Since 2023, the global biopharmaceutical industry has experienced a new wave of baptism, with the disappearance of the new crown dividend, the capital winter, the sudden emergence of GLP-1, and the ...... of the "drug king" changing hands
As of February 20, local time in the United States**, the "drug duo" has been firmly in the top two with the concept of explosion, among which Eli Lilly successfully surpassed the "big brother" Johnson & Johnson, with a market value approaching one trillion US dollars, becoming the first; Although Novo Nordisk followed, its market value has exceeded $200 billion compared with the same period last year, and it has become the second European company to exceed $500 billion after LVMH. Amgen also took a step forward and managed to break into the top 10.
In contrast, Bristol-Myers Squibb fell sharply and fell out of the top 10 due to the failure of drug O (vuliumab) in the market. Pfizer, which has been hit hard by the decline in Covid business, is in ninth place, struggling on the edge of the top 10 rankings. The change in market capitalization ranking is enough to reveal the performance pressure, product competition and market challenges that major multinational pharmaceutical companies (MNC) are currently facing. Up to now, the annual reports of the top 10 multinational pharmaceutical companies by market capitalization have been released, how have they performed in the past year? In the new year, how should multinational pharmaceutical companies respond to the volatile market and stabilize their market value?
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* Medicine supports half of the country.
Specifically, on February 16, local time, Eli Lilly's stock price hit a new high, closing at 78206 US dollars, up 32%。On February 20, it fell, but the price was still more than 20% higher than at the beginning of the year. The rally came after Eli Lilly reported better-than-expected fourth-quarter earnings at the beginning of the month, which once again sparked enthusiasm in the secondary market.
Eli Lilly's quarterly report showed that the company's overall revenue for the quarter was 93US$500 million, a year-on-year increase of 28%, significantly exceeding market expectations of 89$600 million. Among them, the ** drug Zepbound and the hypoglycemic drug Mounjaro have become the main drivers of performance. Mounjaro's sales in the fourth quarter of last year were 22$100 million, up from 2 in the same period last yearNearly 8 times the $79.2 billion in sales. Although Zepbound only started sales in early December last year, it has already reached 1$7.6 billion. Eli Lilly also expects revenue in the range of $40.4 billion to $41.6 billion in 2024.
After the stock price rose sharply again, Eli Lilly's position as the world's largest listed pharmaceutical company in terms of market capitalization was more stable, nearly $200 billion higher than the second place Novo Nordisk. The industry has begun to speculate that Eli Lilly will become the first U.S. pharmaceutical company to reach a market capitalization of $1 trillion outside of the "Magnificent Seven" of the U.S. stock market. Judging from the current market capitalization, Eli Lilly has surpassed Tesla among the Big Seven and ranks eighth in the U.S. market. Terence Flynn, an analyst at Morgan Stanley, an international investment bank, pointed out that the results of the third phase of the Orforglipron trial, which will be announced in 2025, are expected to drive Eli Lilly's stock price further, with a market value of $1 trillion just around the corner.
Novo Nordisk, another company with Eli Lilly and known as the "best pharmaceutical duo", also managed to exceed $500 billion in market capitalization, ranking second among multinational pharmaceutical companies, and becoming the second European company with a market value of $500 billion after LVMH. The 2023 financial report shows that the company's revenue in the past year was 2322DKK 6.1 billion (approx. 337.).US$7.1 billion), up 31% year-on-year, with an operating profit of 1025DKK 7.4 billion (approx. 149.).US$1.4 billion), a year-on-year increase of 37%. Among them, 3 semaglutide products: Ozempic (indication for type 2 diabetes), Wegovy (indication for obesity) and Rybelsus (indication for type 2 diabetes), with a total annual sales of 1458DKK 1.1 billion (approx. 216.1 billion.)$1.5 billion), an increase of 8878%, contributing more than 60% of revenue.
In addition, Pfizer and Roche, which are among the top 10 in terms of market capitalization, have also entered the GLP-1 drug market through self-development or acquisition. Moreover, for the global first-class drug market, analysts of Wall Street investment banks still maintain high expectations. The World Obesity Federation (WOF) has predicted that by 2035, more than 4 billion people may be suffering from obesity of varying degrees. Goldman Sachs analysts** expect the global anti-obesity drug market to grow to around $100 billion in annual sales by 2030, based on the fact that approximately 15 million U.S. adults will receive anti-obesity drugs** for chronic management by 2030, excluding people with diabetes.
