Market capitalism

The development of a new drug is both a time-consuming and a cost-intensive process. It takes 12 to 15 years and costs up to 800 million to bring a new drug to the market. As measured by the market capitalization, the pharmaceutical companies play a pivotal role in the global economy. In February 2003 Pfizer was ranked at position five worldwide, with a market capitalization of 163 billion. Ranking third as far as the market capitalization in Europe is concerned was GlaxoSmithKline, with a current value of 101 billion. Novartis was number five in Europe with 82 billion. 

While not CROs in the conventional sense, emerging contract service providers must be mentioned in the context of firms providing support to sponsors in the medicinal product and device development market. These companies are large, with market capitalizations in the billions of dollars, dwarfing even the largest CROs. The prime examples of industries that participate in this arena are IT companies and central reference laboratories. 

In 2006 the company spent US 7.6 billion on R D and its income for that year was US 48.4 billion. Table 1.7 clearly demonstrates that pharmaceutical companies are heavily research based Pfizer s R D expenditure is head and shoulders above other technology companies with much higher market capitalization. 

Company Market Capitalization US billion (July 2007) Revenue, US billion (2006) R D Expenditure, US billion (2006)... 

UPS became a public company in 1999, going public in the largest IPO in the history of the New York Stock Exchange. Today, about half of UPS stock is owned by its current and former employees and their families. UPS has a market capitalization of 46 billion and is one of only seven public companies with an AAA credit rating from both S P and Moodys. 

Further, the OGI firms are described by the market capitalization and industry analyses shown in Table 7.4. 

This test was difficult to implement becanse of the lack of reliable M A data regarding the amonnt of income acqnired. Therefore, we looked at deal values and compared the snm of the valnes of acquisitions made by a company dnring 1997-2002 to the increase in its market capitalization for the same period. For this pnrpose, market capitalization was defined as total equity and debt capitalization. 

Notes Population companies with market capitalization > US 1 billion. Three-and five-year growth of 5%/year for US companies three- and four-year growth of 5%/year for non-US companies. 

Whenever an economic study is prepared, the marketing, capital investment, and operating expense data used are estimates, and therefore a degree of uncertainty exists. Questions arise such as, What if the capital investment is 15 percent greater than the value reported A sensitivity analysis is used to determine the effect of percentage changes in pertinent variables on the profitability of the project. Such an analysis indicates which variables are most susceptible to change and need further study. 

Market capitalization The product of the number of shares of common stock outstanding and the share price. 

W may have to pay a high premium becanse of high market capitalization of A Conflict of interest can arise with traditional activities Danger of undne interference of W with A s way of doing business... 

FIGURE 6 Distribution of the components of revenue (FY2005 annual data) for branded (a), generic (b), and biotech (c) drug manufacturers. Companies are arranged according to market capitalization (as of November 2006). 

Market capitalization Low Rapidly increasing Continues to increase... 

The second metric used to assess the overall health of combinatorial chemistry as a business is related directly to the performance of participating companies in the public capital markets. Specifically, it plots the aggregate market capitalization of combinatorial chemistry companies over time. Ultimately, excluding seasonality factors and microconditions which affect the stock performance of individual companies, a good measure of relative success of a field is simply to look at market capitalization over time for as large a collection or representative companies as is possible. This is shown in Figure 24.2, for a total of nine companies that are combinatorial chemistry specific and are also publicly traded. With an aggregate market value of more... 

FIGURE 24.2 Aggregate market capitalization of public combinatorial chemistry companies. Just as the ability to raise capital in combinatorial chemistry has increased steadily during the 1990s, so has the combined market capitalization of companies dedicated to the field that are also traded publicly in stock exchanges. Specifically, the combined market value of these companies has increased by a factor of 65 during the 1990s. Source Biovista (www.biovista.com). 

These two metrics, then, namely, capital-raising ability and also aggregate market capitalization, show that combinatorial chemistry is perceived as a solid investment over time, worthy of steady infusion of funds for further development, and also that it has returned substantial growth in the capital marketplace to its investors. 

Genomics is going to be the death of blockbusters. We re going to end up with more products, and each is going to be more effective, brags Don Drakeman. (Founded in 1987, and with a 1.3 billion market capitalization, his... 

Fuel cells are of huge interest to the technology marketplace, as illustrated by sizable investments in the technology and market capitalization of fuel cell companies with little or no current revenues. This is because... 

Market capitalization 15, 21, 35, 185 Market expectations 16-21, 183-185 Marketing, see Sales and marketing Marketplaces... 

Companies that have bought into the idea of a fairly small corporate center with limited day-to-day control should be careful not to become anorectic, however. With the critical size of a chemical compan/s market capitalization now in excess of USD 10 biUion, many companies have tended to become like conglomerates of related businesses. In order to add value (and to minimize the discount that the market puts on conglomerates), these organizations corporate centers - aside... 

In 2002, Cap Gemini Ernst Young developed VCI models for the energy, utilities, and chemicals industries. About 70 of the largest United States-based companies are included in the data set after filtering for a minimum market capitalization in each industry, and for availability of data. The models ended up explaining at least 70 percent and up to 90 percent of the variability in market value in an industry. 

Special Features Governance and disclosure. The NYSE has nearly 2800 listed companies, with a combined 15.3 trillion total global market capitalization. Its listing requirements are recognized by investors worldwide as the most stringent standards of any marketplace in the world. 

---