2024年世界展望：制药业的增长 World Preview 2024 Pharmas Growth Boost

WorldPreview2024:Pharma’sGrowthBoost

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Foreword

Lastyear’sAgeofUncertaintyhasgivenwaytomore

predictablerealities,includingthedominanceofobesityandotherbigdiseases,awider

rangeofmodalitiesandanIRAthat’sheretostay.

Foreword

Lastyear’sAgeofUncertaintyhasgivenwaytomore

predictablerealities,includingthedominanceofobesityandotherbigdiseases,awiderrangeofmodalitiesandanIRAthat’sheretostay.

Obesitydrugsloomlargeover2030forecasts.GLP-1agonistsandrelatedincretinsarehelpingdriverecordoverallprescriptiondrugsalesgrowth,

propellingleadersNovoNordiskandEliLillytothetopofthecompany

rankingsandhoggingthelionÕsshareofthe2030producttop-ten.As

competitionrampsup,morepotentcompounds,combinationsandoral

formulationswilllikelysupportmetabolicdiseasesÕdominanceintothenextdecadeandbeyond.

Immuno-inflammationandoncologyalsomake2030Õstopten.SanofiÕsDupixentandAbbVieÕsSkyriziwillbethebiggestnon-obesitydrugs.

ResurgentCNSandrespiratoryarebothprominentamongmostvaluablepipelinecandidates,asindustry’sred-hotinnovationenginedrives

advancesacrosstheboard.Newmodalitiesandtechnologiescontinuetoopenupnoveltargetsandtargetingmechanisms:antibodydrug

conjugates(ADCs),multi-specificantibodies,RNA-basedtherapies,gene/celltherapiesandradiopharmaceuticalsareallexpectedtogrowsteeplyto2030.

BigPharmaÕsappetiteforBigDrugsforBigDiseasesreflectsongoing

patentexpirychallenges,expectedtospikethelikesofMerck,J&Jand

BristolMyersSquibbthisdecade.Patentexpiriesareafeatureofthe

landscape,justliketheM&Athatcanhelpaddressthem.Pharma

acquisitionsreachedahealthy$124billionin2023andlooksimilarlystrongsofarin2024Ðwelcomenewsforbiotechs,givenstubbornlylacklustre

publicmarkets.

Pharmacash-pilesandexpirypressuresshoulddriveevenmoredeals,butpharmaisalsohavingtoadapttootherrealities.Inflationandinterest

ratesremainstickierthanexpected,politicaluncertaintyendures,andnewtechnologiessuchasAIpromise(orthreaten)toupendR&Dworkflows.

ThesefactorsÐplustheM&Aupsurge-mayalreadybecontributingtoslowingforecastpharmaR&Dspend,whosegrowthfortherestofthisdecadeisjustathirdofthatseenbetween2016and2023.

TheUSInflationReductionActisbeddingintothelandscape.IndustryÕslegalchallengeshavesofarfailed,andpricenegotiationsbetweenpharmafirmsandMedicare/CMSareongoing.ManyimplementationdetailsoftheActremainunclear;theforthcomingUSelectionmayinfluencehow

aggressively(orotherwise)thelawistranslatedintoaction.

Butwithpayersfacingunprecedentednumbersofnewdrugs,andthe

publiclensstillfirmlyfocusedondrugpricing,itishardtoimagineanyUSgovernmentrepealingtheIRA.

Pharma’sGrowthBoost

ByMelanieSenior

Evaluate.

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BigDrugsforBigDiseases

Obesity&inflammationaredrivinghighgrowthandgiveusareinvigoratedtop10–butthereisstillthatpatentclifftocontendwith.

BigDrugsforBigDiseases

Obesity,inflammationdrivehigherpharmasalesgrowth

NovoNordiskandEliLilly’srespectiveobesity/diabetesduos,Wegovy/OzempicandMounjaro/Zepbound,plusinflammatorydisease

blockbustersDupixent-fromSanofi-and

AbbVie’sSkyrizi,willhelpdriveannualworldwideprescriptiondrugsalesgrowthtoalmost7.7%

overthenextfiveyears.That’stwopercentagepointsover2023’sforecasts,andsignificantlyoutpacesfive-yearCAGRsince2000.(See

WorldPreview

2023

).In2030,totalpharmasaleswilltop$1.7trillion.

