications and formulations of currently marketed medicines in major markets--the U.S., EU and Japan--as well as multiple regulatory milestone achievements for Opdivo. BMS also said it encountered a significant setback in first-line lung cancer with the announcement of negative results of CheckMate-026. As a result, BMS did not pursue an accelerated regulatory pathway for the Opdivo+Yervoy combination therapy in first-line lung cancer, but BMS is still pursuing a broad program in this area encompassing combinations of Opdivo+Yervoy, Opdivo and chemotherapy, and Opdivo combined with Yervoy and chemotherapy.

ACQUISITIONS AND PARTNERSHIPS

BMS made several acquisitions and entered licensing transactions to focus resources on growth opportunities that drive the greatest long-term value. BMS is focused on the following core therapeutic areas: oncology, including IO, immunoscience, cardiovascular and fibrotic diseases. Significant transactions from 2016 are summarized below.

In December, BMS and Nitto Denko entered into an exclusive worldwide license agreement granting BMS the right to develop and commercialize Nitto Denko's investigational siRNA molecules targeting HSP47 in vitamin A containing formulations, which includes Nitto Denko's lead asset ND-L02-s0201, currently in a Phase lb study for the treatment of advanced liver fibrosis.

The agreement also grants BMS the option to receive exclusive licenses for HSP47 siRNAs in vitamin A containing formulations for the treatment of lung fibrosis and other organ fibrosis.

In July 2016, BMS acquired all of the outstanding shares of Cormorant, a private pharmaceutical company focused on the development of therapies for cancer and rare diseases. The acquisition provides BMS with full rights to Cormorant's lead candidate HuMax-IL8, a Phase I/II monoclonal antibody that represents a potentially complementary IO mechanism of action to T-cell directed antibodies and co-stimulatory molecules.

In April 2016, BMS acquired all of the outstanding shares of Padlock, a private biotechnology company dedicated to creating new medicines to treat destructive autoimmune diseases. The acquisition provides BMS with full rights to Padlock's PAD inhibitor discovery program focused on the development of potentially transformational treatment approaches for patients with rheumatoid arthritis. Padlock's PAD discovery program may have additional utility in treating systemic lupus erythematosus and other autoimmune diseases.

In February 2016, BMS and Pfizer entered into a collaboration and license agreement with Portola to develop and commercialize the investigational agent andexanet alfa in Japan. Andexanet alfa is designed to reverse the anticoagulant activity of Factor Xa inhibitors, including Eliquis. BMS and Pfizer are responsible for all development and regulatory activities for andexanet alfa in Japan and for exclusively commercializing the agent in Japan. Portola retains the rights to andexanet alfa outside of Japan and will be responsible for the manufacturing supply.

In addition to the above transactions, BMS provided notice of terminations to the California Institute for Biomedical Research pertaining to a research collaboration agreement for the development of anti-fibrotic preclinical compounds and Dual Therapeutics pertaining to a research collaboration agreement for the development of anti-cancer preclinical compounds.

BMS OPENS EXPANDED BIOLOGICS FACILITY

$280 Million Project Increases Workforce, Adds New Capabilities

In May 2016, BMS completed a major expansion at its Devens, MA biologics facility designed to accelerate development of the company's growing portfolio of biologics.

The $280 million project adds two new buildings to the 89-acre Devens campus: a Biologics Development Building for designing processes for the early production of investigational medicines, and a Clinical Manufacturing Building where investigational medicines will be produced to support clinical trials. Both are new capabilities for Devens, a site that had previously focused solely on large-scale, bulk biologics manufacturing.

The expansion increases the site's workforce, with approximately 200 new jobs having been added at the project's initial completion rising to approximately 350 jobs over time. The two new buildings also add approximately 200,000 square feet to a site now comprised of eight major buildings in a 600,000 square-foot complex. In addition, the buildings add to the major investment the company has made at Devens, a former military base. When combined with the company's initial $750 million investment to build the facility, the expansion project brings the company's total investment at the site to more than $1 billion.

15 BAYER

Headquarters: Leverkusen, Germany

twitter.com/Bayer

www.bayerpharma.com
HEADCOUNT:          115,200
YEAR ESTABLISHED:      1971
REVENUES:           $49,274    (-3%)
PHARMA REVENUES:    $17,300    (+15%)
NET INCOME:          $4,330    (-4%)
R&D:                 $2,936    (+15%)

DRUGS APPROVED

DRUG                    INDICATION

Kovaltry                hemophilia A
Xofigo                  castration-resistant prostate cancer and
                        bone metastases
Gadavist / Gadovist     contrast agent for supra-aortic or renal
                        artery disease
Kyleena                 low-dose levonorgestrel-releasing
                        intra-uterine system
Stivarga                second-line unresectable hepatocellular
                        carcinoma

DRUGS PENDING

DRUG                    INDICATION

Regorafenib             second-line treatment for unresectable
                        liver cancer
Rivaroxaban             secondary prophylaxis of acute coronary
                        syndrome

DRUGS IN PHASE IIB AND BEYOND

DRUG                    INDICATION

Amikacin Inhale         pulmonary infection
BAY 1841788             non-metastatic castration-resistant
                        prostate cancer, metastatic hormone-
                        sensitive prostate cancer
Ciprofloxacin DPI       non-cystic fibrosis bronchiectasis
Copanlisib              various forms of non-Hodgkin lymphoma
Damoctocog alfa         hemophilia A
  pegol
Finerenone              diabetic kidney disease
Radium-223 dichloride   combination treatment of castration-
                        resistant prostate cancer
Regorafenib             colon cancer, adjuvant therapy
Rivaroxaban             prevention of major adverse cardiac
                        events, anticoagulation in chronic heart
                        failure, prevention of venous
                        thromboembolism, peripheral artery disease
Tedizolid               pulmonary infection
Vericiguat              chronic heart failure

DRUGS COMING OFF PATENT

DRUG                    INDICATION             YEAR

Levitra                 erectile dysfunction   2018
Avelox                  antibiotic             2019

TOP SELLING DRUGS

DRUG                INDICATION             2016 SALES   (+/-%)

Xarelto             atrial fibrillation      $3,085       25%
Eylea               macular degeneration     $1,712       28%
Kogenate            hemophilia               $1,228      -3%
Mirena              women's health           $1,099       4%
Nexavar             oncolgy                  $917        -6%
Betaferon           multiple sclerosis       $773        -14%
Yaz                 women's health           $714        -7%
Adalat              hypertension             $657        -5%
Aspirin Cardio      cardiovascular           $567        -1%
Glucobay            diabetes                 $543        -5%


Leverkusen, Germany-based Bayer rounds out this year's top 15, jumping up four spots from number 19 on $17.3 billion in revenues, which grew from $15 billion in 2015. The Pharmaceuticals segment focuses on cardiology and women's healthcare, and on specialty therapeutics in the areas of oncology, hematology and ophthalmology.

Pharmaceuticals performed well driven by key growth products, including the cardiovascular drug Xarelto, and Eylea, for macular degeneration. Xarelto sales jumped 25% to $3 billion, due to expanded volumes in Europe and Japan, while Eylea also made substantial gains, seeing its sales rise 28% to $1.7 billion.

