A couple different stories from the Fierce publications today. The first (based on EY's report) indicated that overall R&D spend for biotechs in 2013 was up by 14% to $29.1 B (unfortunately sales only up 10%). Remarkably the spend was up 20% in the US biotechs. Of course, funding was up too. Biotechs in North America and Europe raised $31.6 B -- a 10% jump -- as the IPO and VC markets recovered for them. This was the best haul since 2003. Unfortunately, for the moment, the drug failure rate in the VERY expensive phase III remains at more than 40%.
A second article gives Evaluate Pharma's prediction that BIG Pharma will lose market share through 2020 even as the overall market grows 5%. They predict however that companies like Eli Lilly and AbbVie will actually fall out of the top 10 companies by sales. They will be replaced by Gilead and Novo Nordisk. Further the number of Big Pharma players with as much as 5% total share will fall from today's 5 to only 2. The real movers/winners? EP predicts only 4 companies will achieve greater than 8% CAGR during that span and they are - BMS (8%), Biogen Idec (13%), Gilead (12%) and Novo (8%). Biogen is expected to add a whopping $8.4 B to its current $5.0 B and Gilead will add $12.9 B to its current $23.7 B.
Other big guys will have pedestrian performance in comparison -- Pfizer ($2.8 B), AZ ($2.5 B) and Merck ($2.1 B). The AZ number here sure doesn't track with management's projection in fighting off the Pfizer bid. Even Pfizer plus AZ here is only an $5.3 B increase for the combined company. Not too exciting if you believe this forecast.
Posted by Bruce Lehr June 24th 2014.