Figure1:WorldwideTotalPrescriptionDrugSales(2016-230)

Source:EvaluatePharma©(May2024)

MetabolicDiseasesDrugsWillDominateTopProductRanksin2030–andLikelyBeyond

Fivemetabolicdiseasesdrugswillbythen

scoopinover$100billioncombined,

dominatingthetoptendrugranking.ThoseareNovo’sOzempic(semaglutide)andLilly’s

Mounjaro(tirzepatide)indiabetes,analogs

WegovyandZepboundforobesity,plusNovo’sfollow-oncombinationCagrisema(semaglutideandcagrilintide).Morethanonebillionpeople

worldwide–including50%ofallUSadults–areclassifiedasobese.Thesetreatmentsnotonlyhelpreduceweightbutarealsoshowntocut

theriskofrelatedconditionsincludingheart,

liverandkidneydisease.So$100billionmaynotbetheceiling.

Immuno-InflammationNotFarBehind:DupixentandSkyriziTake2ndand6th

Other“bigdrugsforbigdiseases”feature

prominentlyin2030’stopten.Thismarks

pharma’sshiftawayfromdrugsforrarediseasesandcancerinfavourofproductsthatcanmorequicklyfillpost-patent-expirygaps,ofwhich

therearemoretocome.

OzempicpushesSanofi/Regeneron’sDupixent

(dupilumab)intosecond,butthepipeline-in-

productwillstillsellover$22billionin2030asitcollectsapprovalsbeyondasthma,eczemaandmostrecently,eosinophilicesophagitis.The

drug’saverageannualgrowthofalmost10%

banksananticipatedapprovalinchronic

obstructivepulmonarydisease:recentPhase3datashowedtheIL-4/IL-13inhibitorsignificantlyreducesexacerbationsandimproveslung

functioninsomeCOPDpatients.

Figure2:Top10SellingProductsWWin2030

Source:EvaluatePharma©(May2024)

Note:Cagrisemaisnotyetapproved

Sixth-placedSkyrizi(risankizumab)willgrowbyover14%annuallyonaverageovertheperiodtoreach$19.5billioninsalesforsponsorAbbVie

by2030.TheIL-23antibody,alreadyapprovedforplaquepsoriasis,psoriaticarthritisand

Crohn’sdisease,ischasingafurtherwinin

ulcerativecolitis,aninflammatoryboweldisease.Withsalesofonce-giantHumirafallingsteeplyasbiosimilarsdeepentheirhold,AbbVieis

leaningheavilyonSkyriziandJAKinhibitorRinvoq(upadacitinib),togetherexpectedtoaccountforover40%ofAbbVie’s2030

revenue.

Replicatingtheoutsizedsuccessofpipelines-in-a-productlikeDupixentandSkyriziwillbe

tough,duetocompetitionanddisease

segmentation.Auto-immunediseasesincludingpsoriasisareincreasinglycrowded,commandinghighpromotionalspend.Developersnowseek

differentiationthroughbiomarker-ledpatientstratification,slicingthemarketintosmallerparts.

Johnson&Johnson’sDarzalex(daratumumab)isthelargestofthetwooncologytop-ten

candidates,justaheadofMerck’sgenericisingcheckpointinhibitorKeytruda(pembrolizumab).Keytruda’skeypatentexpiresin2028,likethatofBristolMyersSquibb’sOpdivo,whichhas

fallenoutofthe2030toptenasaresult.J&J’santi-CD38antibodyisanticipatedtosellcloseto$16billionacrossitsoverhalf-dozen

approvalsformultiplemyeloma(aspartof

severaltreatmentcombinationsandfor

differentdiseasestages).ItonlyjustoutsizesKeytruda,whoseannualsaleswillbythenhaveshrunkbyover40%to$14.6billion.

SkyriziandRinvoqare

expectedtoaccountfor

nearly50%ofAbbVie’s2030revenues.

PatentRisksPersist

Pharma’ssteepestpost-expirysalesdropsareyettocome.Thehighpointintermsof

worldwidesalesatrisk–$100billion,or6.6%oftotalsales–willbeinaboutfouryears,with

Keytruda,Opdivo,BMS/Pfizer’sclot-busterEliquis(apixaban),Pfizer’sbreastcancerdrugIbrance(palbociclib)andLilly’sTrulicity

(dulaglutide)fordiabetesallduetolose

protectionin2027-8.Lastyear,thosedrugstogethersoldalmost$58billion.