PHASE III AND BEYOND

In May 2016, a Phase III study investigating regorafenib (Stivarga) in unresectable liver cancer reached its primary endpoint, a statistically significant improvement of overall survival. The study investigated regorafenib in patients with hepatocellular carcinoma whose disease had further progressed during prior treatment with sorafenib (Nexavar). Based on these data, it submitted regorafenib for marketing authorization for the treatment of unresectable liver cancer in Europe, Japan and the U.S. in 3Q16.

In June 2016, Bayer agreed with Orion Corp. to expand the global clinical development program for the androgen receptor (AR) antagonist BAY-1841788 (ODM-201). A new Phase III study is evaluating BAY-1841788 in men with newly diagnosed metastatic hormone-sensitive prostate cancer (mHSPC) who are starting first-line hormone therapy.

Also in June, Bayer formed a new research partnership with the U.S. National Surgical Adjuvant Breast and Bowel Project (NSABP) for a Phase III study that will investigate regorafenib as a single agent for adjuvant treatment following completion of standard adjuvant chemotherapy in patients with advanced but not yet metastatic colon cancer.

In September 2016, a Phase III trial was initiated to evaluate vericiguat, a soluble guanylate cyclase (sGC) stimulator, in patients suffering from chronic heart failure with reduced ejection fraction. The development and commercialization of vericiguat are part of the worldwide strategic collaboration between Bayer and Merck & Co. in the field of sGC modulation.

In terms of filings and approvals during the year, in February 2016, Bayer received approval from the European Commission for Kovaltry for the treatment of hemophilia A in patients of all age groups. Kovaltry is an unmodified recombinant factor VIII product that in clinical trials has demonstrated efficacy and tolerability as an on-demand therapy and for prophylactic use two or three times per week by hemophilia A patients. In March 2016, Kovaltry was approved by the FDA and the Japanese Ministry of Health, Labour and Welfare (MHLW).

Also in March 2016, the Japanese MHLW granted marketing authorization for Xofigo for the treatment of adult patients with castration-resistant prostate cancer and bone metastases.

In May 2016, the FDA approved Gadavist/Gadovist (gadobutrol) as the first contrast agent for use with magnetic resonance angiography (MRA) to evaluate known or suspected supra-aortic or renal artery disease in patients of all ages.

Additionally, the FDA approved Bayer's new low-dose levonorgestrel-releasing intrauterine system with the brand name Kyleena. The new system releases the lowest daily hormone dose in an intrauterine system for up to five years of protection against pregnancy. Bayer also completed the corresponding decentralized registration procedure for the EU. On this basis, it is expected that the health authorities of the EU member states will grant national marketing authorizations in the coming months.

In November 2016, an expansion of indications was filed for Stivarga (regorafenib) in the U.S., Japan and Europe. The filings pertain to the second-line treatment of patients with unresectable hepatocellular carcinoma. The FDA granted priority review status to regorafenib in the registration process for the expansion of indications. The Japanese Ministry of Health, Labour and Welfare (MHLW) granted priority review status for the registration filing in January 2017.

PARTNERSHIPS

During the year, Bayer entered several partnerships to advance its drug development initiatives. Bayer and Evotec entered into a five-year, multi-target research partnership to develop multiple clinical candidates for the treatment of kidney diseases such as chronic kidney disease in diabetes patients. Both companies will contribute drug targets and a comprehensive set of high-quality technology platforms to jointly develop innovative treatment options for these severe conditions. The partners will share responsibilities during preclinical development of potential candidates.

Bayer receives exclusive access to selected candidates as well as to Evotec's CureNephron target pipeline. Bayer will be responsible for any subsequent clinical development and commercialization. Evotec will receive a minimum of 14 million [euro] over the contract period including research payments and an undisclosed license fee. In addition, Evotec is eligible to receive preclinical, clinical and sales milestones of potentially over 300 million [euro].

Back in 2012, Bayer and Evotec entered into a five-year partnership in the therapeutic area of endometriosis. Currently in its fourth year, this alliance has delivered four preclinical candidates and one first-in-class clinical program has been initiated.

Bayer and X-Chem entered an expanded global drug discovery collaboration across multiple therapeutic areas and target classes. Bayer has expanded access to X-Chem's DEX technology, which is based on DNA-encoded libraries of small molecules with more than 120 billion molecules. The collaboration aims to discover lead structures for complex drug targets in areas of high unmet medical need. X-Chem received an upfront payment, research and development funding, as well as development milestones totaling as much as $528 million. Bayer has an exclusive option to license any programs under the collaboration. X-Chem will also receive royalties and sales milestones. The companies have been working together since 2012 and Bayer has licensed two programs of small molecules from X-Chem that address complex target structures such as protein:protein interactions. The new multi-year collaboration expands the scope and duration of the partnership.

Regeneron Pharmaceuticals and Bayer will jointly develop a combination therapy of the angiopoietin2 (Ang2) antibody nesvacumab and the vascular endothelial growth factor (VEGF) trap aflibercept, for the treatment of serious eye diseases. Two separate Phase II studies are evaluating the combination therapy as a co-formulated single intravitreal injection in patients with wet age-related macular degeneration or diabetic macular edema.

Preclinical data demonstrates that angiopoietins act together with the VEGF family to promote the formation and maturation of blood and lymphatic vessels in the eye. Ang2 and VEGF together therefore have the potential to influence the pathological development of new blood vessels and the permeability of blood vessel walls in certain diseases of the eye.

Regeneron and Bayer currently collaborate on the global development and commercialization of Eylea (aflibercept) Injection and on the global development of REGN2176-3, the Platelet Derived Growth Factor Receptor Beta (PDGFR-beta) antibody rinucumab co-formulated in a single intravitreal injection with aflibercept, which is currently in Phase II trials in patients with wet age-related macular degeneration.

With the Broad Institute it formed a strategic partnership in the field of genome and drug research in cardiology aimed at using findings from human genetics to develop new cardiovascular therapies, and in the field of oncology, to identify and develop active ingredients that target tumor-specific gene alterations.

Also, with the German Cancer Research Center it formed a partnership for the development of new therapeutic options in oncology, especially in immunotherapy. It teamed up with ImmunoGen in the field of antibody-drug conjugates (ADCs) for novel tumor therapies. With Janssen Research & Development, Bayer is furthering development of Xarelto (rivaroxaban), and with MorphoSys AG, partnered on antibody-drug conjugates using MorphoSys's HuCAL technology.

