And The Crystal Ball Says... Wall Street Forecasts Are Not So Accurate

File this under ‘you get what you pay for.’ Everyone loves to forecast. After all, a lot is riding on predictions, whether right or wrong. But how often is the crystal ball gazing generated by Wall Street analysts about prescription drug sales actually accurate? Well, it turns out, not so often, at least according to a new analysis by Nature Reviews Drug Discovery. For instance, more than 60 percent of consensus analyst forecasts for more than 260 drugs that were launched between 2002 and 2010 missed by more than 40 percent of actual peak revenues. Some were under and some were over. And a significant number were overly optimistic by more than 160 percent of the actual peak sales. Meanwhile, the variance in peak estimates was 45 percent compared with actual peak sales six years after launch. There are also notable differences in estimates for medicines launched by big drugmakers and smaller counterparts. Why? The journal posits the difference can be traced to higher quality and more analyst coverage, known as the ‘sell side’ on Wall Street. In any event, the average bias among estimates for big pharma drugs is low, but forecasts for drugs from smaller companies tend to overestimate peak sales by more than 30 percent, Nature writes. The journal also found that sales for cardiovascular and central nervous system drugs were most often overestimated, while oncology treatments were generally underestimated. It appears, the journal writes, that forecasts overlooked the full...
Source: Pharmalot - Category: Pharma Commentators Authors: Source Type: blogs