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5 Aug 2013

Pharmaceuticals Sector 'Most Profitable' for Shareholders

The pharmaceuticals industry was found to be the most profitable sector for shareholders in 2012, suggesting that this could be an attractive field for investors.

Gross margins equated to an impressive 72.6% across the 12-month period, according to investment research analyst at The Share Centre Helal Miah.

He explained that pharmaceutical giants GlaxoSmithKline and AstraZeneca featured in the top ten profit contributors, owing to the potential for significant markup on clinical products.

"The process of drug discovery and approval is long, expensive and laden with risks, but once a drug is approved, companies can make huge profits for the duration of their patents," Mr Miah said.

Smaller players in the sector were described as high risk but full of growth potential, whereas the bigger companies offer "attractive yields and stability".

GlaxoSmithKline, which invested almost £4 billion on medicine development in 2012, was named as one to watch, with The Share Centre anticipating impressive investor returns.

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