Which Firms Dominate The Global Diabetes Market?

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Diabetes is becoming prevalent disease in globally especially in the developing world. Though there are plenty of players in the market for treating Diabetes, four major global drug companies dominate the market.

From an article on the diabetes market in China:

At present, the competition in the diabetes market is fierce. Traditional Insulin is still the most popular drug category and accounts for about half of the market. The rest is shared among GLP-1 receptor agonists (17%), DPP-4 inhibitors (21%), and SGLT2 inhibitors (6%), which are regarded as the rising stars. The current global diabetes market is mainly divided by four giant monopolies, Novo Nordisk, Sanofi, Eli Lilly, and Merck. Combined, they account for about 72% of the market.

 

Source: The Diabetes Market in China, Pharma Exec

Investors looking to profit from the growing diabetes epidemic can consider adding some the drug makers in this field. The ADR tickers of the four major players are shown below:

1. Novartis AG (NVS)

2. Eli Lilly (LLY)

3. Sanofi (SNY)

4. Merck (MRK)

Disclosure: No Positions

The Top 50 Global Pharmaceutical Companies 2018

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Pharmaceutical Executive magazine published their annual ranking of the world’s top pharma firms for 2018 last month. Pfizer(PFE) is the world’s top drug firm based on sales. Last year Pfizer had sales of over $45 billion. The 2nd top firm was Novartis(NVS) of Switzerland. US drug giant J&J came in at number five.

From the research report:

The first 10 spots on the ledger, once again led by Pfizer, changed little from the previous full-year rankings, with some movement of positions up or down a slot. Prescription sales gains among the entrenched stalwarts were relatively modest, on average, with AbbVie and Johnson & Johnson experiencing the largest increases at 9.7% and 8.6%, respectively. In assembling the data for the annual listing—now in its 18th year—Pharm Exec partnered again with life sciences market intelligence firm Evaluate Ltd.

Sanofi, ranked sixth in sales, boosted its R&D investment by 8.1% versus the previous year. The Paris-based company currently has 28 projects in Phase III development or seeking approval with regulators, and has six programs targeting rare diseases in Phase II or III clinical trials. It’s no secret that, overall, industry investment in rare disease drugs—on the investigative and commercial-expansion stages—is on the rise. The FDA, for example, reportedly granted 77 orphan drug approvals last year and 476 orphan drug designation requests.

Among the top 20 sales leaders on our list, other companies with notable spikes in R&D spending year-on year include AbbVie at 16.3%, Shire at 21.6%, and Bristol-Myers Squibb, which invested $4.82 billion in R&D, at 9.5%.

 

 

 

Source: Pharm Exec’s Top 50 Companies 2018, Pharma Exec, July 25, 2018

Disclosure: No Positions

 

History of NATO Expansion: Infographics

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The North Atlantic Treaty Organization(NATO) was founded in 1949 and evolved to protect the West from the USSR. The USSR established its own organization called The Warsaw Pact to protect its allies in Europe. The Warsaw Pact collapsed when the USSR collapsed in 1989-91. Though the enemy split into countries the NATO survived and continues to evolve to combat present and future attackers.

From its original inception the NATO has added new members and today 29 countries are members of this powerful military alliance as shown in the infographics below:

Click to enlarge

Source: Sputnik News

Defensive Sectors’ Weightage in the S&P 500 Has Declined Since The 1990s

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The S&P 500 Index is not as diversified as many investors think. In fact, the IT sector alone accounts for just over 25% of the index and the weightage of the defensive sector has fallen continuously since the 1990s.

S&P 500 sector breakdown:

Click to enlarge

Source: S&P 

The defensive sector used to account for 35% to 40% in the early 1990s. Since then it has declined to reach 16% now. In the past two the decline in weightage has accelerated sharply according to Matthew A. Young of Young Investments.

Click to enlarge

Source: July 2018 Client Letter: Are you Prepared for the Next Stock Market Downturn?, Young Investments

The high allocation to the tech sector is big risk for investors especially during market corrections or a bear market. From the above article:

If the S&P 500 was able to fall more than 50% during the last two big bear markets when defensive stocks were a greater share of the index, what happens during the next big bear market?

The biggest sector in the S&P 500 today is technology. During the dotcom bust, the S&P 500 technology index plunged 83%, eviscerating the savings of millions of investors loaded to the gills with technology shares.

According to the most recent Bank of America Merrill Lynch Fund Managers Survey, the most crowded trade on Wall Street today is big technology stocks.

Unsuspecting index-based ETF investors may have an unpleasant surprise in store during the next market downturn. That seems to be the opinion of Jim Rogers. Rogers was the co-founder of the Quantum Fund, one of the most profitable hedge funds on record. Rogers expects the next bear market to be “horrendous”—maybe even the “worst”—and he thinks ETFs could collapse more than anything else because that’s what everybody owns. ETFs are of course supposed to trade near the underlying value of their assets, but during sharp market moves we have seen prices diverge widely from the underlying value of those assets.

The key takeaway for investors is that the S&P 500 should not be considered as well diversified. Hence products derived off of the index such as ETFs or mutual funds will perform poorly in adverse market conditions.

Related ETF:

  • SPDR S&P 500 ETF (SPY)

Disclosure: No Positions