Despite patent expirations that will weigh heavy later in the decade, the pharma industry is on course for solid growth in both sales and earnings, according to analysts at TD Cowen.
Cumulatively, the analysts expect Big Pharma's sales to grow at 4% annually and earnings per share to grow at 7% annually. The projections cover more than a dozen leading drug companies and extend from 2023 to 2030.
Companies leading the charge in sales growth are of little surprise. Manufacturers of game-changing GLP-1 weight loss products Eli Lilly and Novo Nordisk will enjoy compounded annual revenue growth of 11% and 9%, respectively, according to the analysts.
The projections come along with Cowen's Q3 Pharma Pulse report. Analysts Steve Scala, Michael Nedelcovych, Ph.D., and Chris LoBianco previously forecast sales and EPS through 2027.
For the 2030 projections, the team notes that its cumulative sales growth forecast is unchanged from the prior review. The new profit forecast came in slightly higher than the team's 2022-27 projection.
Cowen points out that pharma companies have nearly 1,000 products in development, many of which will reach the market in this decade.
Other companies that Cowen projects will deliver compounded annual sales increases at or above the industry standard are AstraZeneca (8%), Roche (5%), Sanofi (5%), Pfizer (4%) and GSK (4%).
Companies falling below the industrywide projection are AbbVie (3%), Takeda (2%), Bristol Myers Squibb (1%), Novartis (1%) and Merck, which is the only company projected to have negative compounded growth through 2030 at -1%.
Interestingly, two of these companies are still projected to have EPS increases at or above the overall industry standard, with Merck at 10% and AbbVie at 7%.
While these drugmakers share a common thread—their massive reliance on a megablockbuster drug that is losing patent protection in this decade—both also have enormous firepower to conduct business development thanks to those huge-selling products.