At the Bear Stearns Healthcare Conference, executives from several life science companies targeted the developing world, especially China, as the place for growth of their revenues. After all, drug sales in China grew 12.3% to $13.4 billion in 2006, revenues in India increased 17.5% to $7.3 billion, and Latin American sales were up 12.7% to $33.6 billion.
Medtronic (NYSE:MDT) was very excited about growth in China, saying it could replace Japan as the biggest market for Medtronic products in eight to ten years. Currently, 70% of Medtronic’s revenues come from the U.S.
For Wyeth (WYE), international sales are the force behind rapidly rising revenues for Prevnar, a pneumonia vaccine that is the best-selling vaccine in the world. Its sales were up 32% in the first six months of 2007 to $1.2 billion. The drug is on track to reach annual revenues of $3 billion in 2009, a year earlier than originally predicted. Prevnar sales are being helped by its success in all emerging markets, but the overall sales growth of its products in China and Japan has been key for Wyeth’s increasing revenues.
For Pfizer (NYSE:PFE), Asian and Latin American markets have been expanding at twice the rate of developing countries. Pfizer has built factories in China and increased its R&D facilities in India and Korea. In recent years, the company has also established both R&D and clinical research facilities in Shanghai. Pfizer has invested over $500 million in its China operations, including its manufacturing sites.