Tomahawk, WI 8/15/2013 (Basicsmedia) – Every year when financial results of different companies operating in a wide range of industries are published, pharmaceuticals emerge on top. While this is good news to people with investments in such companies, the rest of the society holds divergent views on the profitability levels of this industry. It is not uncommon to come across people with the belief that these companies are not doing the right thing since they are supposed to care for human life more than profits, yet the reverse seems to hold true every year. Will these companies lose relent?

Why Are Pharmaceuticals Very Profitable?

Since the 1980s, the pharmaceutical companies have made millions of dollars for their investors, way beyond the money which was used to develop it in the first place. If you were to take a close look at each company’s financial results, and pay close attention to their return on equity, return on assets and return on sales, you will discover that this industry is still miles ahead of the rest, regardless of how similar or comparable they are. It is important for each company in this sector, such as INO, to consider factors which have led to these huge levels of profitability.

Some of the companies which have performed admirably, although they are not to be counted among the big earners and major players in the pharmaceutical industry, include Alexion Pharmaceuticals (NASDAQ:ALXN), and Alnylam Pharmaceuticals (NASDAQ:ALNY). Inovio Pharmaceuticals is not as big in many aspects as the other companies mentioned here, but it has been performing in a not so respectable way. The company has gone through a period of losses which it has been reporting for close to 30 years.

Why Isn’t INO as Profitable as Other Pharmaceutical Companies?

The performance of Inovio Pharmaceuticals in the last thirty years or so, is a clear manifestation of the fact that not all companies in the pharmaceutical industry are profitable. Even though the major companies have millions, and probably billions of dollars to show for their work, the smaller ones are not as lucky and profitable. The industry is a high risk one, but many investors are still pouring and investing their money here. The company needs to look for ways of helping their investors to minimize the risk while investing in it.

The company has to work hard to demonstrate to its investors that it has the capacity to safeguard their investments and give them a commensurate reward or return on the same. In order to achieve this goal, it may need to focus on producing drugs which are needed in the healthcare sector, and have proven efficacy when used by humans. This firm has to hope that as it continues researching more on both the H7N9 DNA vaccine, and the Pennvax-B HIV vaccine, that the results will be positive and there will be a huge demand for such products.

If Inovio Pharmaceuticals can focus on increasing its revenues, this will at least give it a shot at making profits, which would be a much welcomed scenario as opposed to the many years of losses it has endured.

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