The top 20 global biopharmaceutical companies experienced varied year-on-year (YoY) market capitalisation shifts in 2023 amid the macroeconomic headwinds, steep patent cliffs and the commencement of US drug price negotiations under the Inflation Reduction Act (IRA). Nonetheless, there was a resilient upturn of 1.6 per cent in aggregate market capitalisation from $3.61 trillion on 31 December 2022 to $3.67 trillion on 31 December 2023, reveals GlobalData.
Out of the top 20 players, nine companies indicated positive growth in market capitalisation, with four companies – Lilly (59.2 per cent), Novo Nordisk (51.5 per cent), Vertex Pharmaceuticals (41.4 per cent) and Regeneron Pharmaceuticals (21.8 per cent) – reporting more than 20 per cent YoY growth in market capitalisation.
Alison Labya, Business Fundamentals Analyst at GlobalData, comments, “Lilly witnessed the largest market capitalisation growth of almost 60 per cent to $553.4 billion in 2023, displacing Johnson & Johnson as the top player in the biopharmaceutical industry.”
Lilly’s substantial market capitalisation growth in 2023 was attributed to the positive performance of its injectable synthetic peptide drug Mounjaro (also known as Zepbound for obesity) for the treatment of type 2 diabetes in Q1, Q2, and Q3. Lilly’s growth was further fueled by Mounjaro’s FDA approval for the treatment of obesity received in Q3, with Mounjaro forecasted to reach drug analyst consensus global forecast sales of $4.7 billion for 2023, according to GlobalData’s Drugs Database Pharma Intelligence Center.
Like Lilly, the success of Novo Nordisk’s obesity and diabetes drugs – Wegovy and Ozempic – drove its market capitalisation growth to $355 billion, positioning Novo Nordisk in the top three global biopharmaceutical companies by market capitalisation in 2023.
Vertex moved up by four places in the list with a market capitalisation growth of 41.4 per cent in 2023, fueled by the FDA approval of its CRISPR-based ex vivo cell therapy Casgevy (exagamglogene autotemcel [exa-cel]) with its partner CRISPR Therapeutics.
Regeneron’s market capitalisation growth was attributed to the FDA approval of its high-dose Eylea – a VEGF fusion protein – for eye diseases, which may likely offset standard Eylea’s expected sales decline following looming biosimilar competition.
A total of 11 biopharmaceutical companies saw a market capitalisation decline in 2023, with Moderna (-45.1 per cent), Pfizer (-43.5 per cent), Bristol-Myers Squibb (-31.8 per cent), Johnson & Johnson (-18.3 per cent) and Daiichi Sankyo (-14.1 per cent) registering more than 10 per cent YoY decline in their market capitalisation.
Moderna and Pfizer’s market capitalisation decline was due to the diminishing demand for their COVID-19 products. Furthermore, Pfizer announced in Q4 its oral GLPR1 agonist danugliplon will not progress into Phase 3 trials for the treatment of obesity. Danugliplon was anticipated to rival Novo Nordisk’s Wegovy and Lilly’s Mounjaro in the weight loss drug market, amid efforts to mitigate post-COVID declines in revenue.
Bristol-Myers Squibb reported a market capitalisation decline of 31.8 per cent in 2023, largely due to the reduced sales of its blockbuster blood cancer drug Revlimid resulting from generic competition.
Labya concludes, “In light of the waning demand for COVID-19 products, the biopharmaceutical companies that reaped success in 2023 have shifted to those that have developed weight loss drugs, such as Lilly and Novo Nordisk. However, other biopharmaceutical companies are faced with the imminent patent cliffs and ongoing US drug price negotiations under the IRA, with the CEOs of Merck, Johnson & Johnson and Bristol-Myers Squibb having testified on high drug prices at a US Senate hearing in February 2024.”