[Source: Evaluate]
In its recent ‘World Preview 2024 – Pharma’s Growth Boost‘ report, Evaluate reckons that five metabolic diseases drugs — Ozempic, Mounjaro, Wegovy, and Zepbound and Cagrisema will jointly pull in more than $100 billion by 2030.
For now though, oncology remains the dominant force in the pharma market as the bubble chart above shows (note the size of the blue dot representing oncology sales). Oncology will remain the most valuable therapy area in 2030, with over $370 billion in forecast sales across all products. That is more than twice the totals for endocrinology (obesity & diabetes), immunology, and a resurgent CNS market.
As Novo Nordisk and Lilly grow, Pfizer looks to regain its footing
While the pandemic made Pfizer the world’s largest pharma firm in 2022, the company has struggled to regain its footing as pandemic fatigue set in. Merck & Co. edged out Pfizer in 2023 to become the world’s largest, even though its growth was tepid. Evaluate projects that Pfizer will further drop in the rankings to fifth place by 2030.
The Evaluate report highlights Pfizer’s exposure to upcoming patent expirations, especially for notable drugs like the blood thinner Eliquis (apixaban) and breast cancer drug Ibrance (palbociclib) in 2027/2028. These expirations threaten Pfizer’s revenue, although the company has moved to counter the trend through a series of aggressive M&A deals including Seagen (ADC specialist), Trillium Therapeutics (oncology), Biohaven (neurology), Global Blood Therapeutics (rare diseases), and Arena Pharmaceuticals (immunology and inflammation).
[Source: Evaluate ]
Tepid R&D growth expected in pharma by decade’s second half
Despite the industry’s focus on innovation, R&D spending growth is projected to slow significantly in the latter half of the decade. Evaluate concluded that pharma R&D spending is poised to “grow significantly more slowly in the second half of the decade than it did in the first.” It projects that the CAGR of more than 9% in 2016–2023 will shrink to below 3% between 2023–2030. Combined R&D spend of over $300 billion in 2024 (27% of sales) could fall to 21% of sales in 2030, Evaluate projects.
[Source: Drug Discovery & Development research]
Potential impact of the Inflation Reduction Act (IRA)
As many pundits have observed, the Inflation Reduction Act (IRA) could inject significant uncertainty into the pharma sector. While its full impact remains something of an open question, the law empowers Medicare to negotiate prices for certain high-cost drugs. Negotiations are already underway for medications including Eliquis, Xarelto, Jardiance, and Januvia, with Novo Nordisk’s semaglutide (Ozempic and Wegovy) expected to be subject to negotiation by the end of the decade. This shift in pricing power, coupled with the IRA’s differential treatment of biologics and small molecule drugs, could influence future R&D investments and potentially create challenges for companies seeking to bring new therapies to market.
Many questions remain unanswered as the implications of the IRA continue to unfold, but it could put pharma firms on the defensive. Evaluate notes: “Battles could re-ignite as the IRA provisions roll out, and forecasts may change as the true shape of the law is revealed. It is difficult to gauge whether – or how much – IRA is influencing pharma’s choice of modality and/or indication.”
[Source: Evaluate]
On the rise of new modalities and likely sustained M&A activity
While established drug classes like GLP-1 agonists are poised to dominate the market in the near future, the Evaluate report also highlights the growing influence of novel therapeutic modalities. Advances in areas like antibody-drug conjugates (ADCs), radiopharmaceuticals, and gene therapies are opening up new possibilities for treating complex diseases. With a dozen ADCs already marketed, this red-hot class has attracted tens of billions worth of deals in the last two years, including Pfizer’s $43 billion acquisition of Seagen and AbbVie’s $10.1 billion Immunogen buy in 2023. Radiopharmaceuticals conjugate toxic radioactive isotopes to targeting ligands, offering similar innovation potential to ADCs and also attracting growing buyer interest and investment.
This drive for innovation is intertwined with a sustained wave of mergers and acquisitions (M&A). As the report observes, “M&A may be playing a relatively greater role given some pharmas’ need to replace genericising blockbusters.” The first half of 2024 saw close to $100 billion worth of Big Pharma M&A, putting this year on track to surpass 2023 – itself one of the top-three strongest M&A years in two decades. Companies facing looming patent cliffs are increasingly looking to acquisitions as a means to acquire promising assets and technologies, fueling further growth.
Filed Under: Metabolic disease/endicrinology, Oncology