Figure3:WorldwideSalesAtRisk*fromPatentExpiration(2016-2030)

Source:EvaluatePharma©(May2024)

Note:Salesatriskrefersonlytoanticipatedlostsalesinthefirstyearpostexpiry

By2030,thatsalesexposurewillhavehalved.

Bycompany,MerckandBMSareprominent,

withJNJ,NovartisandAbbVie’sexposure

rampingupmoresteeplytowardtheendofthedecade,asdrugsincludingJ&J’sStelara

(ustekinumab)andNovartisCosentyx

(secukinumab),bothsoldforautoimmuneconditions,reachtheendoftheirprotectedlives.

By2030,Dupixent,SkyriziandDarzalexwilleachhavespentoveradecadeontheUSmarket;theoldest,Darzalex,willbe15.ThisbringsthemintothepenumbraoftheInflationReductionAct,

whichstipulatespricenegotiationson13-year-oldbiologicscostingMedicaremorethan$200

millionperyear.Life-cyclemanagement

strategiesthusbecomeevenmoreimportant.

Dupixent’ssubcutaneousversion,Faspro,waslaunchedin2020withanaddedingredient,

hyaluronidase,thatenhancesthedrug’s

absorptionfromsubcutaneoustissueintotheblood.MerckistryingsomethingsimilarwithitssubcutaneousKeytruda(MK-3475),which

featuresinEvaluate’stoptenmostvaluablepipelinedrugsin2030(seebelow).

Drugsponsorshopethatcombiningtheir

treatmentswithhyaluronidasemayprotectfromMedicare’spricenegotiationclaws:Medicare

countsalldrugswiththesameactiveingredientasthesameproductforthepurposesofthe

$200millioncostthreshold,regardlessof

formulationordeliveryroute.Thatprotectionisfarfromasurebet,though.

NovoandLillyCatapulttoTopCompanySpots;AbbVieThird

TheGLP-1agonistswillcatapultNovoandLillytotheverytopofthecompanyleague.Salesofeachwillgrowbyover12%onanaverageannual

basis,overshadowingevenAstraZeneca’s

anticipated5%+growthrate.Thisisaturnofthetables:neithercompanyhadmadethetoptenatalluntiltheirninthandtenthplaceslastyear.(SeeWorldPreview2023).Beforethat,

Novowascategorisedasmid-sized.EliLilly’smarketcapitalisationattheendof2020waslessthanhalfthatofJohnson&Johnson.

SkyrizihelpshaulAbbVieintothird.Johnson&JohnsonandMerckareonsimilar$60-70billion2030salestrajectories,sotheremaybesomeshuffling.NovoandLilly,too,maytradeplacesasbothcontinuetofacesupplyissues.(Novo’sbidtoacquiremanufacturerCatalent,currentlyunderFederalTradeCommission(FTC)review,maypartiallyaccountforWegovy’sleadover

Zepboundintheranking.)Barringmajor

unforeseens,NovoandLillywillremainatthetopofthepilefortherestofthedecadeandlikelybeyond.(Seechapter:Wegovyand

Zepboundarejustthestart).

Figure4:WorldwidePrescriptionDrugSalesin2030:Top10Companies

Source:EvaluatePharma©(May2024)

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WegovyandZepboundareJusttheStart

Thefrontrunnersinthishigh-growthmarketare

established,butthebattleformarketshareisjustgetting

started.

WegovyandZepboundareJusttheStart

Thefrontrunnersinthishigh-growthmarketareestablished,butthebattleformarketshareisjustgettingstarted

Theobesitytherapymarketisstillinitsearly

innings.WegovyandZepboundtogethersoldlessthan$5billionin2023–afractionofthe

$130billionEvaluateestimatefortheoverall

GLP-1spaceby2030.Thebattleformarket

sharehasbarelybegun,and,bytheendofthedecade,therewilllikelybemorethantwointhefight.

SalesoffrontrunnerWegovy(semaglutide),a

householdnamebarelythreeyearspost-launch,areexpectedtotripleoverthenextfiveyears.Yetithasalreadybeentrumped,efficacy-wise,byEliLilly’sZepbound(tirzepatide)andother

developmentcandidates;threeofthetoptenmostvaluablepipelineproductsareobesitydrugs,toppedbyNovo’sownPhase3comboCagrisema.

