Big Pharma ceding sales--and share--to up-and-coming drugmakers

Good news for drugmakers: Sales will grow more than 5% through 2020. More good news: Patent cliffs will be more like "rolling hills" in the years to come, thanks to the preponderance of biologic meds. Even more good news: Last year's crop of new drugs is the strongest in years, judging by the blockbuster-level expectations for most of them.

If there's any bad news in EvaluatePharma's annual report on the drug market, it's directed at Big Pharma. As if drug-approval records, new-launch success, hiring records and even executive pay weren't enough to show that biotech companies are chipping away at Big Pharma dominance, then here's another stat for the case.

By 2020, the world's top 10 drugmakers won't all be Big Pharma companies. Specialty drugmakers--namely the antiviral powerhouse Gilead Sciences ($GILD) and diabetes specialist Novo Nordisk ($NVO)--will crack those ranks, booting out Eli Lilly ($LLY) and AbbVie ($ABBV).

By 2020, drug market share won't be concentrated in the hands of today's global leaders. Novartis ($NVS), Roche ($RHHBY), Sanofi ($SNY), Pfizer ($PFE), GlaxoSmithKline ($GSK), Merck ($MRK), Johnson & Johnson ($JNJ), Eli Lilly and AstraZeneca ($AZN)--essentially a roll call of Big Pharma--will all lose share between now and 2020. The biggies will still boast the biggest shares, but only two companies will command 5% or more, compared with 5 in 2013.

Between 2013 and 2020, only four companies will rack up 8% annual growth or more--and only one of them--Bristol-Myers Squibb ($BMY) with 8%--is among the group we call Big Pharma. And some would argue that BMS has transformed into a biotech. The other three are Biogen Idec ($BIIB) (13%), Gilead (12%) and Novo (8%).

True, Biogen and Gilead are growing from a smaller base of revenue to start with. It's tough to move the needle when you're starting with $46 billion in drug sales, like Novartis is. But even in absolute terms, the sales leaps are impressive. Biogen's 2020 sales are projected at $13 billion, up from $5.4 billion--a jump of $8.4 billion, partly because of its multiple sclerosis contender Tecfidera, one of FiercePharma's top 15 drug launches. Gilead's are set to grow to $23.7 billion from $10.8 billion, a difference of $12.9 billion. And that's on Sovaldi, the company's hit hepatitis C treatment (its fast-growing HIV meds help, too).

Compare that with $2.8 billion in sales growth at Pfizer, or $2.5 billion at AstraZeneca, or $2.1 billion at Merck.

So, Big Pharma is losing ground in worldwide sales rankings. Its market share is shrinking. And its growth projections fall short of those at smaller companies. Solutions? You can look at Pfizer's failed bid for AstraZeneca for the obvious one. Anything else is much more complicated. There's no secret sauce for developing a new drug that takes off like Sovaldi or Tecfidera.

- read the EvaluatePharma release
- here's a link to the World Preview report

Special Reports: Top 10 pharma companies by 2013 revenue | Top 15 drug launch superstars