Relative Price & Value of pre-Phase III Pipelines for the 22 Largest Drug & Biotech Companies – Updated View


Using patent data we estimate the amount and quality of innovation in companies’ pre-phase III (aka ‘hidden’ pipelines), and then determine whether companies’ share prices accurately reflect what’s in these hidden pipelines.  Since inception (November 2012), companies that screen as >= 20% undervalued have outperformed their peers by 1.5x (cap wtd) to 1.7x (equally wtd)

We believe that the duration and consistency of our performance validates our approach – the odds against achieving this level of performance through random selection of candidate stocks are roughly 44,000:1

Because of large misvaluations in hidden pipelines, shares of VRTX, BMY, SNY, and ROCHE all appear at least 20 percent undervalued. Conversely shares of ALXN, BIIB, CELG, GILD, NVO, REGN, and SHPG all appear at least 20 percent overvalued

For more information on our pipeline valuation methods, and for related R&D productivity metrics covering the 23 largest publicly-traded companies (by R&D spending) please visit

For our full research notes, please visit our published research site

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