The pharmaceutical industry is uniquely dependent on patent protection. With the time and high financial costs involved in bringing a new product to market, pharmaceutical companies rely on drug patents to protect their innovations from use or imitation by competitors and allow them to generate the substantial returns associated with market exclusivity. As a result, it’s not surprising that a number of research studies have identified relationships between pharmaceutical companies’ patent portfolios and their financial performance.

Below we outline several indicators related to patent portfolios. We discuss the significance of each patent indicator in relation to pharmaceutical companies, summarising key findings from a number of empirical studies that support the idea that patent data can be predictive of pharmaceutical companies’ financial performance.

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In short, we have studied several research reports which support the idea that the following metrics are correlated to the financial performance of pharmaceutical companies: