Both European and US pharmaceutical industry players are highly research-oriented and possess very diversified portfolios. While each country has its national champions, Swiss companies rank alongside US giants as the world's largest players. Like chemical producers, drugmakers were dogged in 2014 by strong currency fluctuations, which curbed nominal growth figures. Growing competition in international markets led to a flurry of mergers& acquisitions as well as portfolio swaps. In 2015, the outlook appears much the same, although company chieftains stress that internal streamlining measures are laying the foundation for future growth.

Novartis Has "Transformational Year"

For Novartis, the European continent's biggest drugmaker in terms of total sales revenue, 2014 was a "transformational year," said CEO Joseph Jimenez. "We improved our execution, while taking steps to focus the company on our three leading businesses with global scale. We delivered solid sales growth with margin expansion, strengthened innovation, and advanced our quality and productivity agendas."

Figures for the last business year show net sales up 1% (3% in constant currencies) to $58 billion, with operating income up by the same margin to $10.7 billion. Core operating profit grew by 3%. For 2015, the Swiss drugmaker expects net sales to grow by a by a "mid-single digit margin" and core operating income to grow ahead of sales at a "high single-digit rate."

Roche Makes "Good Progress"

Another of Switzerland's international pharmaceutical giants, Roche, made "good progress" in 2014, said CEO Severin Schwan. "Solid growth was seen in both divisions," he said, "driven by our newly launched medicines and diagnostic tests." The company made ten targeted acquisitions to complement its existing portfolio in Pharma and Diagnostics.

Overall sales at the Swiss drugmaker rose 1% (5% in constant currencies) to 47.5 Swiss francs. The Pharmaceuticals division, driven by oncology and immunology, increased revenues by 1% to 36.7 Swiss francs, the Diagnostics division lifted sales 6%. Core operating profit sank by 1% to 17.6 Swiss francs. In 2015, sales are forecast to rise by a low-to-mid-single digit margin at constant exchange rates, with core earnings growth surpassing sales growth.

Sanofi Delivers "Strong Results"

Sanofi, France's largest drugmaker, delivered "strong financial results in 2014, making significant progress in bringing new medicines to market," said acting CEO Serge Weinberg, In 2015, he said, Sanofi's focus (under newly appointed CEO Olivier Brandicourt) will be on operational excellence, as it launches multiple new medicines and vaccines and invests in its R&D projects to maximize their potential. Business earnings-per-share are expected to be stable or rise "slightly."

Group sales last year advanced nominally by 2.5% to €33,8 billion and by nearly 5% in constant currencies. Revenues of the Pharmaceuticals segment grew by 4.4%, driven by Diabetes and Genzyme. Sales of Vaccines increased 7.2%, Animal Health by 6.7%. Business net income improved by 2.4% (6.7% in constant currencies) to €6.8 billion.

Glaxo SmithKline Faces Headwinds

Britain's biggest drugmaker, Glaxo SmithKline (GSK) reported group revenues of £23 billion excluding divestments, a decline of 3% in constant currencies or 10% in Sterling. Consumer Healthcare sales fell 1%. The company pointed to challenging trading conditions and reflecting manufacturing issues.

GSK's operating profit plunged by 40% to £691 million and core operating profit by 6% to £6.6 billion. Total earnings per share fell by 1% to 95,4p. CEO Andrew Witty said some of the headwinds the group faced in 2014 will continue to adversely affect performance in 2015; however, with annualization of these factors and successful execution of our priorities, we expect a stronger performance in the second half of the year."

AstraZeneca has "Remarkable Year"

CEO Pascal Soriot said 2014 was "a remarkable year" for Swedish-British pharmaceutical manufacturer AstraZeneca. The drugmaker achieved a record six product approvals, swelling its pipeline across all main therapy areas. Growth platforms now account for more than half of sales revenue, which last year rose by 1% (3% in constant currencies) to $26.1 billion. Growth growth platforms "more than offset" the negative effects of patent expiries, the company said, but operating profit  fell 17% to $1.6 billion.

AstraZeneca's guidance for 2015 "reflects our focus on creating value by investing in our new brands and exciting pipeline while we continue improving productivity to protect our profitability in the face of patent expiries," Soriot said, adding that the company is on track to return to growth by 2017.

Merck KGaA

In Germany, leading drugmaker Merck KGaA closed 2014 with "record figures" and strong organic growth across all four divisions, said CEO Karl-Ludwig Kley. Good

operating business and acquisitions boosted total sales by 5.5% to €11.3 billion, and EBITDA pre-exceptionals rose by 4% a record € 3.4 billion. Merck Serono, the company's biopharmaceutical business, recorded organic sales growth of 3.6% including negative foreign exchange effects of nearly 2%.

With the offer to acquire Sigma-Aldrich and the alliance with Pfizer in immune-oncology, Merck has laid the foundations for future growth, the CEO said. For 2015, he forecast a "slight increase" in organic sales amid "moderately positive" foreign exchange effects.  EBITDA pre exceptionals in 2015 should "at least reach the previous year's level."

Divestments Hit Merck & Co Sales

A more focused Merck & Co "has led to better, consistent execution, and our results in 2014 demonstrate the significant progress we've made," Kenneth C. Frazier, CEO of the US-based pharmaceutical group, said in presenting annual results.

While sales declined 4% to $42.2 billion, net income under US GAAP soared to $11 billion from $4.4 billion. The negative sales figure is blamed on patent expiries and divestitures, including the transfer of the $2.2 million Consumer Care business to Bayer for $14.2 million. Full-year pharmaceutical sales fell by 4% to $36 billion. Excluding the foreign currency impact, Merck expects revenues of $38.3 to $39.8 billion in 2015 and non-GAAP per share earnings of $3.32 to $3.47.

Pfizer Meets Financial Guidance

Another internationally active US pharmaceutical giant, Pfizer, met or exceeded all components of its 2014 financial guidance, said CEO Ian Read. Adjusted revenue, totaling $49.4 billion, came in well within management's forecast range, as did the earnings-per-share figure of $2.26. For 2015, Read forecast reported revenue of $44.5-46.5 billion.

In last year's fourth quarter, Pfizer's global pharmaceutical revenues fell back 7%, due to the patent expiry of Celebrex and Detrol LA in the US and of Aricept in Canada as well as the termination of a co-promotion agreement. This was partially offset by growth in emerging markets and the strong performance of a drug in Europe. Pretax income declined 9%.

"Strong Year" for Johnson & Johnson

Alex Gorsky, CEO of US pharmaceutical and consumer health major Johnson & Johnson, described 2014 as a strong year. "We delivered solid financial results while continuing to make investments to accelerate growth for the long term," he said. Sales rose 4% to $74.3 billion, with operational profit up 6.1%, including a negative currency impact of 2%. Excluding the net impact of acquisitions and divestitures, sales rose 8%. Net earnings came in at $16.3 billion.

The Pharmaceutical division saw "significant momentum," with sales of 15% to $32.3 billion, and operational growth of 16.5%. Currency translations had a negative impact of 1.6% Consumer sales receded by 1.4% to $14.5 billion, with an operational increase of 1% and a negative currency impact of 2.4%. Gorsky's guidance for 2015 foresees earnings per share of $6.12-6.27.