16 BOEHRINGER-INGELHEIM

Headquarters: Ingelheim, Germany

twitter.com/Boehringer

www.boehringer-ingelheim.com
HEADCOUNT:           45,692
YEAR ESTABLISHED:      1817
REVENUES:           $16,699    (+3%)
NET INCOME:          $1,952    (+13%)
R&D:                 $3,279    (flat)

DRUGS APPROVED

DRUG                   INDICATION

Tiotropium Respimat    asthma maintenance treatment
Jardiance              reduce the risk of cardiovascular death in
                       type 2 diabetes

DRUGS PENDING

DRUG                   INDICATION

BI 695501              biosimilar candidate to Humira
Glyxambi               fixed dose combination, type 2 diabetes

PHASE MB AND BEYOND

DRUG                   INDICATION

Empagliflozin          heart failure
Nintedanib             lung diseases, coloretal cancer
alteplase              stroke
Idarucizumab           hemorrhage
BI 695502              colorectal neoplasms
Afatinib               NSCLC, head and neck cancer
HCP1202                COPD

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

BI 836845              castrate resistant prostate cancer
BI 655130              psoriasis
BI 836826              chronic, B-cell lymphocytic leukemia
BI 836880              solid tumors
BI 836909              multiple myeloma
BI 836858              acute myeloid leukemia
BI 690517              diabetic kidney disease

DRUGS COMING OFF PATENT

DRUG                   INDICATION               YEAR

Combivent Respimat     COPD                     2018
Spiriva                COPD                     2018
Mirapex                restless legs syndrome   2018

TOP SELLING DRUGS

DRUG        INDICATION            2016 SALES   (+/-%)

Spiriva     COPD                    $3,155     -19%
Pradaxa     atrial fibrillation     $1,459     4%
Trajenta    type 2 diabetes         $1,188     20%
Micardis    hypertension            $1,010     -3%


While Boehringer's top seller Spiriva fell faster than expected in 2016, diabetes drug Jardiance, with $460 million in sales, has the potential to surpass the company's flagship product. With its new cardiovascular label, which was approved in the U.S. at the end of last year, EvaluatePharma estimates that 2017 in-market Jardiance revenues could top $929 million, rising to $3.5 billion by 2022.

Over the course of the next few years, Jardiance prospects could be further augmented if upcoming trials succeed in chronic heart failure patients with or without diabetes. However, Jardiance will compete with other products in the SGLT2 inhibitor class. Contenders include Johnson & Johnson's Invokana, with trial results expected this year, and Astrazeneca's Farxiga.

Boehringer has not been at the forefront of the immuno-oncology revolution, but it's trying to make a mark in this field with a focus on combinations, specifically with cancer vaccines. Its strategy hinges on developing its anti-PD-1 antibody, BI 754091, which is only in Phase I development. The company plans to pair BI 754091 with various cancer vaccine approaches, including those using peptides, RNA and vectors, the most advanced of which are currently in clinical development.

The company also expanded its immuo-oncology efforts via an alliance with ViraTherapeutics to jointly develop a next-gen oncolytic virus therapy platform and to investigate ViraTherapeutic's lead candidate VSV-GP alone and with other therapies.

Boehringer's biosimilar endeavors include both early and late stage assets. Following postive results from the Phase III VOLTAIRE-RA study of its adalimumab biosimilar candidate BI 695501, the company is seeking regulatory approval from the FDA and EMA. Also, in a Phase I study, its bevacizumab biosimilar candidate has demonstrated bioequivalence to Avastin, an angiogenesis inhibitor that is used to treat a variety of cancers.

In the way of investments, the company established a digital lab as an independent subsidiary focused on digital solutions in healthcare, and opened a commercial production site for biopharmaceuticals in China. With the founding of BI X, Boehringer will develop prototypes for new products and solutions and test them with the company's business units in pilot phases to help ensure that data accrued at BI X are being quickly integrated into the digital lab's parent house.

Additionally, as part of the company's efforts to grow its contract development and manufacturing of mAbs and recombinant proteins in China, the company recently opened a commercial production site in Shanghai. With an initial investment of more than 70 million [euro], the site represents the first biopharma facility established by a leading, multinational biopharma manufacturer in China utilizing mammalian cell culture technology.

17 NOVO NORDISK

Headquarters: Bagsvaerd, Denmark

twitter.com/novonordisk

www.novonordisk.com
HEADCOUNT:           42,446
YEAR ESTABLISHED:      1989
REVENUES:           $15,841    (flat)
NET INCOME:          $5,375    (+5%)
R&D:                 $2,064    (+4%)

DRUGS APPROVED

DRUG                      INDICATION

Xultophy                  diabetes
Rebinyn                   haemophilia B
Fiasp                     diabetes

DRUGS PENDING

DRUG                      INDICATION

Semaglutide               type 2 diabetes

PHASE IIB AND BEYOND

DRUG                      INDICATION

Oral semaglutide          type 2 diabetes
N8-GP                     haemophilia A
Somapacitan               growth disorder

EARLY RESEARCH PROJECTS

DRUG                      INDICATION

LAI287                    type 1 and 2 diabetes
PI406                     type 1 and 2 diabetes
PYY 1562                  type 2 diabetes, obesity
AM833                     obesity
GG-co-agonist 1177        obesity
FGF21                     obesity
Tri-agonist 1706          obesity
Concizumab                haemophilia A and B
Subcutaneous N8-GP        haemophilia A and B

DRUGS COMING OFF PATENT

DRUG                      INDICATION   YEAR

Levemir                   diabetes     2019

TOP SELLING DRUGS

DRUG              INDICATION       2016 SALES   (+/-%)

Victoza           diabetes           $2,841      8%
NovoRapid         diabetes           $2,827     -7%
Levemir           diabetes           $2,421     -10%
Human insulins    diabetes           $1,572     -4%
NovoMix           diabetes           $1,485     -9%
Norditropin       HGH deficiency     $1,243      9%


As the prevalence of diabetes has grown in the U.S. and around the world, so too has the demand for effective treatments. In response, Novo Nordisk, the Denmark-based diabetes giant, made two major expansion announcements in 2016. First, in April, it unveiled plans to invest more than $110 million in production facilities at its site in Chartres, France, in an effort to meet the increasing worldwide demand for its diabetes medicines.

The new facilities will be built on Novo Nordisk's existing 31,000 square-meter site in Chartres, which produces a range of the company's insulin products as well as FlexPen, the world's most widely used insulin injection device. The products are exported to more than 40 countries all over the world.

Novo Nordisk has invested nearly $350 million in France over the past 15 years and today employs 1,100 employees at the site. The planned expansion is estimated to create around 250 new jobs once the facilities are fully operational within three to four years.

Also, in March, the company began construction of a new mega $1.8 billion production facility in Clayton, NC, that will produce active pharmaceutical ingredients (API) for a range of the company's current and future GLP-1 and insulin products. When fully operational in 2020, the site will take on production capacity for diabetes care products in the U.S. Once complete, the new facility will measure 833,000 square feet and have a footprint of 417,639 square feet--the equivalent to approximately seven football fields.

The new site is situated adjacent to Novo Nordisk's current 457,000 square foot facility. Expanded several times since it was inaugurated in 1996, Novo Nordisk's current plant in Clayton is one of the company's strategic production sites responsible for formulation, filling and packaging of diabetes medicines. The plant also assembles and packages the company's FlexPen and FlexTouch prefilled insulin devices for the U.S. market.