Zepbound’sextraordinaryforecastannualised

averagegrowthratebetween2023-2030–over90%-isinlargepartduetoitslowerbaseline:

Lillylaunchedinlate2023,morethan18months

behindWegovy.Thedrughasalsoshown

slightlystrongerweightlossdatathanWegovy,likelybecauseithitsnotonlyglucagon-like

Figure5:GLP-1ModulatorSalesbyIndication(2021-2030)

Source:EvaluatePharma©(May2024)

Note:Salesarepredominantlyindiabetes(purple)andobesity(blue)butby2028willincludeMASH,chronickidneydiseaseandchronicheartfailure.

peptide(GLP)-1,asWegovydoes,butalso

agonisesanadditionalweight-lossrelated

hormone,GIP(glucosedependentinsulinotropicpeptide).

ButNovohaslaiddownthegauntlet.When

Zepboundarrived,theDanishgrouplauncheditsPhase3head-to-headpittingnext-in-line

CagrisemaagainstthehighestdoseoftheLillydrug.Cagrisemacombineslong-actingamylinanaloguecagrilintidewithsemaglutide,addinganothermechanismthatmayfurtherpotentiateweightloss.InPhase2,thecombinationledto15.6%averageweightlossat32weeks–

possiblyfasterlossthanZepboundwhich,at72weeks,generatedanaverage20.9%lossatitshighestdose.Thedrug’snetpresentvalueof

almost$80billionmakesitthemostvaluablepipelinecandidate.(SeeFigure7)

OtherBigPharmalikeAstraZenecaarebuying

intothegoldrush,andinvestorsarebusywritingchequesfornext-generationinnovators.Goingforward,precisepercentagesshed–evenoncein-trialcomparisonsareavailable–maybelessimportantthanrouteofadministrationordosing

frequency.WegovyandZepboundareonce-

weeklyinjections.ManycliniciansareexcitedbytheprospectofLilly’soralGLP-1orforglipron,

silvermedalistinthemostvaluablepipeline

projectsbynetpresentvalue.Amgen’sPhase2MariTidemayofferaonce-monthlyinjectableoptionthat’smoretolerable.Theantibody-

peptideconjugateactivatesGLP-1andblocks(ratherthanactivates)GIP.Otherdevelopmentcandidatesseektoimprovethequalityof

weightloss–fatmorethanmuscle–and/ortomaintainlossaftertreatmenthasceased.

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Pipeline

CapturesCNSRevival

Obesityentriesdominate

2030’smostvaluablepipelineproducts,thoughoncology

willremainthebiggestcategory.

PipelineCapturesCNSRevival

Obesityentriesdominate2030’smostvaluablepipelineproducts,thoughoncologywillremainthebiggestcategory

Thetoptenmostvaluablepipelinecandidatesbynetpresentvalueareprojectedtocollectalmost$65billionin2030sales.Threeofthetopfouraddressobesityanditssequellae–

Novo’schart-toppingCagriSema,which

combinesWegovy’sactiveingredientwithanamylinanalogue,andLilly’soralGLP-1hopefulorforglipronand“triple-G”drugretatrutide,

whichhitsGLP-1,GIPandtheglucagonreceptor(GCGR).

ThreeCNSdrugsalsofeatureinthetopten,

reflectingsignificantscientificprogressand

investorinterestinthislargeunder-served

category.BristolMyersSquibb’sschizophreniatherapyKarXT,acquiredviaits$14billion

acquisitionofKarunainDecember2023,

combinesmuscarinicM1/M4receptoragonist

xanomelinewithantagonisttrospiumtocreateamoretolerable–thuseffective–therapy.Thesearen’tnewmechanisms,buttheirintelligent

combinationlowersriskinanotoriouslydifficult

area.ThedrugwasfiledinNovember2023forschizophreniaandAlzheimer’srelatedpsychosisandhasaSeptember2024PDUFA;ifapproveditwouldprovideanoveltherapeuticmechanismforalmostthreemillionpeopleinUSwith

schizophrenia.

Lilly’sdonanemab,ananti-amyloid-beta

antibody,couldbringsimilarrelieftosome

patientswithearly-stageAlzheimer’sandtheirfamilies.AnFDAadvisorycommitteeinJune

Figure6:Top10MostValuableR&DProjects(RankedbyNPV).PhaseIIIandFiled.