"The King of Medicine" has been repeatedly variable.
As early as the first half of last year, Merck's K drug (Keytruda) may replace Humira to take over the "drug king", and this is indeed the case after the release of the annual report, but the market value ranking of the two companies has not changed much compared with the same period last year, and they are still in the 4th and 5th places respectively.
Since 2012, Humira, AbbVie's immunology division, has been the world's highest-selling drug product for ten consecutive years, with cumulative sales of more than $200 billion, and Humira has been called the world's most profitable drug. However, with the lapse of patent protection and the rapid influx of generic drugs, the "King of Medicine" finally fell off the altar. Judging from AbbVie's 2023 financial report, the company achieved revenue of 5431.8 billion US dollars, down 64%；Achieved a net profit of 486.3 billion US dollars, down 58 percent year-on-year91%；The revenue of Humira is 1440.4 billion US dollars, down 322%。
However, in the field of autoimmunity, AbbVie also has a pair of "Gemini" products, upadacitinib (trade name: Ruifu) and lisenkizumab (trade name: skyrizi). At the 6th CIIE in 2023, AbbVie told the reporter of "International Financial News", "At present, Ruifu has obtained a total of 7 indications in the three fields of **, rheumatism and digestion, and the company will focus on ensuring that Ruifu participates in multiple phases of clinical studies around the world synchronously, and can be approved for marketing at the same time in the future." According to Evaluate Pharma**, sales of Skyrizi and upadacinib will reach $15.8 billion by 2026.
On February 20, AbbVie announced that CEO Richard Gonzalez will retire as executive chairman of the board of directors and has appointed Robert Michael to the board of directors, effective July 1, 2024. Gonzalez was the first and only CEO since AbbVie spun off from Abbott, and his 11 years in office were also 11 years of Humira dominance. Now that Gonzalez has retired and Humira has fallen from the altar, AbbVie will usher in a new era.
Merck's K drug hit $25 billion in sales this year. According to the 2023 annual report, Merck's full-year revenue reached 601$1.5 billion, up 1% year-over-year. Among them, the annual sales of K drugs increased by 19% year-on-year. K drug has successfully won the title of "King of Medicine" and continues to expand the scope of indications. K has been approved for a number of indications in China, including melanoma, NSCLC, head and neck squamous cell carcinoma, colorectal cancer, esophageal cancer and liver cancer. On February 4, Merck & Co., Inc. announced that Drug K has been approved by the National Medical Products Administration (NMPA) of China for the first-line treatment of patients with locally advanced or metastatic biliary tract cancer (BTC) in combination with gemcitabine and cisplatin, which is already the 13th indication of Drug K in China.
After K drug won the "King of Medicine", the market did not have the imaginary surprise, not only because this result was expected, but also because the popular "** miracle drug" semaglutide was eyeing it. Judging from Novo Nordisk's annual report, the total sales of the company's three semaglutide products have reached 14581.1 billion DKK, or about 2161.5 billion US dollars, close to the 25 billion US dollars of K drugs. In addition, semaglutide has also carried out clinical trials in the field of heart failure, chronic kidney disease, Alzheimer's disease and other multi-indication fields. How long can K medicine maintain its status as the "king of medicine" after it comes on the field this time remains to be tested.
Focusing on the main business has become a consensus.
As of February 22, the annual reports of the top 10 multinational pharmaceutical companies by market capitalization have been released. Specifically, under the influence of the failure of K drug and the damage to new crown products, the revenues of AbbVie and Pfizer have declined. Except for Eli Lilly and Novo Nordisk, which achieved revenue growth of 30% and 20% respectively, the rest of the MNC revenue increased slightly. All in all, multinational pharma companies have had a bad year in the past year. It is also under such pressure that it has become their consensus to reduce costs and increase efficiency by finding the main force and focusing on the main business.
Data**: Annual Reports.
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Pfizer's revenue fell by more than 40% last year to $58.5 billion due to the sharp decline in the new crown business, which also made it fall to 9th place in the market capitalization rankings, struggling on the edge. After losing its core product, Pfizer also has a plan for the next step. Albert Bourla, Pfizer's chairman and chief executive, has said he plans to pin his hopes on one of the pharmaceutical industry's most competitive growth areas — cancer. In March 2023, Pfizer announced the acquisition of Seagan, a landmark pharmaceutical company in the ADC field, for $43 billion, which is the fourth highest investment in Pfizer's acquisition history. Pfizer expects the company to generate more than $10 billion in sales by 2030.