Once the new site becomes operational, the diabetes API production organization in Clayton will be named DAPI-US (Diabetes Active Pharmaceutical Ingredients-US). It will be part of the Danish diabetes API production organization in Kalundborg, which will be named DAPI-Denmark.

Back in August 2015, Novo Nordisk laid out plans to invest $2 billion into production facilities in Clayton; Malov, Denmark; and Kalundborg, Denmark, with $1.8 billion of this amount being invested in the Clayton plant. That same day, the company announced a decision to initiate Phase III development of oral semaglutide, a GLP-1 analogue formulated as a once-daily tablet for the treatment of type 2 diabetes.

18 MERCK KGAA

Headquarters: Darmstadt, Germany

twitter.com/emdserono

www.merck.de
HEADCOUNT:           50,000
YEAR ESTABLISHED:      1668
REVENUES:           $15,828    (+13%)
NET INCOME:          $1,716    (+41%)
R&D:                 $2,081    (+11%)

DRUGS APPROVED

DRUG                   INDICATION

Bavencio               bladder cancer, metastatic merkel cell
                       carcinoma

DRUGS PENDING

DRUG                   INDICATION

Cladribine tablets     relapsing-remitting multiple sclerosis
Avelumab               metastatic urothelial carcinoma

PHASE IIB AND BEYOND

DRUG                   INDICATION

Avelumab               non-small cell lung cancer, 1 st, 2nd line,
                       gastric cancer, 1 st, 3rd line, ovarian
                       cancer, renal cell cancer, locally advanced
                       head and neck cancer
MSB 11022              chronic plaque psoriasis, biosimilar
                       to adalimumab

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

M2698                  solid tumors
M3814                  solid tumors
Avelumab               hematological malignancies
M2951                  systemic lupus erythematosus
M1095                  psoriasis

TOP SELLING DRUGS

DRUG          INDICATION               2016 SALES   (+/-%)

Rebif         multiple sclerosis         $1,834      -7%
Erbitux       oncology                    $927       -6%
Gonal-f       fertility                   $793        6%
Concor        cardiovascular disease      $454       -10%
Glucophage    type 2 diabetes             $409       -14%
Euthyrox      hormone therapy             $350        3%


In Merck KGaA's Healthcare division, it discovers, develops and manufactures prescription medicines used to treat cancer, multiple sclerosis, and infertility, among other things, as well as over-the-counter pharmaceutical products for colds and pain.

The Healthcare business sector comprises four businesses: Biopharma, Consumer Health, Biosimilars, and Allergopharma. In 2016, Healthcare generated 45% of group sales, or $15.8 billion. Europe and North America generated 60% of Healthcare's sales in 2016, while in recent years the company has steadily expanded its presence in growth markets. In 2016, Asia-Pacific and Latin America accounted for 33% of sales.

Biopharma is the largest of the Healthcare businesses and operates in four franchises. During the year, new data on Rebif, Biopharma's top-selling drug and leading multiple sclerosis (MS) therapy were presented at both the American Academy of Neurology's (AAN) Annual Meeting in April 2016 and the Congress of the European Academy of Neurology (EAN) in May 2016.

In June 2016, the company reached a major regulatory milestone with the submission for registration of cladribine tablets to the European Medicines Agency (EMA). The company says that cladribine tablets, if approved, could lead to high and sustained efficacy through selective modulation of B and T cells resulting in lasting resolution of inflammation.

Erbitux (cetuximab) remains the second best-selling drug in the portfolio of the Biopharma business and is the company's flagship product in oncology. In April 2016 Merck reached a major milestone regarding its expansion in growth markets with the positive results of the pivotal Chinese Phase III TAILOR study.

Also, through a strategic alliance with Pfizer, the company continued to make progress in the development and envisaged commercialization of avelumab, an investigational fully human anti-programmed death-ligand 1 (PD-L1) antibody.

The positive results from JAVELIN Merkel 200, the pivotal Phase II study in patients with metastatic Merkel cell carcinoma (MCC) treated with avelumab in second or subsequent lines of therapy, were presented at the American Society of Clinical Oncology (ASCO) 2016 annual meeting.

In terms of facility expansions, Merck KGaA continued to invest in its manufacturing network across the globe. In 2016, it completed the construction of a new facility in Nantong, China and expanded a plant in Rio de Janeiro, Brazil, as well.

The company also unveiled plans to invest more than 50 million [euro] in a new packaging center of excellence at its pharmaceutical manufacturing site in Darmstadt while also completing the expansion of its plant in Tres Cantos, Spain. In Aubonne, Switzerland, it pushed forward with the construction of a new packaging center there as well.

In the U.S., the company revealed plans for a new $115 million hub in Burlington, MA, that will serve as a major center of operations for the North American Life Science business. The new campus will also house an M Lab Collaboration Center.

19 TAKEDA

Headquarters: Osaka, Japan

twitter.com/TakedaPharmaDe

www.takeda.com
HEADCOUNT:           29,900
YEAR ESTABLISHED:      1781
REVENUES:           $15,565    (-3%)
NET INCOME:          $1,038    (+40%)
R&D:                 $2,806    (-9%)

DRUGS APPROVED

DRUG                      INDICATION

Alunbrig                  ALK+ metastatic non-small cell lung cancer
Ninlaro                   relapsed/refractory multiple myeloma
Adcetris                  consolidation treatment in post-transplant
                          Hodgkin lymphoma

DRUGS PENDING

DRUG                      INDICATION

Entyvio                   PSC, GvHD, IO colitis
Takecab                   PPI partial responder
Rasagiline                Parkinson's
Cabozantinib              solid tumors

PHASE MB AND BEYOND

DRUG                      INDICATION

CX601                     perianal fistulas in CD
AD-4833                   delay of MCI
TAK-003                   Dengue vaccine
Relugolix                 uterine fibroids, endometriosis, prostate
                          cancer

EARLY RESEARCH PROJECTS

DRUG                      INDICATION

TAK-202                   solid tumors
TAK-659                   hematologic malignancies
TAK-788                   NSCLC
TAK-831                   schizophrenia, ataxia
TAK-935                   epilepsy
TAK-079                   rheumatoid arthritis

DRUGS COMING OFF PATENT

DRUG                      INDICATION        YEAR

Actoplus MET XR           type 2 diabetes   2018
Prevacid                  GERD              2018

TOP SELLING DRUGS

DRUG            INDICATION                2016 SALES   (+/-%)

Entyvio         ulcerative colitis,         $1,287       66%
                Crohn's disease
Velcade         multiple myeloma            $1,237      -15%
Leuprorelin     prostate cancer, breast     $1,026      -8%
                cancer, endometriosis
Pantoprazole    peptic ulcer                $667        -26%
Azilva          hypertension                $601         13%
Dexilant        acid reflux                 $563        -16%
Alogliptin      diabetes                    $441         0%
Uloric          gout and hyperuricemia      $379        -1%
Colcrys         gout                        $350        -16%
Takecab         Acid-related diseases       $306         307%


In the U.S. Takeda launched a new strategy in 2016. The goal is to refocus efforts based on recent product launches in inflammatory bowel disease (IBD) and major depressive disorder (MDD), including the creation of business units to support efforts in these areas. As part of this strategy, Takeda transferred the rights to develop and commercialize Contrave (naltrexone HCl/bupropion HCl) in the U.S. back to Orexigen, allowing the company to focus resources in areas such as MDD, IBD, gout and diabetes.

