Looking back at April’s data digging and analysis

Using EvaluatePharma data, Vantage has described how big pharma R&D spending has shifted, showed how internally discovered novel medicines account for a growing proportion of US approvals, and published quarterly analyses of M&A, IPO and venture capital trends.

In the opening quarter of 2019 biopharma’s M&A bill was boosted by the Celgene buyout, but deal volume dropped, mirroring slowdowns in venture financing and the IPO market. Meanwhile, did you know that this decade Johnson & Johnson has almost doubled the amount it spends on pharma R&D? Or that 72% of US drug sales last year were generated by acquired products, a proportion that has grown substantially over the last decade?

Vantage regularly undertakes revealing and original analyses like these, using data collated by EvaluatePharma. This is a roundup of the articles published this month.

First-quarter sector analyses

Our quarterly look at the biggest share price fallers and risers found a strong showing from the world’s biggest drug makers, although big biotech continued to struggle to win investor support (US big biotechs lag in the opening quarter of the year, April 3, 2019).

Among the mid and small-cap stocks, rare disease specialists and those working on cutting edge therapies dominated the risers, showing that investors remain willing to back some high-risk offerings, driven partly by hopes of a buyout. The likes of Bluebird Bio and Ionis both added more than 50% to their market values across the first quarter, equal to more than $3bn in dollar terms (Topsy turvy times for industry’s mid and small cap stocks in the first quarter, April 4, 2019).

Elsewhere, a look at largest single-day share price gains revealed a list of winners among some of the sector’s smaller companies (First-quarter share price successes, April 5, 2019).

First-quarter share price successes

Turning to other metrics of sector activity, Vantage noted that the huge $74bn Celgene takeout by Bristol-Myers Squibb made for an impressive quarter of M&A in dollar terms. And the acquisitions of Loxo by Lilly and Spark by Roche show that big pharma is willing to pay up when it wants to. However, the M&A market was sluggish in terms of the volume of transactions being announced, at least compared with the past few years (Big-bucks first quarter masks drop in deal volume, April 5, 2019).

Similarly, venture financing activity remained slow, relatively speaking, while in dollar terms the first quarter represented the smallest haul that start-up drug makers had amassed in seven quarters. 2018’s record-breaking total was always going to be difficult to replicate, however; overall the biopharma sector remains awash with cash, and many believe that the latest numbers reflect a return to more sustainable levels of investment (Venture funding slowdown continues in first quarter of 2019, April 10).

The IPO market is also still pretty healthy for biopharma companies, and many pointed to the US government shutdown as a reason for the dip in the first quarter. The opening months of the year are traditionally a quiet period for flotations, though the ability of companies to come to market will be closely monitored in the coming months, for any signs of weakening investor demand (US shutdown dampens first-quarter flotations, April 16, 2019).

1Q 2019 ipos

Outside of quarterly data, Vantage took a look at big pharma R&D spending, as collated by EvaluatePharma. This analysis found that over the past decade Roche and Novartis consistently spent more on R&D than other big pharma groups, while J&J, Abbvie and Astrazeneca notably boosted their budgets (Swiss big pharmas top the research spending tables, April 08, 2019).

A separate analysis looked at the spread of sellside forecast numbers for the sector’s most valuable top pipeline projects, revealing vast differences of opinion about Vertex's cystic fibrosis triplet and Novo Nordisk's oral semaglutide (Splitting the difference on promising pipeline asset predictions, April 23, 2019).

Elsewhere, an analysis of EvaluatePharma’s US revenue numbers suggested that the industry is becoming more reliant on drugs that have been bought or licensed in, for generating blockbuster sales. But at the same time, the FDA is approving more internally developed novel medicines than a decade ago (If you want blockbuster sales, buy them in, April 29, 2019).

US sales by strategy

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