Roche and AstraZeneca, which rank sixth and eighth in terms of market capitalization, are also adjusting their main businesses. Roche has expanded from a single field of oncology to three areas: Oncology, Neuroscience and Ophthalmology. After internal adjustments, Roche will achieve revenue of 656. in 2023$300 million, an overall increase of only 1%. In terms of specific business, Roche was also implicated in the new crown business, and the sales of the diagnostics division fell by 13% year-on-year. But the ophthalmic drug faricimab (vabysmo) sold as much as 26$3.4 billion, a year-on-year increase of 324%. Roche expects mid-single-digit sales growth in 2024. Its latest blockbuster product, fareximab, has been approved for marketing in China at the end of 2023 for diabetic macular edema, which is expected to bring new growth to it.
In August last year, AstraZeneca officially split the original Respiratory, Digestive and Autoimmune Division into the Respiratory Inhalation and Biologics Division, as well as the Respiratory Nebulization, Digestion, Vaccines and Immunization**, and Autoimmune Division. The company said, "In the future, the vaccine and immunization ** and autoimmune business will continue to be injected, and these new business territories will add impetus to the long-term development of the company's business." "Some people in the industry believe that AstraZeneca's adjustment in the respiratory field is because it has two major products in this segment: budesonide formoterol and omeprazole series. For the whole of last year, AstraZeneca's overall revenue was 458US$100 million, a year-on-year increase of 6%, of which the Chinese market revenue was 58US$7.6 billion, accounting for 13%. At the beginning of this year, AstraZeneca also adjusted its structure in China and established a Chinese biopharmaceutical business, which also makes AstraZeneca's performance in China in 2024 more worth looking forward to.
Johnson & Johnson, which has fallen from the first to the third place in terms of market capitalization, and Novartis, which is currently ranked seventh, have chosen to "divest their non-core businesses." The fall in Johnson & Johnson's rankings is also forcing internal reforms. In August 2023, Johnson & Johnson officially announced the successful completion of the share exchange offer for the spin-off of Johnson & Johnson and Kenvue. This also means that Johnson & Johnson has successfully completed the spin-off of its consumer health business. Johnson & Johnson's Chairman and Chief Executive Officer, Anthony Du, said the spin-off brings significant value to shareholders while making Johnson & Johnson more flexible, focused and competitive. After the spin-off of the consumer health business, Johnson & Johnson was left with only two major segments: innovative pharmaceuticals and medical technology (devices and equipment). In 2023, Johnson & Johnson's full-year results reached 851$500 million, an increase of 65%, of which Innovative Pharmaceuticals achieved revenue of $54.8 billion.
Novartis has been striving to become a truly innovative drug company in 2023, with continuous spin-offs. First, Alcon, one of the largest ophthalmic products and device companies, was spun off. Later, in October last year, it divested its subsidiary Sandoz, which specializes in generic drugs and biosimilars. Novartis' overall revenue exceeded 10% last year, and after completely divesting its generic drug business, the company has achieved good results in oncology, immunology, cardiovascular-renal-metabolism, and neuroscience, achieving % and 34% growth, respectively. The overall revenue was 454400 million US dollars, a year-on-year increase of 101%。
Amgen, which is newly in the top 10 by market capitalization, still achieved 281 despite the decline in the overall biotech environment last year$900 million in revenue and $7A 1% increase is not easy. Robert A., Chairman and CEO of Amgen"More than a dozen major pipeline milestones will be achieved in 2024. It is understood that these pipelines that are about to reach milestones include: tarlatamab for small cell cancer, maritide for obesity and belital for acute lymphoblastic leukemia.
Focusing on the main business is an inevitable choice for the development and maturity of the industry and the improvement of efficiency, and it is also the way out for multinational pharmaceutical companies to protect themselves under the cold winter of capital. In an interview with the International Finance News, a senior executive of a multinational pharmaceutical company said, "In the past year, the global market has been facing various challenges, and all multinational pharmaceutical companies are carrying out strategic transformation, reducing costs and increasing efficiency according to their own business needs. In this way, the company's product line and team can better adapt to all the uncertainties brought by the market. ”