Following the launch of Entyvio (vedolizumab) in the U.S., Takeda created a dedicated Specialty business unit and acquired a U.S.-based biologics manufacturing facility for the manufacture of Entyvio and other biologics. Takeda also created a General Medicine business unit to support operations and marketing of the company's medicines in the areas of central nervous system (CNS), gastroenterology, gout and diabetes.

The new U.S. strategy and reorganization comes under the leadership of Takeda president Ramona Sequeira, who was appointed president in June 2015.

In its home base of Japan, Takeda formed a new business venture with Teva called Teva Takeda Yakuhin Ltd. Mr. Hiroshi Matsumori has been appointed chief executive officer and president of Teva Pharma Japan Inc. Takeda, an R&D driven pharma company, and Teva, a global generics company, will work to meet the needs of patients and growing importance of generics in Japan through the provision of off-patent drugs.

On the R&D front, Takeda unveiled plans for a new 100 million [euro] manufacturing plant in Singen, Germany, to support its global vaccine strategy and Phase III dengue vaccine candidate. In September, Takeda initiated the Tetravalent Immunization against Dengue Efficacy Study (TIDES), a Phase III double-blind, randomized, placebo-controlled trial, evaluating the efficacy of the vaccine candidate to protect against dengue fever. The study is also evaluating vaccine safety and immunogenicity with two doses of the vaccine candidate or placebo.

20 ALLERGAN

Headquarters: Dublin, Ireland

twitter.com/Allergan

www.allergan.com
HEADCOUNT:            16,700
YEAR ESTABLISHED:       2015
REVENUES:            $14,571     (+15%)
NET INCOME:          $14,695    (+275%) *
R&D:                  $2,576      (+9%)

* includes income from discontinued operations

DRUGS APPROVED

DRUG                    INDICATION

Juvederm Volbella XC    moderate to severe facial
                        wrinkles and folds
Avycaz                  complicated urinary tract infections
Linzess                 chronic idiopathic constipation
Rhofade                 persistent facial erythema
DRUGS PENDING

DRUG                    INDICATION

Vraylar                 maintenance treatment of schizophrenia
PHASE IIB AND BEYOND

DRUG                    INDICATION

Brazikumab              moderate-to-severe Crohn's disease
ulipristal acetate      uterine fibroids
Linaclotide             abdominal pain in non-constipation
                        sub-types of IBS
AGN-195263              dry eye syndromes
Ubrogepant              migraine, with or without aura

EARLY RESEARCH PROJECTS

DRUG                    INDICATION

Abicipar pegol          macular degeneration

DRUGS COMING OFF PATENT

DRUG                    INDICATION        YEAR

Pylera                  stomach ulcers    2018
Delzicol                Crohn's disease   2020

TOP SELLING DRUGS

DRUG                INDICATION                 2016 SALES   (+/-%)

Restasis            dry eye                      $1,488      42%
Botox               chronic migraine,            $1,189      44%
Therapeutics        overactive bladder
Linzess/Constella   irritable bowel syndrome     $643        40%
Bystolic            hypertension                 $641       -1%
Namenda XR          Alzheimer's disease          $628       -17%
Alphagan/           glaucoma,                    $546        33%
Combigan            ocular hypertension
Asacol/Delzicol     ulcerative colitis           $415       -30%
Lo Loestrin         contraception                $404        15%
Lumigan             ocular hypertension          $326        25%


After selling off its generics business to Teva last year for roughly $40 billion, Allergan was active on the acquisition front in 2016, picking up a handful of biotechs to bolster its pipeline. In April it acquired Topokine Therapeutics, a clinical-stage biotech focused on topical medicines for fat reduction, for $85 million upfront, gaining XAF5, a topical agent in late-stage development for the treatment of steatoblepharon (undereye bags).

In September it inked a deal to buy Vitae Pharmaceutical for $639 million, strengthening its dermatology pipeline with the addition of VTP-43742, a Phase II orally active ROR[gamma]t (retinoic acid receptor-related orphan receptor gamma) inhibitor for the potential treatment of psoriasis and other autoimmune disorders.

In the same month, Allergan bought Tobira Pharmaceuticals, a clinical-stage biopharma company developing therapies for nonalcoholic steatohepatitis (NASH) and other liver disease, for up to $1.7 billion if certain milestones are met. The acquisition adds Cenicriviroc (CVC) and Evogliptin, two development programs for the treatment of the multi-factorial elements of NASH, including inflammation, metabolic syndromes and fibrosis.

In November Allergan paid $125 million for Chase Pharmaceuticals Corp., another clinical-stage biotech developing treatments for neurodegenerative disorders including Alzheimer's disease (AD). The deal expands Allergans central nervous system (CNS) pipeline with a Phase III-ready AD candidate--Chase's lead compound, CPC-201, and certain backup compounds.

During the year Allergan entered several licensing agreements. One was with MedImmune, AstraZeneca's global biologics R&D arm, for the global rights to MEDI2070, an anti-IL-23 monoclonal antibody currently in Phase II development for the treatment of moderate-to-severe Crohn's disease and ulcerative colitis and other related conditions. Allergan paid $250 million upfront with potential payments of as much as $1.3 billion in milestones.

With Adamis Pharmaceuticals, Allergan entered into a licensing agreement with through its wholly owned subsidiary, Watson Laboratories, to commercialize Adamis'Epinephrine Pre-filled Syringe (PFS) product candidate for the emergency treatment of anaphylaxis. Watson obtains commercial rights for the U.S. in exchange for an upfront fee and potential regulatory and performance based milestones totaling up to $32.5 million. Additionally, Watson will pay royalties based on future sales of the PFS in the U.S.

In emerging markets, Allergan, again through Watson Labs, inked a $106 million generic oncology deal with China's CSPC Pharmaceutical Group relating to the product technology licensing and commercialization of an oncology drug in the global market.