Product

Company

TherapyArea

WWProductRevenues($bn)2030

Today'sNPV($bn)

Cagrisema

NovoNordisk

Endocrine/GI

20.2

80.0

Orforglipron

EliLilly

Endocrine/GI

8.3

34.0

Retatrutide

EliLilly

Endocrine/GI

5.0

32.3

VX-121(VanzaTriple)

Vertex

Respiratory

7.7

30.4

MK-3475SC

Merck&Co

Oncology

8.0

19.7

DatopotamabDeruxtecan

DaiichiSankyo

Oncology

4.4

17.5

MariTide

Amgen

Endocrine/GI

2.1

12.4

VX-548

Vertex

CNS

2.9

11.0

KarXT

BMS

CNS

3.1

10.5

Donanemab

EliLilly

CNS

2.5

9.0

Top10

64

256.8

Total

343

957.1

2024votedstronglyinfavourofapproval,whichwilllikelyfollowbeforeyear-end.Ithasn’tbeenanentirelysmoothrideforthedrug:itwas

rejectedinJanuary2023foraccelerated

approval,followingthecontroversialexpeditedapprovalin2021ofBiogen’sAduhelmwhichhassincediscontinued.Peaksalesfordonanemabareexpectedtoreachjustover$5billion,

temperedbysafetyconcerns,diagnostic

challenges,andquestionsoverwhichpatientsaremostlikelytobenefit.Biogen/Eisai’sfront-runnerLeqembi(lecanemab)soldlessthan$20millioninthefirstquarterof2024.

Vertex’sVX-548,aselectivesodiumchannel

inhibitorformoderate-to-acutepain,reportedpositivePhase3resultsinJanuary2024,settingupananticipatedmid-yearfilingforwhatcouldbecomethefirstnew,non-opioiddrugclassforacutepaininovertwentyyears.Evaluate

forecastsnearly$3billionin2030sales,whichmaynotbethepeak.

VertexSeesGoldwith“VanzaTriple”

AnotherVertexdrug,VX-121orthe“vanzatriple”

forcysticfibrosis,wasfiledinearlyMaywithapriorityreviewvoucherthatcouldunlock

approvalwithinsixmonths.Theoncedaily

treatmentcombinescysticfibrosis

transmembraneconductanceregulator(CFTR)proteincorrectorvanzacaftor,similar-acting

tezacaftor(alreadymarketed)andCFTR

potentiatordeutivacaftor,whichisatweaked

versionofanothermarketeddrug,ivacaftor

(Kalydeco).Vertexwillowelowerroyaltieson

thiscombinationthanitdoesonexistingtwice-dailyTrikafta,whichexplainstherushtomarket.Withover$7.5billioninforecast2030sales,the“vanzatriple”alsotopsEvaluate’slistofmost

valuablepipelineorphandrugs.(

SeeOrphan

Drugreport

)

Figure7:Top10TherapyAreasin2030&HistoricandForecastedSalesGrowth

Source:EvaluateOmnium®(May2024)

Note:Circlesizerepresents2030WWsales($bn).ObesitydrugsclassifiedasGI,diabetesdrugsasendocrine.

OncologyWillRemainBiggestOverallCategoryin2030

Forallthebuzzaroundobesity,oncologywill

remainthemostvaluabletherapyareain2030,withover$370billioninforecastsalesacrossallproducts.Thatismorethantwicethetotalsforendocrinology(obesity&diabetes),immunologyandresurgentCNS.

Oncology’s9.8%forecastaverageannual

growthto2030hasslowedslightlyrelativetoits2016-2023CAGR.Butitstillbeatsmost

othercategoriesandiswellabovetotalprescriptiondrugsalesgrowthof7.35%.

Johnson&Johnsonwilltopthecompanyleagueinoncologyby2030,thankstoDarzalex,

followedbyAstraZeneca,MerckandRoche.

Merck’ssubcutaneousversionofKeytrudawill

beoneofjusttwocancerdrugstomakethetopten(thoughitspeaksalesofjustunder$13

billionarehalfthoseoforiginalKeytruda).

Cancer’srelativelypoorshowingonthislist

underscoresthechallengeoffindinggenuinely

Figure8:OncologyCompanyRankings

[excludesGardasil,avaccineforHPVinfection]

Company

2030WWSales($bn)

Johnson&

Johnson

36.8

AstraZeneca

29.5

Merck&Co

25.1

Roche

23.9

DaiichiSankyo

17.8

newKeytruda-sizedtherapies:pan-cancer

targetsarerare,andprecisionmedicineschaseever-narrowermutations.

