• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Drug Giants Look for Growth Fuel as Older Blockbusters Show Age

Drug Giants Look for Growth Fuel as Older Blockbusters Show Age

Drug Giants Look for Growth Fuel as Older Blockbusters Show Age
May 2, 2019
Bloomberg

The U.S.’s biggest pharmaceutical companies are beginning to prepare for a new and potentially challenging chapter after reaping the rewards of a fruitful period of cancer research that created new blockbusters.

First-quarter earnings reports on Tuesday from three drug giants showed that sales growth for some of the biggest-selling medicines of recent years is beginning to mature and slow — and that companies are on the hunt for new therapies to keep their growth engines roaring.

Merck & Co.’s cancer blockbuster Keytruda brought in $2.27bn in the first quarter, but the immuno-oncology medication’s rapid growth is beginning to moderate. The company said it would cut costs by eliminating jobs and closing plants, as part of what a spokeswoman said were continuing efforts to “ensure our structure supports the future of our business.”

At the same time, Pfizer Inc.’s cancer drug Ibrance, brought to market in 2015, sold $1.13bn, but its growth is also beginning to decelerate. Executives said on a call with analysts Tuesday that Pfizer plans to be “very active” about potential mergers and deals.

Merck and Pfizer were the top-performing stocks in the Dow Jones Industrial Average last year, but lately investors’ enthusiasm has waned. Merck has gained 2.5 percent in 2019 and Pfizer has fallen 6.2 percent, while the Dow has jumped 14 percent.

Additionally, some of the pharma giants’ rivals are already sprinting ahead with makeovers.

Eli Lilly & Co., which also posted results Tuesday, has begun to refashion itself as a cancer-focused maker of innovative new drugs. Earlier this year, it acquired Loxo Oncology for $8bn in a bet on a new class of cancer therapies, and spun off its Elanco animal-health business.

Bristol-Myers Squibb Co. is increasingly leveraged to lucrative cancer drugs, too. Its Opdivo is battling Merck’s Keytruda for supremacy in immunotherapy. And this month, shareholders approved the takeover of Celgene Corp., a maker of blood-cancer blockbuster Revlimid. Celgene also has a CAR-T genetic therapy for cancer in development, as well as partnerships with a series of smaller biotechnology companies chasing innovative treatments.

Price Limits

The pressure to bring new, more unique drugs to market has increased as the debate over drug prices in the U.S. has gotten louder. Drugmakers have had to tame the regular price increases they once relied on to bolster profits, and in some cases have had to offer lower-cost versions of their own products. Pfizer, for example, said it would hike the price of 41 drugs around the start of the year, a more moderate package of increases than in the past.

Now, the industry is looking for new drivers for growth, with an eye toward finding the next big class of cancer treatments. Lilly’s deal for Loxo is a bid to expand in what are known as “targeted therapies” which go after a tumor’s specific genetic markers regardless of where in the body the cancer is located.

“We really like the Loxo acquisition as an opportunity to be a leader in precision medicine,” said Lilly’s Chief Financial Officer Joshua Smiley in an interview. “But we want to do more.”

Lilly has been among the companies under the closest pricing scrutiny due to increases for diabetes medications such as insulin, which is taken by millions of Americans. Smiley said that the company’s diabetes franchise is more vulnerable to Washington pricing headwinds than most classes of drugs.

“We view Lilly’s new drug portfolio as one of the strongest in the industry, and we believe it will make up roughly 60 percent of company sales by 2022, driven by cancer and diabetes,” said Edward Jones & Co. analyst Ashtyn Evans in a note to investors.

Competitive Pressure

Oncology has been one of the hottest areas for drug developers in part because the latest science in immune-harnessing therapies has yielded major advances in some difficult-to-treat cancers. That’s led to drugs like Keytruda and Opdivo, which have been racing each other to win approvals to treat different types of cancer.

While Keytruda sales jumped 55 percent in the first-quarter compared to a year earlier, the pace of growth fell short of expectations — and has moderated from its first years on the market when it had little competition. AstraZeneca Plc, Pfizer and Roche Holding AG all now have similar treatments on the market.

Bristol-Myers has tried to diversify by planning to spend more than $70bn for Celgene, the maker of cancer drugs Revlimid and Pomalyst. Like Keytruda, Opdivo sales also came up short of expectations in the quarter when Bristol reported results this month.

For Pfizer, competition for Ibrance resulted in U.S. sales growth of only 2 percent in the first quarter; as recently as 2017, sales were growing at about 40 percent annually. Though the price of Ibrance was increased by 5 percent, it couldn’t offset the slower growth trend. But boosting prices of other top-selling drugs, including blood thinner Eliquis, cushioned Pfizer’s results.

Chief Executive Officer Albert Bourla said in an interview that the future of cancer treatment is in combinations. Pfizer has recently focused efforts on pairing immuno-oncology drugs with targeted and traditional compounds, however, “it’s been much more difficult to crack the combinations,” he said.

Bloomberg Intelligence analyst Sam Fazeli said in a note following Pfizer’s report that Bourla faces a major challenge. “With increasing dependence on Ibrance, M&A is becoming more likely,” he said.

RELATED CONTENT

RELATED VIDEOS

Technology Healthcare Pharmaceutical/Biotech
KEYWORDS healthcare Pharmaceutical/Biotech
  • Related Articles

    Lilly CEO Sees Supply Squeeze for New Antibody Drug as COVID-19 Cases Surge

    April's Figures for Containerized Imports at U.S. Ports Expected to Show Growth Continues

    Tokyo Olympics Show Years of Tech Decline as Japan Fights for Chips

Bloomberg

Global Oil Trade Shakes Up After Fires at U.S. Fuelmakers

More from this author

Wake up to live
“Supply Chains in Crisis”
updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • INTERIOR OF A CHICKEN FARM, WITH WHITE CHICKENS AS FAR AS THE EYE CAN SEE

    Worst Avian Flu in U.S. History Is Hitting Poultry

    Food & Beverage
  • TWO FINGERS MANIPULATE WOODEN LETTER BLOCKS TO TURN FROM SHOWING THE WORD RECOVERY TO RESILIENCE

    Five Challenges to Supply Chain Resilience in 2023

    Supply Chain Visibility
  • A PERSON HOLDS UP A TABLET COMPUTER IN A WAREHOUSE, SUPER-IMPOSED BY A GRAPHIC SHOWING A COMPLEX WEB OF SUPPLY CHAIN ELEMENTS

    Three Post-Pandemic Actions for Repairing Global Supply Chains

    Data Management (Big Data/IoT/Blockchain)
  • A MAN IN A SUIT SHAKES HANDS WITH A WOMAN IN A HARD HAT, NEXT TO A STACK OF CONTAINERS

    Three Procurement Technology Evolutions for 2023

    Sourcing/Procurement/SRM
  • The blank stare of a child's eye who is standing behind what appears to be a wooden frame

    The Alarming Continued Rise of Modern Slavery in Supply Chains: How Procurement Can Help Reverse the Trend

    Sourcing/Procurement/SRM

Digital Edition

Scb nov 2022 sm

2022 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing