Pharma Value Will Surge On Number And Quality Of New Products – EvaluatePharma

EvaluatePharma’s 2013 industry portrait, released June 24 at the DIA annual meeting in Boston, predicts a rebound in pharma sales with near 4% growth out to 2018.

BOSTON – An uptick in the quality of products being approved, not just the quantity, should lead to sustained growth for the biopharmaceutical industry, according to an industry portrait from EvaluatePharma.

With 45 novel drugs and biologics approved by FDA, 2012 was a boom year (Also see "An NME Surge After The Patent Cliff? Reinvention Of R&D Starts Paying Off In 2013 New Product Candidates" - Pink Sheet, 20 Feb, 2013.). But what EvaluatePharma stresses is that the quality of those products was significantly better than in previous years, and their value will help drive a return to sustained growth for the industry out to 2018.

Evaluate released Returning To Growth, its annual World Preview report, at the Drug Information Association annual meeting in Boston June 24.

Along with European austerity pressures, the patent cliff hit the pharmaceutical industry hard in 2011-2012, with the loss of $38 billion in sales from venerable products such as Pfizer Inc.’s Lipitor, which alone accounted for $5.6 billion of the slide. In its report last year, Evaluate accurately predicted an “unprecedented” fall in worldwide prescription drug sales that can now be confirmed at 1.6%, leaving sales for the year at $714 billion.

That was the first time the industry, which really got its start right after World War II, failed to make a gain in sales, Evaluate CEO Jonathan de Pass, said in an interview on site. In his 30 years following the industry, “I’ve never known a year when the sales have actually been down from the year before,” he said. But though sales growth may remain lackluster through most of 2013, hovering around 0.4%, Evaluate now predicts growth will return by the end of the year and gain momentum, reaching $895 billion by 2018

Pharma sales will grow an average of 3.8% a year between 2012 and 2018 and reach $895 billion globally, EvaluatePharma predicts.

Sustained growth should return from the end of a sluggish 2013, with continued recovery beginning in 2014 at a compound annual growth rate of 3.8% per annum between 2012 and 2018, according to the EvaluatePharma report, which based the projection on the consensus forecast for the top 500 pharmas and biotechs globally.

One contributor to stability is the growing number of biotechnology products entering the market. Although an additional $230 billion in sales is at risk from patent expires between 2013 and 2018 (another big batch is due in 2015), the market predicts loss of sales to biosimilar competition to be limited, Evaluate said. Through it all, AbbVie Inc.’s Humira (adalimumab) is projected to maintain is place as the world’s top selling product in 2018, with $12.78 billion in sales. Key composition-of-matter patents on adalimumab in the U.S. expire in 2016.

The decline in biologic sales due to patent expirations won’t be as sharp as with the traditional chemistry products, which “plummet,” de Pass said. Although the picture for biosimilars is far from clear, particularly in the U.S., biological products are expected to experience “much-reduced sales erosion from biosimilar competition than traditional small molecules,” according to the report.

On the contrary, according to the report, sales of biologics will account more than 50% of the top 100 prescription products marketed in 2018. “We have reached the tipping point,” said de Pass.

Valuable Assets Approved

Since the 2012 report was released, 14 of the most valuable R&D projects in the industry pipeline have been approved, effectively unleashing $85 billion of value from the pipeline into the market, and it is analyst projections for the worth of those compounds over the next five years that paint EvaluatePharma’s rosy picture. The net present value of those products already has increased 59%, in part because the approval itself removes risk but also because equity analysts have upgraded their sales projections for the compounds (Also see "Are The 90s Back? Oncologics Drove FDA’s 2012 Novel Approval Count To 15-Year High" - Pink Sheet, 23 Jan, 2013.).

Blockbusters Approved In 2012

These drugs are projected in aggregate to reach $15.8 billion in sales in the U.S. alone by 2017.

• Eliquis (apixaban) – Bristol-Myers Squibb/Pfizer
• Stribild (elvitegravir/cobicistat/emtricitabine/tenofovir disoproxil fumarate) – Gilead Sciences
• Kalydeco (ivacaftor) – Vertex Pharmaceuticals
• Xeljanz (tofacitinib) – Pfizer
• Kyprolis (carfilzomib) – Onyx Pharmaceuticals

Looking ahead, the top 20 candidates in the late-stage pipeline are currently valued at $287 billion, about 10% of which is carried by Gilead Sciences Inc.’s hepatitis C therapy sofosbuvir, which has a Dec. 8 PDUFA date. Gilead is gearing up to commercialize what might easily be the most valuable asset in the global pharma pipeline today (Also see "Gilead Preps HCV Sales Force For Sofosbuvir Approval" - Pink Sheet, 12 Jun, 2013.). According to EvaluatePharma, sofosbuvir is forecast to sell over $7 billion in 2018 and is currently valued at $29 billion.

In parallel with the excitement sweeping the oncology community over immune checkpoint modulators, Evaluate named Bristol-Myers Squibb Co.’s Phase III anti-programmed death-1 antibody BMS-936558 the second most valuable product in the industry pipeline, with projected worldwide sales of $1.869 billion in 2018 (Also see "Immune Checkpoint Blockade: The New Big Idea In Cancer" - Pink Sheet, 29 Apr, 2013.).