Pharma finds a way to gain weight

In the second quarter it paid to be a leading obesity company. As for Covid, not so much.

If 2023’s first quarter painted a somewhat dispiriting picture for biopharma share price performance the second has brought better news. One major factor lies behind the enthusiasm: resurgence in the promise of treatments for obesity, which have resulted in the valuations of Lilly and Novo Nordisk putting on a joint $149bn so far this year.

There were isolated successes in biopharma’s lower ranks too, with the likes of Apellis, Roivant and Immunogen standing out. However, there is no avoiding the fact that the “good times” of Covid are over, with Pfizer, Moderna and Biontech sitting on a year-to-date market cap decline of $114bn.

That much was already clear three months ago, of course, and the second quarter has seen the waning of Covid erase a further $35bn from the valuations of these three groups. Investors should, however, take heart in the significant, albeit isolated, positive second-quarter swings in the stocks of several other big groups.

This analysis was constructed from the around 500 listed, global biopharma companies covered by Evaluate Pharma that were worth at least $250m at the start of 2023. These stocks will be tracked by Evaluate Vantage over the year – an analysis of the performance of four cohorts, grouped by market cap, was published yesterday (Stock market strife subsides in second quarter, 12 July 2023).

Biopharma's biggest stock market winners in H1 2023
Company H1 share price chg H1 market cap chg ($bn) Market cap at 30 Jun 2023 ($bn)
Big pharma
Lilly 28% 97.6 445.2
Novartis 11% 16.5 211.6
Sanofi 9% 12.9 134.6
Large cap ($20bn+ market cap)
Seagen 50% 12.2 36.1
Vertex 22% 16.5 90.6
Novo Nordisk 20% 51.7 356.2
Mid cap ($5-20bn market cap)
Apellis 76% 4.9 10.6
Legend Biotech 38% 4.1 12.5
Roivant Sciences 26% 2.1 7.7
Small cap ($250m-5bn market cap)
Immunogen 280% 3.2 4.3
Reata 169% 2.2 3.4
Schrödinger 167% 2.0 3.1
Source: Evaluate Pharma. Companies are assigned these groups based on year-end 2022 market caps, and remain in the same group for the rest of the year.

Obesity enthusiasm reached a high in the second quarter, with Lilly’s retatrutide and Mounjaro set to fight Novo’s Wegovy for a market thought to be worth billions of dollars.

Amazingly, Lilly now stands as biggest big pharma company, ahead of even Johnson & Johnson, as weight loss provided the cherry on the cake to a win in Alzheimer’s disease and a canny oncology acquisition. Novo overtook the likes of Astrazeneca some time ago, and is established among the industry’s biggest hitters.

Among other big players, Novartis enjoyed its qualified win in the Natalee study at Asco, while Seagen climbed on being bought by Pfizer. Once companies are acquired they come out of this analysis, but the Seagen deal has yet to close, and there is still probably an outside chance of it being scuppered by antitrust concerns.

Meanwhile, Apellis and Reata celebrated surprising approvals, while Roivant has been propelled by hopes for its TL1A-targeting ulcerative colitis asset RVT-3101, after Merck & Co’s $11bn takeover of Prometheus, which has a similarly acting project, earlier this year.

As for the smallest biotechs, Immunogen is riding the crest of a wave generated by knockout data for Elahere, which now seems destined for full US approval, while Schrödinger is the beneficiary of positive sentiment behind its computerised approach to designing pipeline projects with novel mechanisms of action.


On the debit side, the Covid casualties were joined in the second quarter by Abbvie, hit by disappointing sales of Skyrizi and Rinvoq just as its blockbuster Humira is facing loss of patent exclusivity, and Bristol Myers Squibb, which has fallen slowly, possibly over the threat to Sotyktu of new oral psoriasis drugs.

Ascendis was punished heavily for deficiencies identified in its US filing for TransCon PTH, while continued loss of sentiment in China-based drug developers hit groups including Wuxi and Sino Biopharmaceutical. Possibly eclipsing this is the clinical blow-up suffered last month by Fibrogen, a setback preceded by other disappointments.

And for Esperion clinical disappointment was followed by a dispute over a milestone the group says it is owed by Daiichi Sankyo. With the biotech off 78% since January investors seem to have decided how likely it is that this will ever be received.

Biopharma's biggest stock market losers in H1 2023
Company H1 share price chg H1 market cap chg ($bn) Market cap at 30 Jun 2023 ($bn)
Big pharma
Pfizer -28% -80.6 207.1
Abbvie -17% -48.1 237.7
Bristol Myers Squibb -10% -18.6 134.3
Large cap ($20bn+ market cap)
Wuxi Biologics -37% -12.0 20.2
Moderna -32% -22.7 46.3
Biontech -28% -10.4 26.0
Mid cap ($5-20bn market cap)
Halozyme -37% -2.9 4.8
Ascendis Pharma -27% -1.9 5.0
Sino Biopharmaceutical -25% -2.8 8.2
Small cap ($250m-5bn market cap)
Fibrogen -83% -1.2 0.3
Altimmune -78% -0.6 0.2
Esperion Therapeutics -78% -0.3 0.1
Source: Evaluate Pharma. Companies are assigned these groups based on year-end 2022 market caps, and remain in the same group for the rest of the year.

Note: Evaluate Vantage’s universe is constructed from pure-play drug developers listed globally, with most sited in the US, Europe or Japan. Chinese developers must have a dual ex-China listing for inclusion. The big pharma cohort consists of 11 companies: Pfizer, J&J, Merck & Co, Lilly, Abbvie, Roche, Astrazeneca, Novartis, Bristol Myers Squibb, Sanofi and GSK.

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