Still,newermodalitieslikeantibody-drug-

conjugates(ADCs),bi-ormulti-specific

antibodies,radiopharmaceuticalsand

oligonucleotide-baseddrugsareopeningup

moretargetsandtargetingmechanisms,

offeringpipeline-in-a-productopportunitiesoftheirown.

Figure9a:AntibodyDrugConjugate(ADC)salesto2030

Thesecondtoptenmostvaluablecancer

pipelineassetisAstraZeneca/DaiichiSankyo’s

ADCdatopotamabderuxetecan,underFDAandEUreviewforlungandbreastcancer.This,andthepartners’marketedADCEnhertu,pushAZtonumbertwoandtheJapanesegroupupto

numberfiveintheoncologycompanyrankingsby2030,asignificantjumpfromDaiichi’s2023rankingoutsidethetopten.Datopotamab

deruxetecanusesanantibodytodirect

cytotoxictopoisomeraseinhibitorstoTROP2,

Figure9b:Radiopharmaceuticalsalesto2030

highlyexpressedacrossseveralcancers

includingnon-squamousnon-smallcelllung

cancersandhormonereceptorpositiveHER2

negativebreastcancer.Top-lineoverallsurvival

results

fromarecentPhase3trialfellshortof

statisticalsignificance,butdatahadalready

shownasignificantimprovementin

progression-free-survival(PFS).TheADCisalsobeingtestedintriplenegativebreastcancer.

WithadozenADCsalreadymarketed,thisred-hotclasshasattractedtensofbillionsworthofdealsinthelasttwoyears,includingPfizer’s$43billionacquisitionofSeagenandAbbVie’s$10.1billionImmunogenbuyin2023.ADCscan

delivertoxictherapiesinahighlytargetedfashionofferingopportunitiestocombineexistingornewcytotoxicswithdifferentantibodies.(

SeeEvaluatingADCsreport

)

Radiopharmaceuticalsconjugatetoxic

radioactiveisotopestotargetingligands,

offeringsimilarinnovationpotentialtoADCs

andalsoattractinggrowingbuyerinterestandinvestment.BMS’$4.1billionacquisitionof

RayzeBioisthebiggestrecentdeal,butEliLilly,

AstraZenecaandNovartishavealsoeachspentover$1billiononradiopharmaacquisitions

withinthelastsixmonths,respectivelybuying

POINTBiopharma,FusionandMariana

Oncology.SalesforecastsshowasimilarupwardtrajectorytoADCs,albeitatalowerorderof

magnitude–thisisalessmaturefield.

Therapidgrowthofnon-conventional

modalitieslikeradiopharmaceuticals,multi-

specificantibodiesorcellandgenetherapieshelpsexplainwhyworldwidesharesof

biotechnologyversussmallmolecule/

conventionaldrugsalescontinuetoconvergetoward50/50.

Figure10:WorldwidePrescriptionDrug&OTCPharmaceuticalSales:Biotechvs.ConventionalTechnology

Source:EvaluatePharma©(May2024)

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MoreM&AasPublic

Markets

RemainFlat

Dealsprovidealifelineto

cash-strappedbiotechsandprovideBigPharmawitharoutetoaddresslossof

exclusivity.

MoreM&AasPublicMarketsRemainFlat

Dealsprovidealifelinetocash-strappedbiotechsandprovideBigPharmawitharoutetoaddresslossofexclusivity

“Thefirsthalfof2024sawcloseto$100billionworthofBigPharmaM&A,puttingthisyearontracktosurpass2023–itselfoneofthetop-

threestrongestM&Ayearsintwodecades.The

biggestproduct-focuseddealssofarthisyear?Bristol’sCNS-focusedKarunabuy,andAbbVie’sacquisitionofADCcompanyImmunogen,bothwithon-orcloseto-marketproducts.(Figures

belowincludeNovoNordisk’sproposed$16.5billiondealforCDMOCatalent,whichremainsunderFTCreview.)

Figure11:M&ACombinedDealValues($bn)

MoreM&Aislikelyaspatentsexpire,obesity/diabetesdrugrevenuespileupandas

innovationcontinuestoflourish:cuttingedgescienceemergesmoreoftenfromacademiaorbiotechthanfromBigPharma.Smaller,bolt-onacquisitions-likeMerck’sacquisitionsof

HarpoonorAbceutics,orNovartis’purchaseofauto-immunefocusedCalypsoinearly2024-areincreasinglypopularasthey’reeasierto

integrateandlesslikelytofallfoulofastill-hawkishFederalTradeCommission.