21 BIOGEN

Headquarters: Cambridge, MA

twitter.com/biogenidec

www.biogenidec.com
HEADCOUNT:            7,400
YEAR ESTABLISHED:      2003
REVENUES:           $11,449    (+6%)
NET INCOME:          $3,703    (+4%)
R&D:                 $1,973    (-2%)

DRUGS APPROVED

DRUG             INDICATION

Spinraza         spinal muscular atrophy
Fampyra          improvement of walking in MS
Flixabi          infliximab biosimilar to Remicade

DRUGS IN PHASE IIB AND BEYOND

DRUG             INDICATION

Aducanumab       Alzheimer's disease
E2609            Alzheimer's disease
Obinutuzumab     non-Hodgkin's lymphoma

EARLY RESEARCH PROJECTS

DRUG             INDICATION

BIIB054          Parkinson's disease
BIIB067          SOD-1-amyotrophic lateral sclerosis

DRUGS COMING OFF PATENT

DRUG             INDICATION           YEAR

Tysabri          multiple sclerosis   2017-2020
Tecfidera        multiple sclerosis   2018

TOP SELLING DRUGS

DRUG         INDICATION           2016 SALES   (+/-%)

Tecfidera    multiple sclerosis     $3,968       9%
Avonex       multiple sclerosis     $2,314      -12%
Tysabri      multiple sclerosis     $1,964       4%
Eloctate     hemophilia              $513       61%
Plegridy     multiple sclerosis      $482       42%


Coming off a year that ended well for Biogen, rumors of a merger with Sanofi arose following the appointment Michel Vounatsos as its new chief executive officer on December 19, and the approval of Spinraza, a potential blockbuster to treat spinal muscular atrophy, on December 23. A Sanofi-Biogen deal would create a 60% stronghold in the oral MS market.

Spinraza, which was developed by Ionis Pharmaceuticals and licensed by Biogen, was approved under Priority Review by the FDA and is the first treatment for spinal muscular atrophy in pediatric and adult patients. Analysts estimate that Spinraza could generate revenues of as much as $428 million in 2017, with sales potentially reaching $2 billion by 2020.

Also in December, Biogen presented positive data from the Phase lb PRIME study, showing its investigational drug aducanumab slows cognitive decline in patients in the early stages of Alzheimer's disease, while reducing the amyloid plaque levels compared to the placebo group.

Aducanumab is currently being evaluated in two global Phase III studies, ENGAGE and EMERGE, which are designed to evaluate its safety and efficacy in slowing cognitive impairment and the progression of disability in early AD. The success of this drug would add billions in annual sales to Biogen's top line, but that's counting chickens before they hatch.

Moreover, Biogen recently paid Bristol Myers-Squibb $300 million upfront, plus as much as $410 million for milestones and potential royalties, for BMS-986168, a Phase II-ready antibody targeting extracellular tau, the protein that forms the deposits in the brain associated with Alzheimer's Disease and other neurodegenerative tauopathies such as Progressive Supranuclear Palsy. Biogen plans to rapidly initiate Phase II studies for BMS-986168 in both indications.

In another asset acquisition, Biogen acquired Remedy Pharmaceuticals' Phase III candidate, CIRARA for the potential treatment of large hemispheric infarction, a severe form of ischemic stroke where brain swelling often leads to stroke-related morbidity and mortality. The FDA recently granted CIRARA Orphan Drug status, along with Fast Track designation.

Meanwhile, in the multiple sclerosis space, revenue from Biogen's top-selling drug, Tecfidera, reached nearly $4.0 billion, up 9%. Even though there was a slight softening in overall market, particularly in the U.S., the European market continues to grow, albeit at a slower pace.

Equally significant, Fampyra was granted marketing authorization in the EU. As the first treatment to address both the unmet need of walking improvement in MS, as well as clinical efficacy in MS, it has potential to substantially impact this market. Biogen has a license from Acorda Therapeutics for rights in all markets outside the U.S.

In the way of strategic business ventures, Bioverativ, the spinoff of Biogen's global hemophilia business, began trading January 2017. Sales of its hemophilia drugs, Eloctate and Alprolix generated combined revenues of $847 million in 2016, up 53%.

Biogen's pipeline aims to address some of the greatest challenges in medicine, including Alzheimer's disease, Parkinson's, and ALS, let's hope they succeed. We'll have to see about Biogen becoming a potential takeover target.

22 SHIRE

Headquarters: Lexington, MA

twitter.com/shireplc

www.shire.com
HEADCOUNT:           23,906
YEAR ESTABLISHED:      1986
REVENUES:           $11,397    (+78%)
NET INCOME:            $327    (-75%)
R&D:                 $1,440     (-8%)

DRUGS APPROVED

DRUG                   INDICATION

Cuvitru                primary immunodeficiency
Xiidra                 dry eye disease
Glassia                emphysema due to severe AAT deficiency
Intuniv                ADHD
Ady novate             hemophilia A children and surgical settings
ONIVYDE with 5-FU      metastatic adenocarcinoma of the pancreas
  and leucovorin

DRUGS PENDING

DRUG                   INDICATION

Natpar                 hypoparathroidism
SHP465                 ADHD

DRUGS IN PHASE IIB AND BEYOND

DRUG                   INDICATION

Glassia                acute graft vs. host disease
Calaspargase pegol     acute lymphoblastic leukemia
Cinryze                antibody mediated rejection
Gattex                 short bowel syndrome
SHP555                 chronic constipation
SHP620                 cytomegalovirus infection
Vonvendi               Von Willebrand disease

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

SHP611                 MLD
SHP622                 Friedreich's ataxia
SHP 623                neuromyelitis optica
SHP631                 neurocognitive decline associated with
                       Hunter syndrome
SHP655                 hereditary thrombotic thrombocytopenic
                       purpura
SHP656                 hemophilia A

TOP SELLING DRUGS

DRUG              INDICATION              2016 SALES   (+/-%)

Vyvanse           ADHD                      $2,014      17%
Hemophilia        hematology                $1,789      n/a
Immunoglobulin    immunology                $1,144      n/a
  Therapies
Lialda            ulcerative colitis        $792        16%
Cinryze           hereditary angioedema     $680        10%
Elaprase          Hunter syndrome           $589        7%


At the beginning of 2016, Irish drug maker Shire catapulted itself into the top 25 companies after it bought American pharma firm Baxalta. The $32 billion mega-deal creates a global biotech projected to generate over $20 billion in annual revenues by 2020.

The combination of the two pharmaceutical giants creates a world leader in rare diseases, a platform for which Shire will now have leading products in each of the following growing, multi-billion-dollar therapeutic areas: hematology; immunology; neuroscience; lysosomal storage diseases; gastrointestinal/endocrine; and hereditary angioedema (HAE).

The combined company will also have a growing franchise in oncology, with approved products and innovative compounds in development, as well as a robust late-stage ophthalmics pipeline.

Altogether, there will be more than 60 programs in development, including over 50 that will address rare diseases, and the newly-approved Baxalta products Adynovate,Vonvendi and Obizur. Shire anticipates more than 30 recent and planned product launches from the combined pipeline, contributing approximately $5 billion in annual revenues by 2020.

On the heels of the deal, towards the end of the year, Shire unveiled plans to expand its operations in Cambridge, MA, establishing a rare disease innovation hub and increasing its footprint in Kendall Square, leasing a 343,000-sq.-ft. building with occupancy anticipated for the first quarter of 2019.

Shire will create a cross-disciplinary campus with teams spanning research, clinical development, medical affairs, business development, and other related functions. It will retain its current office, lab, and manufacturing space in Mass., including its presence in Lexington, where it's been located since 2007. Shire currently employs more than 3,000 people in the state and as part of its growth in Kendall Square, Shire is undertaking a strategic review to identify which specific functions will be located there over time and plans to add nearly 400 positions.

