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.

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While oncology researchers have long pursued the potential of cellular immunotherapies for the treatment of cancer, it was unclear whether these therapies would ever reach patients due to the complexity of manufacturing and costs of development. Fortunately, the recent successful development and regulatory approval of chimeric antigen receptor-engineered T (CAR-T) cells have demonstrated the significant benefit of these therapies to patients.

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Stéphane Bancel, the CEO of Moderna, one of the leading mRNA players whose quick vault into the markets with a highly effective vaccine created an instant multibillion-dollar market, added his voice to the rising chorus early Tuesday. According to Bancel, there will be a significant drop in efficacy when the average immune system is confronted by Omicron. The only question now is: How much?

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Since our start in 2016, Endpoints has grown fast while executing our mission to cover biopharma’s most critical developments for industry pros worldwide. As readership has grown, our advertising business has too. Endpoints advertising partners support the mission and engage their desired audiences through announcements on our email and web platforms, brand recognition in our event coverage and sponsorships of Endpoints daily and weekly reports.

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