What’s dri­ving the rapid growth of the top 20 bio­phar­ma com­pa­nies in the world?

I’ve been re­mark­ing for some time now that the whole bio­phar­ma sec­tor glob­al­ly has grown enor­mous­ly over the past few years. And thanks to the in­vest­ment bankers at Tor­reya I can add a few num­bers to put that in­to per­spec­tive, along with the boom­ing role that Chi­na has played and is like­ly to con­tin­ue to play over the next gen­er­a­tion.

One of the charts that re­al­ly leaped out at me was a look at the mar­ket val­u­a­tions of the top 20 com­pa­nies. In the past 6 years, says Tor­reya’s new re­port out on the in­dus­try, those val­u­a­tions have dou­bled in size, grow­ing from about $1.45 tril­lion to very close to $3 tril­lion.

The stand­outs are Cel­gene, up 351%, and J&J, which grew by $204 bil­lion to to­day’s $380 bil­lion (up about 1% since Tor­reya gath­ered the num­bers). That rise alone is get­ting in­to the same ball­park as all of Roche’s $232 bil­lion. And lets keep in mind that the swelling val­u­a­tions among the top 20 bio­phar­mas have been track­ing rapid­ly grow­ing stock in­dex­es as well.


This is oc­cur­ring dur­ing a time in which most gov­ern­ments — out­side the US — are more like­ly than ever to get ag­gres­sive about con­tain­ing the cost of drugs, which helps ex­plain why the 12 big gov­ern­ments in Eu­rope spend 1.2% of GDP on drugs, com­pared to 2.03% in the US, where cost con­trols have not been put in place by the gov­ern­ment. The US, by the way, is just a lit­tle ahead of Japan on that score, which reg­is­ters 1.93% of GDP go­ing to phar­ma­ceu­ti­cals.

Rare dis­eases and on­col­o­gy will re­main a cen­tral fo­cus in R&D. Tor­reya carved out the top 20 pure-play rare dis­ease com­pa­nies in the world and cal­cu­lat­ed they have a mar­ket val­ue of $315 bil­lion — which gets back to that J&J com­par­i­son to put it in­to per­spec­tive.

If you fo­cus on the val­ue of com­pa­nies that spot­light rare forms of can­cer, there’s an­oth­er $193 bil­lion. So now you’re talk­ing around a half tril­lion dol­lars for the to­tal.

Chi­na, mean­while, has seen its Phar­ma sec­tor boom. Over just the last 18 months, the val­ue of the top 20 phar­ma com­pa­nies in Chi­na grew from $450 bil­lion to $534 bil­lion — up 19%. And Tor­reya be­lieves this is not a bub­ble. Over the next 50 years they ex­pect the phar­ma sec­tor in Chi­na will quadru­ple in size, while the US will dou­ble and ma­jor Eu­ro­pean mar­kets will be un­der the 2X lev­el.


The US will ac­count for 33% of phar­ma rev­enue this year, with Chi­na weigh­ing in at 10% and West­ern Eu­rope at 22%. In 2060, Tor­reya’s an­a­lysts be­lieve that Chi­na will grow to 18%, edg­ing out West­ern Eu­rope at 17% though still well be­hind the US share of 30%.

In many re­spects, this cen­tu­ry should mark Chi­na’s ar­rival as one of the Big 3 bio­phar­ma mar­kets. For now, though, it re­mains one of the most poor­ly un­der­stood mar­kets in the world.

Bi­o­log­ics in gen­er­al, and rare dis­ease bi­o­log­ics in par­tic­u­lar, will con­tin­ue to be stand­outs for the growth com­pa­nies in the in­dus­try, Tor­reya fig­ures. RNA tech, gene ther­a­pies and gene edit­ing will dri­ve fu­ture growth while cell ther­a­pies be­come much more rou­tine. And new in­no­va­tions in phar­ma man­u­fac­tur­ing will cre­ate more op­por­tu­ni­ties at a time that minia­ture im­plantable de­vices help au­to­mate the reg­u­lar use of ther­a­peu­tics.

Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.