At the tail end of the year, Shire U.S. Manufacturing entered into a multi-year supply agreement for an undisclosed product with AMRI. The product has been in AMRI's portfolio through the required stages of development. This is the second such multi-year agreement between AMRI and Shire, as AMRI has also been supplying a neuroscience product to Shire.

23 CELGENE

Headquarters: Summit, NJ

twitter.com/celgene

www.celgene.com
HEADCOUNT:            7,000
YEAR ESTABLISHED:      1986
REVENUES:           $11,229    (+21%)
NET INCOME:          $1,999    (+25%)
R&D:                 $4,470    (+21%)

DRUGS APPROVED

DRUG              INDICATION

Revlimid          monotherapy for the maintenance treatment
                  of multiple myeloma, multiple myeloma
                  in hematopoietic stem cell transplant,
                  relapsed/refractory mantle cell lymphoma

DRUGS PENDING

DRUG              INDICATION

Enasidenib        acute myeloid leukemia

DRUGS IN PHASE IIB AND BEYOND

DRUG              INDICATION

CC-486            myelodysplastic syndrome
Luspatercept      myelodysplastic syndrome, beta-thalassemia
Revlimid          follicular lymphoma: first-line, indolent
                  lymphoma: relapsed/refractory
Otezla            ankylosing spondylitis
Ozanimod          relapsing multiple sclerosis, ulcerative
                  colitis
Mongersen         Crohn's disease

EARLY RESEARCH PROJECTS

DRUG              INDICATION

durvalumab        multiple myeloma, acute myeloid leukemia
CC-122            multiple myeloma, relapsed/refractory
                  lymphoma, chronic lymphocytic leukemia
CC-90002          myelodysplastic syndrome, acute myeloid
                  leukemia, solid tumors
AG-881            acute myeloid leukemia
CC-90009          acute myeloid leukemia
romidepsin        diffuse large B-cell lymphoma
CC-90001          fibrosis
CC-90006          autoimmune disorders
PNK-007           multiple myeloma cell therapy

TOP SELLING DRUGS

DRUG        INDICATION                 2016 SALES   (+/-%)

Revlimid    multiple myeloma,            $6,974      20%
              mantle cell lymphoma
Pomalyst    multiple myeloma             $1,311      33%
Otezla      psoriasis                    $1,017      116%
Abraxane    breast, lung,                $973        1%
              pancreatic cancer
Vidaza      myelodysplastic syndrome     $608        3%


Coming off a successful 2016, results for 1Q17 were equally impressive, with revenues up 18% to nearly $3.0 billion. Celgene's three top-selling drugs, Revlimid, Pomalyst and Otezla, climbed 20%, 33%, and 24%, respectively. The new year also began with positive Phase II data of ozanimod in Crohn's disease and Phase III trials planned by year-end. Ozanimod, an immunomodulatory drug, is also in Phase III trials in relapsing multiple sclerosis (RMS), which met the primary endpoint in reducing relapse rate compared to weekly interferon (Avonex), and demonstrated significant reductions in brain atrophy compared to Avonex. An NDA to the FDA, based on the trials for RMS, is expected by the end of this year.

In other R&D news, Celgene's NDA for enasidenib in relapsed or refractory acute myeloid leukemia (AML) with an isocitrate dehydrogenase 2 (IDH2) mutation was granted Priority Review and given a Prescription Drug User Fee Act (PDUFA) action date of Aug. 30,2017. Also, the FDA approved an expanded indication for Revlimid as a maintenance treatment for multiple myeloma following autologous hematopoietic stem cell transplant, making it the first and only treatment to receive FDA approval for maintenance following auto-HSCT.

When it comes to alliances, Celgene is known for its costly pursuit of drug development partnerships, which has thus far led to a diverse pipeline appealing assets. At the start of this year, Celgene acquired Delinia, Inc. for $300 million upfront and as much as additional $475 million, expanding its pipeline of potential next-gen medicines for autoimmune disorders. The transaction expands Celgene's inflammation and immunology pipeline with Delinia's lead program, DEL106, as well as related programs with potential to treat systemic lupus erythematosus and rheumatoid arthritis.

Entering the immunotherapy race, a global immuno-oncology alliance with BeiGene aims to advance a PD-1 inhibitor program for solid tumor cancers. This set Celgene back $263 million and a $150 million equity investment. The deal complements Celgene's partnership with AstraZeneca to develop durvalumab in hematological malignancies and expand its presence in China's cancer market.

Other recent deals include a TriNKET platform pact with Dragonfly to develop natural killer cell-based immunotherapies. Celgene has the exclusive option to license as many as four candidates with potential to treat acute myeloid leukemia, multiple myeloma, and additional hematological malignancies.

24 MYLAN

Headquarters: Canonsburg, PA

twitter.com/MylanNews

www.mylan.com
HEADCOUNT             35,000
YEAR ESTABLISHED        1970
REVENUES:            $11,077    (+18%)
SPECIALTY SEGMENT:    $5,630    (+10%)
NET INCOME:             $480    (-43%)
R&D:                    $827    (+23%)


Dey, Mylan's specialty business, focuses on respiratory, allergy and psychiatric therapies. Its flagship product is EpiPen Auto-Injector, which treats anaphylaxis; the product is the most prescribed autoinjector with over 90% market share in the U.S. and worldwide.
DRUGS PENDING

DRUG                   INDICATION

proposed biosimilar    neutropenia
  of pegfilgrastim
proposed biosimilar    breast cancer
  of trastuzumab
insulin glargine       type 2 diabetes

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

proposed biosimilar    rheumatoid arthritis
  to abatacept

DRUGS IN PHASE IIB AND BEYOND

DRUG                   INDICATION

revefenacin            chronic obstructive pulmonary disease


During 2016 the generic giant Mylan made two major acquisitions. First it boosted its over-the-counter (OTC) portfolio when it paid nearly $10 billion for Swedish drug maker Meda, adding a range of branded and generic pharmaceuticals. Meda's key products include the allergy therapy Dymista (azelastine/fluticasone) and Elidel (pimecrolimus) for dermatitis and eczema. The deal reduces Mylan's reliance on generic drugs with the addition of specialty brands that are less prone to pricing pressure and competition.

In another deal worth $1 billion, Mylan bought the non-sterile, topicals-focused specialty and generics business of Renaissance Acquisition Holdings, which nets Mylan a complementary portfolio of approximately 25 branded and generic topical products, a pipeline of approximately 25 products, and an established U.S. sales and marketing infrastructure targeting dermatologists. The business also brings Mylan an integrated manufacturing and development platform and a topicals-focused contract development and manufacturing organization.

The dermatology/topicals space has long been an area of focus for Mylan and one that it has targeted for expansion. Renaissance had approximately $370 million in 2015 revenues and has approximately 1,200 employees. The business's commercial segment has a diversified portfolio of specialty brands and generic products in the dermatology space, as well as a pipeline of complex topical generics and brands in active development. Also, the acquisition includes two manufacturing sites with capabilities and capacity in creams, ointments, aerosols/foams, gels, suspensions, liquids and suppositories.

