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Big drug companies’ failure to develop new medicines in recent years is well documented. Despite still-robust profits, investors are heading for the exits as patents on big-selling products near their end.

For the most part, Pharma P/Es have shrunk.

The absence of new blockbusters isn’t for lack of trying. Eli Lilly (NYSE:LLY) scrapped three promising drug programs last year that separately were developing treatments for Alzheimer’s disease, diabetes and skin cancer. Pfizer’s (NYSE:PFE) high-profile failures in the past few years include an experimental cholesterol drug and an inhaled insulin treatment for diabetics. (Both were expected to be blockbusters.) In late December, Abbott Laboratories (NYSE:ABT) and British rival AstraZeneca (NYSE:AZN) ditched a cholesterol drug they were jointly developing.

Woe is Pharma.

But isn’t that a Yankee-centric way to think of the drug business – a failure if it can’t come up with pricey new drugs for Americans who pay top dollar? What of the global economy?

The global pharmaceutical market is poised to grow as much as 7% this year to $880 billion, according to IMS Health. Emerging markets will be a big part of that growth as drug sales in developing economies will rise as much as 17% to $180 billion, IMS estimates. More government spending and broader access to health care is driving demand. Sales in China alone will climb at least a quarter to $50 billion, IMS estimates.

Here’s a look at recent sales growth trends at big pharma (the spikes represent acquisitions).

Pfizer, the world’s biggest drug maker, is seeing its strongest growth in Brazil, Russia, India, China (The BRIC countries), and Mexico and Turkey. Sure, it’s still a small piece of the overall pie. The 2009 takeover of Wyeth helped Pfizer boost emerging markets sales more than 80% to $8.7 billion through the first nine months of last year. Emerging markets account for more than 17% of sales, up from 14% at the end of 2009 (including Wyeth revenue).

Merck’s (NYSE:MRK) goal is to count a quarter of sales from emerging markets in two years, up from 18% today. That could help produce earnings growth, or at least reduce future earnings decline, by selling more existing drugs.

Abbott Laboratories became the biggest drug maker in India with a $3.7 billion takeover of Piramal Healthcare last year. About $8 billion, or almost a quarter of Abbott’s 2010 estimated sales, came from emerging markets.

“Emerging markets may provide most of the growth opportunity in the pharmaceuticals industry by the middle of the next decade,” Bristol-Myers Squibb (NYSE:BMY) says in its annual securities filing last year.

Bristol-Myers lags its rivals. Emerging markets only accounted for 4% of Bristol-Myers 2009 sales of $18.8 billion. Lilly also gets a relatively small piece of its revenue from emerging markets: $2 billion, or less than 10% of sales. The company aims to double that number in the next five years.

The stocks of Abbott, Bristol-Myers, Lilly and Merck are all rated attractive by YCharts Pro. (Pfizer, due to a recent run-up in price, is neutral.) They’ve been beaten up because of a dearth of new drugs. But they have strong fundamentals and new (if less lucrative) markets to chase overseas.

Disclosure: none

Source: Emerging Markets May Make Big Pharma Attractive Again