Big pharma freshens up
Reliance on established drugs lessened for most large drug makers last year, but staleness is creeping in at Merck and Bristol.
All successful drug franchises must one day fade – the challenge comes in finding replacements. It is encouraging therefore to see that almost all major developers improved on the sales freshness index last year, versus 2019, with a couple of notable exceptions.
This percentage measure is derived from the proportion of a company’s prescription drug sales that come from products more than 10 years old. Scores range widely within the cohort, showing that some groups have much more work to do than others. Take Abbvie, with 74% of 2020’s drug sales derived from drugs at least a decade old, compared with a much fresher Astrazeneca, at 44%.
Abbvie is still very reliant on its mega-blockbuster Humira – the autoimmune antibody contributed 44% of the company’s drugs sales last year – and the big pharma group’s freshness score has not shifted from 2019, when Evaluate Vantage last ran these numbers (Sanofi's geriatric pipeline fails to freshen up, January 22, 2020).
Astrazeneca was at the other end of the scale last time and its performance improved again in 2020. The previous laggard Sanofi, meanwhile, has the huge success of Dupixent to thank for its big shift towards the fresher end of the group.
The French company’s departure from the top of the table leaves Abbvie, Pfizer and Roche as the stalest big pharma groups, and arguably under the most pressure to find new sales sources. Still, last year's spin-out of Pfizer’s legacy products like Lipitor into Viatris, as the Mylan-merged venture is called, means that further change at the top is on the way.
This analysis is merely a snapshot in time, and the ongoing business development efforts at these companies means that these scores can change very quickly, typically via acquisitions rather than a demerger. Key patent expiries can also prompt big changes on this measure.
The levers available to companies, to reduce their reliance on older products quickly, mean that a forward look at freshness comes with the caveat that these numbers are far from set in stone. However, a look at those in danger of staleness, if all remains equal, can be useful in pinpointing those that might be reaching for options.
On projected sales in 2026, based on Evaluate Pharma’s sellside consensus, the coming of age of Merck & Co's and Bristol Myers Squibb’s anti-PD-1 MAbs will soon put those companies in need of new revenues. Among the Japanese groups Astellas could do with a shot of fresh blood, thanks to its reliance on the prostate cancer blockbuster Xtandi.
Those looking more comfortable in the coming years include Novo Nordisk, whose latest diabetes drug is seen growing strongly. And Humira will at some point wash out for Abbvie, which has very successfully launched two new autoimmune products.
Of course freshness is only one metric among many to evaluate these large drug makers. It should also be remembered that these aging franchises are likely to be in their peak profit phase.
But both executives and investors would prefer to see a company’s freshness on a downward trend, or preferably never getting too high, to rule out the need for drastic moves struck in desperation.
|Heading for a big swing on the freshness index?|
|Company||Percentage point swing to 2026*||Biggest driver of increase|
|Merck & Co||34 points||Keytruda turns 10 in 2024|
|Bristol-Myers Squibb||28 points||Equilis turns 10 in 2021; Opdivo turns 10 in 2024|
|Astellas Pharma||28 points||Xtandi turns 10 in 2022|
|Novo Nordisk||-18 points||Ozempic/Rybelsus sales increase|
|Abbvie||-13 points||Rinvoq/Skyrizi sales increase, Humira sales decrease|
|Sanofi||-3 points||Dupixent sales growth|
|*Percentage point change in sales from products >10yrs old, from 2020 to 2026. Source: EvaluatePharma.|