Mylan was also active on the biosimilar front during the year. In a deal worth up to $250 million, it entered into an exclusive global collaboration agreement with Momenta Pharmaceuticals to develop and commercialize six of Momenta's biosimilar candidates, including abatacept--Bristol-Myers Squibb's rheumatoid arthritis drug Orencia. The companies are jointly responsible for product development, and Mylan will lead worldwide commercialization. The collaboration builds on Mylan's existing biologics and insulin analog partnership with Biocon, which includes six biosimilar programs (trastuzumab, pegfilgrastim, adalimumab, bevacizumab, etanercept and filgrastim) and three insulin analogs (glargine, lispro and aspart). Five of these biosimilar programs have successfully completed Phase I trials, and four are in Phase III development. Mylan and Biocon submitted three biosimilar applications and one insulin application in the U.S. and EU in 2016.

On the new product front, Mylan made several generic advances during the year. Following FDA approval it launched Azacitidine injection, a generic of Celgene's (CELG) Vidaza injection. It also launched Propafenone Hydrochloride extended-release capsules, the generic of GlaxoSmithKline's Rythmol capsules. The company then launched Hydralazine Hydrochloride injections, a generic version of Novartis's Apresoline injection.

Mylan currently has over 250 abbreviated new drug applications (or ANDAs) pending FDA approval. A few other recent launches include: Clindamycin Palmitate Hydrochloride, a generic version of Cleocin solution; Doxycycline Hyclate delayed-release tablets, a generic version of Doxteric; Armodafinil tablets, a generic version of Nuvigil; and Frovatriptan Succinate tablets, a generic version of Frova tablets. The FDA has also accepted its ANDA for fluticasone propionate and Salmeterol, a generic version of GlaxoSmithKline's Advair Diskus, with a GDUFA date of March 28,2017.

25 OTSUKA

Headquarters: Tokyo, Japan

www.otsuka.com
HEADCOUNT:           11,238
YEAR ESTABLISHED:      1921
REVENUES:           $10,240    (-16%)
NET INCOME:            $866    (-32%)
R&D:                 $1,446    (-17%)

DRUGS APPROVED

DRUG                   INDICATION

Rexulti                schizophrenia
Abilify                irritability in pediatric autism spectrum
                       disorder
Mikeluna               glaucoma and ocular hypertension

DRUGS PENDING

DRUG                   INDICATION

Samsca/JINARC          hepatic edema, cardiac edema
Abilify Maintena       bipolar I / depot injection
Zosyn                  complicated skin, soft tissue infections

PHASE IIB AND BEYOND

DRUG                   INDICATION

Rexulti                major depressive disorder / oral, agitation
                       associated with dementia
ASC-01                 major depressive disorder
AVP-786                agitation associated with dementia
Lu AA36143             alcohol dependence
Lonsurf                colorectal cancer, gastric cancer
TAS-118                pancreatic cancer, gastric cancer
SGI-110                acute myeloid leukemia, myelodysplastic
                       syndrome
Samsca/Jinarc          autosomal dominant polycystic kidney
                       disease
AKB-6548               anemia associated with chronic kidney
                       disease
OPC-12759E             dry eyes
SGI-110                myelodysplastic syndrome

EARLY RESEARCH PROJECTS

DRUG                   INDICATION

Rexulti                schizophrenia / depot injection
Lu AF20513             Alzheimer's demetia / injection
ASTX660                solid tumors, lymphomas
OPB-111077             solid tumors
TAS-117                solid tumors
TAS-119                solid tumors
TAS3681                prostate cancer
QCV-C02                colorectal cancer

TOP SELLING DRUGS

DRUG                INDICATION      2016 SALES   (+/-%)

Abilify             schizophrenia      $817       -72%
Samsca/Jinarc       hyponatremia       $419       18%
Abilify Maintena    schizophrenia      $490       41%


The pharmaceutical business of The Otsuka Group focuses on the priority areas of the central nervous system and oncology. To support global expansion efforts, Otsuka recently announced plans to construct a new pharmaceutical manufacturing facility in Mima City, Japan, which is scheduled to begin operations in 2020. Otsuka currently manufactures pharmaceuticals and ingredients at five factories in Japan.

Also, the recent acquisition of Neurovance, Inc. expands Otsuka's attention-deficit hyperactivity disorder (ADHD) strategy in the CNS therapy area to develop new products that also address issues of patient compliance and the challenging side effects from existing medications. Neurovance is developing centanafadine, a non-stimulant, triple reuptake inhibitor in patients with ADHD, and it has shown comparable efficacy to stimulant drugs with a potentially lower risk of abuse.

The company's antipsychotic drug Ability gained approval in Japan for the additional indication of irritability in pediatric autism spectrum disorder. This is the fourth indication for Otsuka's top seller, after schizophrenia, bipolar I disorder, and depression.

Under its alliance with development partner Lundbeck, Health Canada approved REXULTI for the treatment of schizophrenia. REXULTI, which became commercially available in Canada this spring, was discovered by Otsuka and will be co-marketed by the two companies. Separately, the U.S. FDA approved a labeling update of REXULTI for maintenance treatment of schizophrenia.

Otsuka and Lundbeck also recently announced positive results from Phase III trials evaluating brexpiprazole in the treatment of agitation in dementia of the Alzheimer's type, which showed improvements in symptoms relative to placebo.

Additionally, results from the companies Phase III trials of nalmefene in alcohol dependency demonstrated a statistically significant difference compared to placebo for the primary endpoint. This candidate is anticipated as a new, potentially continuous treatment option for the purpose of reducing alcohol consumption and social reintegration.

Among its late stage assets, Otsuka and Proteus Digital Heath have resubmitted an application to the FDA for the first potential digital medicine, which consists of Abilify embedded with the Proteus ingestible sensor in a single tablet, intended for serious mental illness. If approved, the drug/device would provide digital records of medication ingestion and share information with healthcare providers. The NDA has an anticipated action date in 4Q17.

Caption: The headquarters of pharmaceutical giant Pfizer in Manhattan, New York. With $52.8 billion in 2016 revenue, Pfizer again is the top (bio)pharma company in the world.

Caption: Novartis headquarters in Basel. Switzerland. The Swiss multinational pharmaceutical company ranks number two in Big Pharma sales in 2016 with $48.5 billion of revenues.

Caption: Sales of Merck's cancer drug Keytruda grew 150% in 2016 to $1.4 billion.

Caption: Roche's $6.6 billion cancer drug Herceptin grew 1 % during the year while arthritis drug RoActerma reached $1.6 billion in sales on 15% growth.

Caption: Roche headquarters in Basel, Switzerland. With $38.4 billion in sales, Roche is the fourth largest drug maker in the world.

Caption: UK-based GSK moved into the top five with nearly $38 billion in drug sales for 2016.

Caption: J&J's headquarters in New Brunswick, NJ. A 24% increase in oncology sales helped boost revenues to $33.5 billion for the year.

Caption: AbbVie's HQ in Chicago, IL. The maker of blockbuster Humira delivered its strongest year yet since launching four years ago.

Caption: Dave Ricks
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