Sanofi’s diabetes treatment Lantus was the industry’s biggest annual revenue growth driver in 2012, with sales expanding by $1.4 billion versus 2011 levels. Two other products contributed annual growth in excess of $1 billion; AbbVie’s Humira (+$1.3 billion) and Merck & Co.’s Januvia/Janumet (+$1.1 billion).
These three rapidly expanding product franchises each have their own narrative. Lantus’ growth trajectory highlights the importance of Sanofi’s efforts to retain market share in the face of emerging competition, while Humira’s continued sales expansion highlights both its status as the leading anti-TNF therapy and its core role in AbbVie’s long-term development (it accounts for approximately 40 percent of sales). The performance of Januvia (alongside Lantus) demonstrates not only the broader growth dynamics of the global diabetes market, but Merck’s continued ability to deliver small-molecule blockbuster brands to market.
A further 11 product franchises generated year-on-year sales growth in excess of $500 million in 2012, of which five were cancer products. This included Roche’s Avastin, Herceptin and Rituxan franchises, which delivered combined growth of +$2 billion. The high growth dynamic of the global diabetes market is further evidenced by the presence of Novo Nordisk’s Victoza and NovoRapid franchises among this group.
Encouragingly for the industry there is only one product on the list that is expected to face a significant revenue decline in the short-to-medium term as a result of patent expiry; Eli Lilly’s Cymbalta, which is due to face generic competition in the US market later this year.
Demonstrating the level of impact Cymbalta patent expiry will have on the company, the depression treatment generated sales growth of +$833 million over 2011-12. Generic erosion will therefore trigger a sharp u-turn in revenue trajectory. Although the list provides a 12-month snapshot (and there are limitations in illustrating longer-term trends), a general lack of near-term major growth resistors provides some illustration that the industry has passed beyond the most damaging period of the 'patent cliff.' Furthermore, a lack of products on the list that are set to lose expiry in the so-called second peak cliff year of 2015/16 is also encouraging.
Helping to sustain a robust revenue outlook for many of these products is biologic status, which eliminates the threat of typical generic erosion once patents have expired. Eleven of the 20 products are biologics, including the two fastest current industry growth drivers; Lantus and Humira. The entrenchment of monoclonal antibody products on the list also provides a timely reflection as to why Big Pharma players are firming up their investment in the biosimilars space.
The newest products on the list are Regeneron’s Eylea, Johnson & Johnson’s Zytiga and Novartis’ Gilenya, each of which have enjoyed a rapid growth trajectory since launch and have reinforced the notion that Big Pharma is once again delivering innovative products to the market. Retaining this momentum throughout 2013 and beyond is now critical; while long-duration assets such as the various biologic products provide a sizeable revenue base and in many cases are hugely profitable, new product launch momentum remains the life-blood of the industry.
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