Mega-cap companies are generally thought of as those whose total value of all shares in issue is above $100bn. For context, that is more than four times the size by market capitalisation of Africa’s biggest bank, FirstRand.
Not all mega-cap companies will make good long-term investments. A useful, though perhaps slightly crude, analysis is to separate them into charging elephants and sluggish dinosaurs. For example, bringing a new single pharmaceutical product through all three phases of clinical trials typically costs upwards of $1bn, with considerable risk of failure along the way. UK-Swedish pharmaceutical company AstraZeneca has nine such new products in their late-stage pipeline. Most exciting for AstraZeneca investors, however, is the huge number of pipeline projects using medicines already approved for different indications and in different combinations.