Looking out over the next decade, some of the biggest drugs in the industry will tumble off the patent cliff, putting pharma giants in the hot seat as investors clamor for their next blockbuster.
The biggest names set to face generic pressure in the coming years include the top four of the industry’s best-selling drugs in 2020: Humira, Keytruda, Revlimid and Eliquis. In all, nine of the industry’s top 20 drugs by sales are set to lose exclusivity over the coming years, Moody’s analysts wrote in a recent report.
To be sure, it’s not easy to predict exactly when competition will start heating up since there may be numerous patents protecting these medicines, said Moody’s Mike Levesque, the leading author of the report. It’s also unclear whether some companies may be able to evade generic competition through court, or when imitators will score regulatory approval.
But this list provides a snapshot of some of the world's billion-dollar drugs that are inching toward generic or biosimilar competition, which will undoubtedly pressure their drugmakers into looking toward their R&D programs, or other companies, for future blockbuster opportunities.
“If you think over the major companies in the industry, the ones that have the highest exposure on a relative basis to their size this decade will be AbbVie, due to Humira in the U.S., Bristol Myers Squibb and Pfizer,” Levesque told Fierce Pharma.
Of course, on top of many minds will be AbbVie’s Humira. The world’s top drug by sales will start facing U.S. copycats in 2023, with Amgen calling first dibs. For years, AbbVie has faced scrutiny over how it shrouded Humira with hundreds of patents that date out into the next decade. In all, the Chicago-based pharma has struck at least eight biosimilar settlements for Humira.
Then comes Merck’s Keytruda. Top executives have long been pressed on what Merck has in store for life after the PD-1 king loses its market exclusivity in 2028. With Merck's recent Organon spinoff, the company is even more reliant on Keytruda, but it also has $9 billion in new cash to scout for deals.
Just how important are those meds for the companies? Humira generated around 43% of AbbVie's total revenues last year, while Keytruda pulled in about 30% of Merck's haul.
In the near term, though, Merck will have to deal with a patent cliff for its aging Type 2 diabetes drug Januvia, combined with its combo offshoot Janumet. The company isn’t giving up yet as it tries to score even more patents to extend exclusivity.
Bristol Myers Squibb is the drugmaker with the most drugs potentially losing exclusivity this decade as Revlimid, Eliquis and Opdivo face down the competition. But BMS, expected to be among the most active M&A dealmakers in years to come, has been hard at work shopping around for its next blockbusters, even after its $74 billion megadeal for Celgene in 2019 and its $13.1 billion buyout of MyoKardia last year.
Moody’s doesn’t see any more mega M&A moves like BMS’ Celgene deal coming down the pike—at least in the short term. The analysts, looking over the next 12 to 18 months, predict many deals will land in the $5 to $20 billion range. The hottest markets to jump into? Moody’s expects it will be oncology, immunology and gene therapy given the unmet needs for highly effective treatments and rapidly evolving technology, such as the gene-editing tool CRISPR.
Our report dives into what some of the most exposed companies are doing to prepare for their looming patent cliffs. The findings are based on information from Moody’s Investment Services, as well as company filings, investor calls, FDA records and more. As always, we hope you enjoy and reach out if you have comments or insights to share.