Drugmaker winners can acquire drugs, raise prices on existing drugs or focus on growing existing drugs to improve revenue. The biggest drugmaker winners though come from new drug approvals that can increase revenue for years, and also prove the long-term worth of a company’s research and development program. Blockbuster drugs coming off patent and facing generic pressure can be significant “loser’s” for drugmakers if drugmaker winners aren’t lined up to offset these losses.
Fierce Pharma and Evaluate Vantage charted the dollar value of industry launches over the last five years. Novartis had the most drug approvals overall at 12 but Roche took top prize due to the value of their 8 approved drugs at $99.8 billion. Merck’s position is probably way undervalued because its superstar drug Keytruda received FDA approval just before the 2016 cutoff for this chart. BMS had the lowest number of drugs approved in the past five years at three and all of those through their buyout of Celgene but they also have an industry leading cancer med in Opdivo that they have been focusing their energies on. Of course the latest news of Pfizer’s approval of their COVID-19 vaccine means they could top this chart in the near-term with the world’s top selling drug in 2021 and probably 2022.
Potential losers or those set to face significant generic pressure in the next decade include AbbVie’s Humira which was 43% of their total revenues in 2020 and is set to lose exclusivity in 2023 and Merck’s Keytruda which was 30% of 2020 revenues and has patents expiring in 2028. BMS has the most to lose this decade through Revlimid, Eliquis (with Pfizer) and Opdivo expiring patents. They are expected to be the most active M&A dealmaker even after their $74 billion deal for Celgene in 2019 and $13 billion buyout of MyoKardia in 2020.
In 2020 the FDA approved 53 new drugs which was the second-most in a single year after 59 in 2018. Approvals in the first half of 2021 are continuing this momentum with 29 drugs approved by June 30 which put the FDA ahead of last year’s pace. Of course, there has been controversy. The approval of Biogen’s Alzheimers disease treatment, Aduhelm, was so divisive that three members of the FDA advisory committee quit in protest. Harvard Medical School Professor, Aaron Kesselheim, call the approval “probably the worst drug approval decision in recent U.S. history.”
The best news for the future of the drug development came from Arda Ural, Ernst & Young industry analyst, “The acceleration in the successful development of truly novel platform technologies and therapeutics offers the opportunity for higher returns on investment and are driving pipeline priorities. Gene therapy, MRNA vaccines and therapeutics, cell therapy and gene editing once seemed like science fiction but now are a reality.”