'Sluggish' global biopharma market will experience growth again in 2014, says Evaluate Pharma

Research firm's annual World Preview sees brightening outlook in drug approvals and R&D productivity

The annual World Preview, Outlook to 2018, from Evaluate Pharma (US HQ: Boston, MA) projects the global market to grow only 0.4% this year, to $717 billion—following the “unprecedented” shrinkage of 1.6% last year, to $714 billion. Then, the industry will experience a compound annual growth rate (CAGR) averaging 3.8% through 2018, reaching $895 billion. (Evaluate’s analysis and projections are based on a variety of current market data, plus in-depth analyses from financial analysts; the firm tracks the 500 “leading” pharma and biotech companies worldwide.)

One revealing insight from the analysis is that the biggest year for sales declines from patent expirations was 2012, when $38 billion was removed from the market. Evaluate measures both potential and actual sales losses; while there is a potential loss of $65 billion in 2015 from expirations, it forecasts an actual loss of only $16 billion in that year. And the main reason for that disparity will be the disconnect between expirations for biotech products, and the smaller likelihood that they will be replaced by lower-priced biosimilars. In fact, biotech products (bioengineered vaccines and biologics) were 21% of the worldwide market for prescription and OTC product sales in 2012, and will increase to 25% by 2018. (Also, 51% of the sales of the top 100 products in 2018 will be biotech.)

Other tidbits from the report:

  • Pfizer, currently the No. 1 global manufacturer, will experience a net growth of 0% over the next five years, and will drop to third behind Novartis and Sanofi by 2018. Roche and Pfizer will be neck-and-neck for the No. 3 slot at that time.
  • Sofosbuvir, a hepatitis C treatment that Gilead Sciences acquired by buying Pharmasset in 2012, is projected to be the product with the highest net present value (NPV) of any current pipeline product—over $28 billion. The drug is in Phase III trials currently. If it is successfully commercialized, it will have justified the high premium Gilead placed on Pharmasset, buying it for a near-100% premium of $11 billion.
  • Global R&D spending by top companies will grow an average 1.4% CAGR through 2018. The cost per new molecular entity has dropped for two years running, and is currently $3.0 billion, indicating a heightened productivity (or better risk analysis of R&D) by the industry.
  • The fastest-growing therapeutic area over the next five years will be anti-coagulants, rising 11.5% CAGR to a projected $15.3 billion. On the other hand, oncology is by far the current largest therapeutic class, worth $68 billion in 2012, and rising to $114.4 billion by 2018 (9.0% CAGR).

The report was released at the annual DIA national meeting (Boston, June 24), and is available from Evaluate for download at this location.