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Are Big Pharma giants getting the right ROI on their R&D investments? A visual exploration

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While annual reports show broadly similar R&D strategies among Merck & Co., Pfizer, Johnson & Johnson and AbbVie, their 2020–2023 financial metrics reveal a concerning trend. Merck & Co. may be the new top dog of Big Pharma, but the firm’s 1.4% revenue growth in 2023 represents a significant slowdown. Pfizer’s 41.7% revenue decline from its COVID-inflated $100.3 billion peak in 2022 is even more stark. Similarly, J&J’s modest 4.2% growth and AbbVie’s 6.4% revenue dip also signal a departure from previous patterns.

In raw numbers, R&D spending in the pharmaceutical industry has surged over the past few decades, jumping from about $30 billion across the industry to more than $200 billion annually by the 2020s. Despite record-breaking R&D spending hitting $161 billion in 2023, marking a nearly 50% increase since 2018, as IQVIA has noted, …

Big Pharma shakeup: This chart reveals the new top dog of 2023

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In the Aesopian fable, the tortoise’s steady focus and persistence overcomes the hare’s bursts of speed. 2023 saw a similar shift in the pharma sector. While Pfizer, thanks to blockbuster COVID vaccine sales, rocketed to unprecedented heights in 2022 surpassing $100 billion in revenue, its fortunes reversed in 2023. As COVID product demand plummeted, Pfizer’s revenue nosedived to $58.5 billion, even resulting in a quarterly loss in Q3. Conversely, Merck’s consistent, diversified approach propelled it past Pfizer to become the Big Pharma leader in 2023, with a revenue climb to $60.115 billion, making it the top Big Pharma of 2023 — by a hair. While Merck’s revenue was $60.1 billion, Pfizer’s was only $1.6 billion behind.

This article will analyze the current top five Big Pharma firms, analyzing their successes and…

Pharma M&A activity primed for another high-flying year in 2024

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Despite challenging interest rates and regulatory environment, pharma M&A activity surged in 2023 with deal volume up more than 30% from the prior year based on a review of more than 200 acquisitions since 2018. The total disclosed deal value in 2023 also more than doubled the prior year’s tally to surpass $100 billion. While the pandemic boosted research into areas such as mRNA, it had something of a chilling effect on M&A. As pharma companies begin to put the pandemic in the rearview mirror, M&A activity has gained momentum.

Analysts upbeat on biopharma M&A activity in 2024

According to PwC, the M&A activity in the pharmaceutical and life sciences sector could continue humming in 2024. Despite a challenging interest rate environment, PwC projects the sector to see deal values ranging from $225 billion to $275 billion. Deal volume in 2023 was in line with pre-pandemic levels. …

A glimpse at Big Pharma’s upper echelon in the first three quarters of 2023

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In 2023, demand for GLP-1 receptor agonists such as Lilly’s tirzepatitde and Novo Nordisk’s semaglutide surged just as demand for COVID-19 therapies waned. As a result, Novo Nordisk had 33% growth at constant exchange rates over the first nine months of the year. Similarly, Lilly experienced a 37% jump in revenue in the third quarter, with strong sales of Mounjaro (tirzepatitde) helping lead the way.

Below is a roundup of the year-to-date revenue for several Big Pharma companies that have publicly shared third-quarter financial data. For J&J and Roche, the companies’ non-pharma sales were excluded. Merck’s figures also include sales from its veterinary business.

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Quantum computing promises new frontier in drug discovery and bioinformatics

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Quantum computing — described by pop astrophysicist Neil deGrasse Tyson as “computing with atoms” — is an emerging technology with a potential for immense computational speed and power. For some problems, quantum computers can be exponentially faster than classical computers, while for others the speedup may be more measured. The promise for drug discovery could be significant.

But the promises of quantum computing extend beyond mere increases in data processing horsepower. In an era dominated by generative AI models, which rely heavily on massive volumes of data for predictions, a different perspective emerges. Kristin M. Gilkes, EY Global Innovation Quantum Leader, underscores this shift in perspective. “I don’t believe we’ll need as much data with quantum computing,” she said. Gilkes sees the focus is shifting towards becoming data-centric, prioritizing the right set…

How 11 Big Pharma companies are using AI

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Pharma companies are ramping up their reliance on AI in drug discovery, clinical trials and manufacturing. Bloomberg recently frame the technology as providing a $50 billion opportunity to the sector. GlobalData noted that the pandemic played a role in stoking interest in AI. But given the hype often surrounding the technology, it can be difficult to gauge actual impacts and outcomes of such initiatives, which largely remain undisclosed.

