Johnson & Johnson and Novartis Among World's 50 Most Profitable Companies in Fortune Global 500

Aug 06, 2024 22:41 CST Updated 22:41

Johnson & Johnson

Medical Device R&D and Manufacturer

Who is the most profitable pharmaceutical company in the world? The answer was revealed on August 5, with the release of the 2024 Fortune Global 500 rankings.

Reports show that the total profits of the Fortune Global 500 companies in 2023 were close to 3 trillion US dollars, increasing by 2.3% compared to the previous year. Among the top 50 most profitable companies, pharmaceutical enterprises occupied two seats, namely Johnson & Johnson from the United States and Novartis from Switzerland, with their profits reaching 35.153 billion US dollars and 14.850 billion US dollars respectively in 2023.

In 2023, the profit growth of both Johnson & Johnson and Novartis increased by more than 90% year-over-year, with Novartis' profit growth reaching 113.5%.

Both Companies Coincidentally Opted for Business Spin-offs. After completing the spin-off of its consumer health business in 2023, Johnson & Johnson has focused on two major businesses: medical technology and pharmaceuticals. In 2023, Johnson & Johnson's pharmaceutical business generated revenue of $54.759 billion, a year-on-year increase of 4.2%; its medical technology business achieved revenue of $30.4 billion, marking a year-on-year growth of 10.8%.

Johnson & Johnson's pharmaceutical business mainly focuses on immunology, oncology, neuroscience, infectious diseases,Pulmonary Hypertension, cardiovascular, and metabolic fields. Among them, the autoimmune and oncology businesses are evenly matched, contributing revenues of $18.052 billion and $17.661 billion respectively, becoming the core pillars driving Johnson & Johnson's performance growth.

Novartis, similarly successfully spun off its generic drug business in 2023.Sandoz, thus transforming into a pure innovative pharmaceutical enterprise. The company has adjusted its originally key focus on five major therapeutic areas—cardiovascular, immunology, neuroscience, solid tumors, and hematology—into four: cardiovascular-renal-metabolic, immunology, neuroscience, and oncology.

Cardiovascular Segment Generated $6.391 Billion in Revenue for Novartis in 2023, a 36% Increase Year-on-Year. Novartis’ Strategy in the Cardiovascular Field Focuses on Precision Rather Than Volume, with Its Star Product...Sacubitril Valsartan Sodium Tablets(Entresto) is the company's best-selling product, with revenue reaching $6.035 billion in 2023. This product is a novel heart failure medication and the world's first angiotensin receptor-neprilysin inhibitor.

Looking at it the other way around, among the loss-making companies in the 2024 Fortune Global 500, 33 companies failed to achieve profitability, with pharmaceutical enterprises occupying one spot—Germany's Bayer Group. In 2023, the company reported a profit loss of $3.179 billion. Bayer operates three major divisions: prescription drugs, crop science, and consumer health products, with crop science being the key factor impacting the company’s performance. Since 2024, the company has been undergoing internal restructuring and layoffs.

Overall, in the 2024 Fortune Global 500, there are 14 pharmaceutical companies listed, among which Eli Lilly of the United States and Novo Nordisk of Denmark are newly listed or re-listed companies.

In 2023, the revenues of these two companies were $34.124 billion and $33.703 billion, respectively; their profits were $5.24 billion and $12.143 billion, respectively. Among them, Eli Lilly's profit decreased by 16.1% year-on-year, while Novo Nordisk increased by 54.7% year-on-year.

Although Eli Lilly and Novo Nordisk rank at the bottom among the 14 pharmaceutical companies listed, these two companies are on the verge of breaking into the top ten global pharmaceutical enterprises, thanks to their blockbuster GLP-1 weight-loss drugs. Novo Nordisk's semaglutide is the world's first long-acting weight-loss drug to be approved for market, while Eli Lilly'sTirzepatideIt is the world's first dual-target weight loss drug to be approved for marketing. Notably, these two drugs are considered to have the potential to challenge the position of the global "new blockbuster drug" in the future. Both drugs are currently in the process of developing new indications.

In 2023, Novo Nordisk'sSemaglutide(Including weight loss and blood sugar reduction indications) sales reached $21.2 billion, accounting for more than 60% of the company's total revenue.

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