Lilly leads the big pharma pack on pipeline value

Huge hopes for diabetes and Alzheimer’s projects swell Lilly’s pipeline valuation, with Glaxosmithkline and Abbvie looking bare in comparison.

Lilly is the best-performing big pharma stock so far this year, and a look at the company’s pipeline helps to explain why. Tirzepatide and donanemab, potential treatments for diabetes and Alzheimer’s, rank as the sector’s most highly valued R&D projects, leading other developers’ assets by a substantial margin.

This is based on net present value as computed by Evaluate Pharma, according to sellside consensus. The combined value of Lilly’s pipeline comes in at $45.6bn on this measure – thanks mostly to the previously mentioned assets – and double the NPV of Roche’s pipeline, which sits at second place among big pharma.

This analysis is only a snapshot in time, of course, and it should be remembered that a company that has recently launched some big products could look artificially weak. Abbvie, for example, which sits at the bottom of the table, is rolling out two new immunology products, Skyrizi and Rinvoq, both of which are expected to become mega-blockbusters.

Reasons for Glaxosmithkline’s low ranking are harder to find, however. The company is under huge pressure to reinvigorate its pipeline, and has recently attracted the attention of activist shareholders agitating for action.

With an NPV of $1.6bn, Glaxo’s RSV vaccine is currently considered the UK developer’s most promising project, by the sellside at least; the company must hope that starting a pivotal programme in the middle of a pandemic does not derail progress.

This asset comes nowhere near the top of the list of the most highly valued individual projects, however. Here, Lilly’s lead is clear, although perhaps not all would agree with donanemab’s NPV. Confirmatory data, not due until 2023, are required to judge the amyloid-beta antibody’s chance of getting to market.

But the sellside is not typically known for its restraint. Evaluate Pharma’s 2026 sales consensus for donanemab has surged to $3.1bn since the phase 2 Trailblazer-Alz data emerged earlier this year. The fate of another Alzheimer’s project, Biogen’s aducanumab, could determine whether donanemab’s forecasts move once again.

Given that pivotal programmes for Roche’s anti-Tigit antibody and Sanofi’s BTK inhibitor have only just got under way – and confirmatory data are some years away – it also surprising that these assets rank so highly. Both potentially address huge markets, although much evidence still needs to be seen.

This analysis is restricted to traditional big pharma companies only, and highly valued assets sit in pipelines outside this cohort. These include Argenx’s FcRn MAb efgartigimod, with an NPV of $9.6bn; Amgen’s Kras inhibitor Lumakras, with an NPV of $8.7bn; and an NPV of $8.6bn for Allakos’s rare disease play lirentelimab.

It will take many years to determine whether any of these assets are worthy of the numbers. But it is not implausible that those still in the hands of smaller developers are attracting the attention of certain big pharma players in need of pipeline expansion.

Big pharma's most valuable R&D projects*
Project Company Mechanism of action NPV ($bn)
Tirzepatide Lilly GIP/GLP-1 dual agonist for type 2 diabetes and other metabolic conditions, to be filed by YE 2021 18.7
Donanemab  Lilly Anti-beta amyloid antibody for Alzheimer's; two ph3 trials ongoing 17.9
Deucravitinib Bristol Myers Squibb Tyk2 inhibitor for psoriasis and other autoimmune conditions, to be filed this year 9.1
Tiragolumab Roche Anti-Tigit antibody for lung and other cancers; pivotal programme recently got under way 5.8
SAR442168 (tolebrutinib) Sanofi BTK inhibitor for MS (via Principia takeout); pivotal programme recently got under way 5.5
Source: Evaluate Pharma. NB: *all in phase 3.

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