Biopharma investors have weathered some uncertain times in recent years, thanks in part to political and pricing pressure, but in 2018 the value of their holdings is largely growing. Several big drugmakers have posted double-digit share price gains in the first nine months of the year, as detailed in a report by Vantage, while other companies have seen only modest declines.
Among a group of big pharma companies, Lilly was the top share price gainer in the first nine months at 27%, followed by 26% for Merck and 22% for Pfizer. The increases meant the largest market cap leap for Pfizer at $41.8 billion, followed by $36.9 billion for Merck and $22.3 billion for Eli Lilly. As Vantage reported, the Nasdaq Biotechnology Index was up 15% in the first nine months, while the S&P Pharmaceuticals and Dow Jones Pharma and Biotech indices were each up 11%.
Conversely, Roche's share prices fell the most among Vantage's Big Pharma group during the first nine months—by 4%—translating to about a $9 billion loss in market cap. AbbVie and Johnson & Johnson each slipped 1% as well.
For Roche, the share price decline during the first nine months of the year could be the result of investor angst over biosim threats to its top drugs. Rituxan, Herceptin and Avastin pull in more than $20 billion per year together and will face growing competitive threats in the coming years. Executives hope new launches Ocrevus and Hemlibra, which treat multiple sclerosis and hemophilia, respectively, will help offset those sales declines.
As Vantage noted, Pfizer's gains may be a result of investors believing that the company plans to return more capital to shareholders rather than focusing on a big buy. Going forward, it'll be COO Albert Bourla leading the drug giant after Jan. 1; CEO Ian Read decided to hand off the baton earlier this month. Pfizer also announced a reorganization this summer aimed at fueling growth.
Lilly has a slew of drugs it’s hoping can kick in growth for future years. The company recently won approval for migraine prevention med Emgality, which management hopes can become the “treatment of choice” among a new class of CGRP drugs. Other new medications for the company include breast cancer drug Verzenio and rheumatoid arthritis drug Olumiant. On the other side of the coin, Teva just launched a generic to Lilly’s erectile dysfunction product Cialis, which has long been a significant revenue contributor for the Indianapolis drugmaker.
For companies outside of Vantage’s Big Pharma group, CSL, Astellas and Vertex led the share price gainers at 42%, 38% and 29%, respectively. Bayer, Takeda and Celgene's share prices slipped the most out of the group at 27%, 24% and 14%, respectively. Takeda’s share price movement has partially been a result of its merger announcement with Shire, which has prompted some investor resistance. Celgene has been struggling to overcome a series of pipeline setbacks.