It had to happen – Novartis has finally been toppled as the industry’s biggest seller of prescription drugs. The EvaluatePharma World Preview 2016, released today, reveals that the title belt has moved downtown to take up residence in Roche’s headquarters. Basel’s other big pharma company is set to sell $52.6bn worth of drugs in 2022, overtaking Novartis by a mere $100m (see table).
With such a cigarette-paper-thin margin between the two they are likely to continue leapfrogging each other in the years to come, so Roche’s bragging rights might be short lived. There also seems to be little to interrupt Swiss dominance over the next seven years – Pfizer, for instance, would need a really big acquisition to seriously trouble the intercity rivals.
Roche’s narrow lead over Novartis is due to the expectations around the anti-PD-L1 MAb Tecentriq, which was recently approved in bladder cancer and could take advantage of Opdivo’s recent slip in non-small cell lung cancer if trials of a triple combination that includes Avastin are successful. Non-traditional areas of the oncology specialist’s pipeline have also helped it edge past Novartis, with high hopes for the multiple sclerosis treatment Ocrevus.
However, out of all the companies in the top 20 Roche is the one most at risk of biosimilar competition. If the patent dance, which has so far prevented the launch of biosimilar versions of Remicade and Enbrel in the US, does come to an end, Roche’s new pipeline products could struggle to offset the patent loss of the industry's big beasts Avastin, Herceptin and Rituxan, leaving the field open to Novartis.
Novartis might have a lower biosimilar risk and a fairly solid succession plan in the form of Entresto and Cosentyx. But this does depend on the so far sluggish sales of Entresto picking up and achieving the $4.7bn forecast in 2022. In May both the US and EU issued guidelines recommending certain patients to be switched to Entresto from ACE inhibitors or angiotensin II blockers.
Beating sector growth
Perhaps one of the more surprising results to come out of the title race is the rapid advancement of Shire and Celgene. While others in the top 20 are struggling with low single-digit growth in the 2015-22 period Shire is forecast to show compounded annual growth of 12% and Celgene 8%.
Shire owes most of the optimism to its acquisition of Baxalta, and Celgene is continuing to milk its cash cow Revlimid, but also has new stars in the shape of Otezla and Pomalyst. Both Otezla and Pomalyst are small molecules, and while these will continue to dominate all drug sales, biologics are mounting a push.
Percentage sales of biologics are set to increase from 24% to 29% of all drugs by 2022. And, although the number of products is still proportionally small, their value is getting much bigger. According to the world preview, 50% of the value of the top 100 pharma products will come from biologics by 2022, again driven by big products like Humira, Tecentriq and Revlimid.
The rise of biologics and particularly their role in oncology treatments, the industry’s biggest therapy area, should contribute to the 6.3% growth in annual prescription sales the sector is set to enjoy in the run-up to 2022.
But herein lays one of the biggest potential disruptions to growth forecasts. Biosimilars, and their widespread adoption in the US, could have a seismic impact. The once impregnable patent walls that surrounded biologics are slowly being chipped away. Last month saw the US approval of a biosimilar version of Enbrel, and Inflectra, a biosimilar version of Remicade, was approved in April.
If and when these products find a way to market the question will be whether sellside analysts have fully appreciated the threat. European experience of biosimilars has shown strong uptake and much deeper discounts than forecast, especially in markets where there is more than one biosimilar.
There is also strong support for biosimilars in the US from payers and politicians concerned about the rising cost of drugs in healthcare budgets. While the future is looking rosy for the industry, there could be troubling times ahead.