Dealsofanysizehavebecomealifelinefor

biotechs,strugglinginalonger-than-usual

down-cycleduringwhichpublicmarketshaveremainedstubbornlyshut.

ThisyearhasseenfewerthanadozenbiotechIPOs,withmanytradingbelowtheirlistprice.CNS-focusedRapportTherapeutics,which

wentpublicinJune,isanotableexception.

ManyothercompanieshavefiledIPO

documentation,buttheoutlookisuncertain–AustralianradiopharmaceuticalcompanyTelixwithdrewaplannedNasdaqlistinginmid-June.

M&Aisreallytheonlyreliableexitoptionfor

investorsandhasturnedBigPharmaintoaveryimportantfriendtobiotechanditsbackers.

Venturecapitalistsareekingoutsupportfor

portfoliocompaniesthatpharmahasn’tbought,butthemoney’srunningshort.Raisingnew

fundsismuchtougher,too,sincemanyofVCs’ownlimitedpartnerinvestorshaveseenpaltryreturns.

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PharmaR&DSpendGrowsMoreSlowly

Risk-aversepharmadisplayscautiousR&Dspendingamidcontinuedregulatoryand

geopoliticaluncertainty.

PharmaR&DSpendGrowsMoreSlowly

Risk-aversepharmadisplayscautiousR&Dspendingamidcontinuedregulatoryandgeopoliticaluncertainty

PharmaR&Dspendisforecasttogrow

significantlymoreslowlyinthesecondhalfof

thedecadethanitdidinthefirst:CAGRofover9%in2016-2023shrinkstobelow3%between2023-2030.CombinedR&Dspendofover$300billionin2024(27%ofsales)fallsto21%ofsalesin2030.

Why?Variousfactorsmaybeinplay.Many

pharmaarestreamliningpipelinesand

operationsascommercialpressurescontinuetobuild.M&Amaybeplayingarelativelygreater

rolegivensomepharmas’needtoreplace

genericisingblockbusters.AIpromisestoboostR&Dandoperationalefficiency,thoughit’stoo

Figure12:WorldwideTotalPharmaceuticalR&DSpendin2016-2030

Source:EvaluatePharma©(May2024)

earlytoquantifytowhatextent.Forecastsofthetechnology’simpactmaybesomewhatoptimistic.

Geopoliticaltensionsalsoadduncertaintyto

spendingplans.TheUSBiosecureActseekstobarbiopharmafirmsfromcontractingwith

ChineseplayerssuchasWuxiAppTecandWuxiBiologics,keyCDMOpartners.Theacthasn’tyetmadeitintolaw,butindustryassociationBIO

recentlyU-turnedtojointhegovernmentinbackingitandexpertspredictthatitwill

eventuallypass.

Continuedmacroeconomicmalaiseaddstoa

moregeneral“risk-off”attitudeamonginvestors,helpingexplainthelacklustreperformancesofarthisyearoftheXBI,abasketofUS-listed

biotechstocks.

InflationReductionActBedsIn

Thenthere’stheInflationReductionAct.PharmaC-suitesarelessvocalaboutitthesedays,eventhoughaspectsoftheAct–includingthe

unequaltreatmentofsmallmoleculesand

biologics–remaincontroversial.Battlescouldre-igniteastheIRAprovisionsrollout,and

forecastsmaychangeasthetrueshapeofthelawisrevealed.Itisdifficulttogaugewhether–orhowmuch–IRAisinfluencingpharma’s

choiceofmodalityand/orindication.

Pricenegotiationsareunderwayforproducts

includingclot-bustersEliquis(BMS)andXarelto(JNJ)anddiabetesmedsJardiance(Lilly/

BoehringerIngelheim)andJanuvia(Merck).TheywillcomeintoeffectinJanuary2026.Atthe

startof2025,Medicarewillselectupto15moredrugsfornegotiations.

Novo’ssemaglutide–theactiveingredientin

OzempicandWegovy–isexpectedtofallintoIRA’scrosshairsbytheendofthedecade;itwasfirstlaunchedin2017.OzempicandWegovy

saleswillbecombinedtodeterminewhentheMedicarecostthresho