Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

When it comes to measuring success in the world of pharma, one closely watched gauge is the amount of revenue a drugmaker generates from new medicines. The figure can serve as a proxy for growth potential and give investors an indication of how productive a company's research pipeline is, or how fruitful an acquisition turned out to be.

But numbers alone don't tell the whole story.

Case in point: A Bloomberg Intelligence analysis of drugs approved since 2010 would appear at first glance to show Bristol-Myers Squibb as the clear winner. No other large pharmaceutical company had a higher proportion of sales from new drugs in the second quarter, and it wasn't even close. Newer drugs accounted for 42 percent of Bristol-Myers' revenue in the period, while runner-up Novo Nordisk managed just 24 percent. By 2020, analysts expect these new Bristol-Myers drugs to account for an industry leading 64 percent of its revenue. 

Bristol-Myers gets substantially more sales from recently approved medicines than any other company, but the majority of the revenue comes from just two drugs.
Source: Bloomberg Intelligence
New drugs include those approved from 2010 to 2016

But the rosy projections rely predominantly on two Bristol-Myers drugs, the cancer treatment Opdivo and the blood thinner Eliquis, and that extreme concentration is a risk. What happens if they don't hit their targets?   

Opdivo is expected to produce nearly $10 billion in sales in 2020, and there are reasons for high hopes --  the drug has racked up approval in multiple types of cancer and continues to grow rapidly. But less than two weeks ago, Opdivo failed an important clinical trial in newly diagnosed lung cancer patients, leading analysts to cut more than $1 billion from sales expectations and hand some of them to Merck's competing drug Keytruda. More cuts may be forthcoming.  

Catch Up
A clinical trial misstep for Bristol-Myers' Opdivo has convinced analysts to hike estimates for Merck's competing drug Keytruda.
Source: Bloomberg

In addition to the growing threat from Merck, AstraZeneca will get pivotal data for a two-drug combination that will compete with Opdivo in the first half of next year. So even in the case of rapidly growing blockbusters, what looks good today may not be the case tomorrow. 

On the flip side, a bit of context can make sluggish-looking drugmakers seem downright appealing. Johnson & Johnson, for instance, looks pretty pedestrian at first glance. New drugs accounted for 13.6 percent of total sales in the second quarter. When it comes to quarter-over-quarter sales growth from new medicines, it's dead last.

Johnson & Johnson's year-over-year new drug sales growth lags behind that of many of its smaller peers, but it's building off of a higher base.
Source: Bloomberg Intelligence

But J&J suffers unfairly in the sales contribution comparison because it is not a pharma pure-play -- a big chunk of its business comes from devices and consumer products. If you restrict the comparison to pharma revenue, Johnson & Johnson's new drug contribution jumps to 29 percent, behind only Bristol-Myers and Bayer. 

As for year-over-year growth, J&J is working off of a far higher base than most other companies. It had sales from new drugs of $2.18 billion in last year's second quarter and was able to grow that amount to $2.5 billion in the period this year. By way of comparison, the $332 million it added is more than half of Eli Lilly's total new drug sales in the latest quarter. There's also a healthy diversity in J&J's new-drug numbers: the growth comes from a broad base of treatments including the cancer drugs Darzalex, Zytiga, and Imbruvica, the blood thinner Xarelto, and the diabetes drug Invokana. 

The bottom line? Top-line trends can be useful, but it helps to scratch below the surface. In this case, not all new drug sales are created equal. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Max Nisen in New York at

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Beth Williams at