Pfizer, Merck and AstraZeneca led Big Pharma's growth in Q1 but they couldn't match mRNA hotshots

Big Pharma growth rankings Q1 2022

With overall revenue growth of roughly 16% in the first quarter of 2022, the biopharma industry has continued its thorough recovery from the pandemic.

Twelve of the industry's top 23 companies achieved double-digit growth, with the top five—all fueled by huge sales of COVID-19 products—each exceeding a 50% revenue increase compared with the first quarter of 2021.

Emerging mRNA players Moderna and BioNTech bested their big pharma rivals, posting year-over-year revenue increases of more than 200% during the quarter.

But major growth wasn’t limited to companies marketing COVID products. Vertex (22%), Bayer (14%) and Takeda (13%) all delivered double-digit increases without the benefit of a key COVID treatment or vaccine.

In March, at the Academy of Managed Care Pharmacy, keynote speaker Doug Long of IQVIA said that while the pandemic will have lasting impacts on the industry, business is returning to normal.

Some ares of care have yet to fully bounce back however, including endocrinology, rheumatology and oncology, Long said.

Using the traditional measuring stick of growth—comparing sales from the first quarter of this year to the first quarter of last year—produces a rosy picture of the progress of the industry. Another measurement, a so-called quarter-over-quarter comparison, tells a different story.

From the fourth quarter of 2021 to the first quarter of 2022, only four companies among the group delivered a revenue increase.

Some of this can be explained by seasonal effects which are evident in the industry every year. A study by Bernstein in 2017 showed that over a three-year period, drugs sales dropped by an average of 7% from the fourth quarter to the first quarter of the next year.

Consider AbbVie, for example, which delivered a 4% increase in revenue from the first quarter of 2021 but a 9% decrease from the fourth quarter of last year.

“Q1 seasonal headwinds to the top-line are nothing new in biotech, and that’s what drove AbbVie’s Q122 top-line miss," Piper Sandler analyst Christopher Raymond wrote in a note to clients.

But “headwinds” aren’t the complete answer to the sales slowdown, Raymond said in his note, referring to AbbVie’s “ugly quarter.”

Another company with a big swing that can’t be explained solely by “headwinds” was Sanofi, which had a 9% gain from Q1 2021 to Q1 2022 but a 20% decrease from Q4 of 2021 to Q1 2022.

The companies that overcame the headwinds to post revenue increases from the fourth to the first quarter were Merck (18%), BioNTech (15%), Pfizer (8%) and Novo Nordisk (7%).

Joined at the hip by their co-developed COVID-19 vaccine, the reason for the continued sales success of BioNTech and Pfizer is obvious. Meanwhile, Merck’s revenue bump can be attributed largely to sales of its COVID-19 oral antiviral, which reached $3.2 billion in the first quarter of 2022.

So how did investors view the industry in the first quarter? Judging from an aggregate market cap increase of 2.1% during the period, reported by GlobalData Healthcare, their faith in the industry is intact. Fourteen of the industry’s top 20 companies saw market cap increases, led by Bayer (28%), AbbVie (20%), AstraZeneca (19%) and Vertex (19%), according to the analysts.

Several companies that have been propelled by sales of COVID products took a market cap hit including BioNTech (-33%), Moderna (-33%), Gilead (-18%) and Pfizer (-12%) as confidence in the durability of sales of their COVID offerings waned.