Amgen, BMS and Merck have the most exposure as Big Pharma eyes $183B patent cliff: analyst

15 Jul 2024
www.fiercepharma.com
AcquisitionPatent Expiration
Biopharma has $183 billion of revenue at risk because of upcoming losses of exclusivity. But the industry has $383 billion of firepower to address the shortfall through M&A, according to Morgan Stanley analysts.
Biopharmaent cliffs are looming for many of biopharma’s top-selling products, the industry has enormous capacity to respond as “conditions for M&A are favorable,” according to a research note from Morgan Stanley.
In the July 11 report, the analysts calculate that products losing exclusivity through 2030 are generating a combined $183.5 billion in annual sales, with Amgen, Bristol Myers Squibb and Merck facing the most exposure of their revenue.
Meanwhile—citing company financial reports and data from Visible Alpha and FactSet—Morgan Stanley estimates that Big Pharma has $383.1 billion of firepowerAmgenlaBristol Myers SquibbThe cMerckies sitting on the most dry powder are Johnson & Johnson, Merck and Novo Nordisk, the analysts said.
"We continue to see the conditions as generally favorable for bolt-on M&A as large-cap pharma companies have balance sheet capacity and a need to acquire outer-year revenue," the Morgan Stanley team, led by Terence Flynn, Ph.D., wrJohnson & JohnsonMerckNovo Nordisk
Per Morgan Stanley’s metrics, J&J is in excellent shape as just 33% of its revenue is exposed to patent expirations through 2030, compared to an industry average of 38%. Other biopharma companies in good positions regarding their patent cliffs are Vertex (6%), Gilead (24%), AbbVie (29%), Eli Lilly (31%) and Pfizer (33%).
At the other end of the list, J&Jen has the most revenue at risk at 67%, with its top four products on the clock. Bone cancer drugs Prolia and Xgeva, which combined for sales of $6.1 billion last year, are due for patent expirations over the next tVertexrs. EnbGilead3.7 billAbbViend OtezlEli$Lillyillion) alsPfizerset to lose exclusivity by the end of the decade.
Amgen, of course, has already Amgen a major step in addressing the patent cliff with its $27.8 billion acquisitionBone cancer, which was compleXgevan October and brought potential blockbusters in Tepezza for thyroid eye disease, Krystexxa for gout and UpliznEnbrela rare neurologic diOtezlaOtezla.
Amgenon the patent cliff exposure list is BMS, with 63% of its revenue at risk. Blood thinner Eliquis, which generated $12.2 billion last year, and cancer drug Opdivo ($9 billion) are on the clockTepezza nextthyroid eye diseaseotKrystexxar tregoutnt, RUplizna ($6.1 billineurologic disorderst its U.S. exclusivity.
BMS also has addressed its cliff, acquiring Karuna, Mirati and RayzeBio in a three-month splurge at the end of 2023. Last month, BMS CEO Chris Boerncancerd thatOpdivoompany’s still scouting out deals.cancerRevlimid
BMSspite these transactions, there remains sKarunacaMirati expoRayzeBior many of these companies," the analysts wrote. "Further, BMSertainty related to the FTC's approach to pharma transactions, which we believe may have impacted deal appetites in the 2022-2023 period, seems to have largely subsided at this point following the closure of larger transactions in recent months."
It’s no surprise that Merck is on the list, with 56% of its revenue exposed to patent expirations. Most of that comes from mega-blockbuster cancer drug Keytruda, which generated $25 billion in sales last year, accounting for 42% of the company’s total haul. Keytruda is set to lose its exclusivity in 2029.
"Merck continues to haMercke combination of need to offset the Keytruda LOE and meaningful balance sheet capacity," the Morgan Stanley analycancerote. "KeytrudaBMS and Pfizer have all recently transacted, so we see these companies as more likely to be acquirKeytruda the medium term."
For more details,please visit the original website
The content of the article does not represent any opinions of Synapse and its affiliated companies. If there is any copyright infringement or error, please contact us, and we will deal with it within 24 hours.
Organizations
Indications
Targets
-
Drugs
AI Agents Built for Biopharma Breakthroughs
Accelerate discovery. Empower decisions. Transform outcomes.
Get started for free today!
Accelerate Strategic R&D decision making with Synapse, PatSnap’s AI-powered Connected Innovation Intelligence Platform Built for Life Sciences Professionals.
Start your data trial now!
Synapse data is also accessible to external entities via APIs or data packages. Empower better decisions with the latest in pharmaceutical intelligence.