The pharma industry faces mounting pressures to discover and develop new drugs faster and at lower costs. AI has emerged as a promising tool to help overcome long-standing challenges like high failure rates, lengthy development timelines, and resource inefficiency.

While pharma companies are making big bets on AI, the actual impacts and outcomes of many initiatives remain largely behind the scenes. Still, there are some examples that provide…

Big Pharma, it’s time to talk: Investors demand transparency on patent thickets

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Pharmaceutical companies are running into pushback for their “patent thicket” tactics, designed to maintain exclusive rights and delay cheaper generics. The Financial Times reported that an ethical investor coalition is pushing for greater transparency and urging major drug makers to disclose their patent strategies.

Unraveling the patent thicket mystery

Patent thickets are a common intellectual property tactic in pharma. Companies file numerous patents beyond the primary one for a specific compound. Critics say this cunning approach stalls the introduction of generics even after the 20-year exclusivity of primary patents expires. Consequently, drug prices remain high, and affordable medications remain out of reach for many.

Drugs like Humira (adalimumab) and Keytruda (pembrolizumab), for example, have experienced extended periods without biosimilar or generic competition, lea…

Big Pharma companies trimming pipelines in 2023

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Several companies, including GSK, Janssen, Novartis and Pfizer, have announced that they are cutting their pipelines as they release their full-year 2022 financial results. The following are the drugs removed from these companies’ pipelines.

Bristol Myers Squibb

Cendakimab: Bristol Myers said it would no longer develop its atopic dermatitis antibody cendakimab, which had completed a Phase 2 study. Although the study met its primary endpoint, the treatment landscape for atopic dermatitis is crowded, and cendakimab does not offer a significant advantage over these existing options, according to the company’s chief medical officer, Samit Hirawat.

GSK

GSK3915393: GSK said in a quarterly earnings call that it had pulled the plug on GSK3915393, an inhibitor of transglutaminase 2 (TG2). The company had believed GSK3915393 held potential for celiac disease. The drugR…

Why Big Pharma is partnering with startups as it becomes more data-driven

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Big Pharma’s ability to innovate has grown in recent years, and the industry’s increasing reliance on data could help it sustain momentum in the future.

While McKinsey notes that the industry has been relatively slow in adopting technologies such as AI and automation, the industry is growing more tech-savvy.

“The acceptance of data is picking up across the industry,” said David Harel, co-founder and president of CytoReason, an Israeli startup working with six of the top ten pharma companies.

At the same time, pharmaceutical research is headed in a much more collaborative direction where partnership and licensing are common, said Ed White, chief analyst and VP of IP and innovation research at Clarivate.

The pharma industry has traditionally had a large amount of data to tap in drug discovery and development, but the volume of data in the fi…

As interest in psychedelic medicine grows, Big Pharma sits on the sidelines

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While Big Pharma has yet to embrace psychedelics as potential treatments for depression and other psychiatric disorders, interest in psychedelic medicine is building.

Earlier this month, Nature Medicine published a Phase 3 study indicating that psychotherapy assisted with methylenedioxymethamphetamine (MDMA) was a more effective treatment for post-traumatic stress disorder (PTSD) than therapy alone. The study authors concluded that MDMA yielded a larger effect size than antidepressants Zoloft (sertraline) and Paxil (paroxetine).

The FDA granted Breakthrough Therapy Designation to MDMA-assisted psychotherapy for PTSD in 2017. Approval could come in 2023, according to The New York Times.

[Related: Debate series considers the therapeutic promise and pitfalls of psychedelics]

Last month, NEJM summarized the results of a Phase 2 study that found that psil…

Debate series considers the promise and pitfalls of psychedelics

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Intelligence Squared, the organizers of a popular debate series, recently asked a panel of experts whether psychedelics should be legalized. There was considerable overlap between the factions arguing in favor and opposition of that motion, reflecting the growing interest in psychedelic compounds for therapeutic applications. But the two camps were split when it came to the best regulatory model for psychedelic drugs.

“I advocate strongly that [psychedelics] be allowed to be studied for medical research to see what their therapeutic indications are and how they can help us to understand the brain and the mind,” said Dr. Jeffrey Lieberman, the chair of Columbia University’s department, who argued against the motion.

Rick Doblin, executive director of the Multidisciplinary Association for Psychedelic Studies (MAPS), argued for a more permissive approach that would a…