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.

It’s fi­nal­ly over: Bio­gen, Ei­sai scrap big Alzheimer’s PhI­I­Is af­ter a pre­dictable BACE cat­a­stro­phe rais­es safe­ty fears

Months after analysts and investors called on Biogen and Eisai to scrap their BACE drug for Alzheimer’s and move on in the wake of a string of late-stage failures and rising safety fears, the partners have called it quits. And they said they were dropping the drug — elenbecestat — after the independent monitoring board raised concerns about…safety.

We don’t know exactly what researchers found in this latest catastrophe, but the companies noted in their release that investigators had determined that the drug was flunking the risk/benefit analysis.

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It's not per­fect, but it's a good start: FDA pan­elists large­ly en­dorse Aim­mune's peanut al­ler­gy ther­a­py

Two days after a fairly benign review from FDA staff, an independent panel of experts largely endorsed the efficacy and safety of Aimmune’s peanut allergy therapy, laying the groundwork for approval with a risk evaluation and mitigation strategy (REMS).

Traditionally, peanut allergies are managed by avoidance, but the threat of accidental exposure cannot be nullified. Some allergists have devised a way to dose patients off-label with peanut protein derived from supermarket products to wean them off their allergies. But the idea behind Aimmune’s product was to standardize the peanut protein, and track the process of desensitization — so when accidental exposure in the real world invariably occurs, patients are less likely to experience a life-threatening allergic reaction.

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Lisa M. DeAngelis, MSKCC

MSK picks brain can­cer ex­pert Lisa DeAn­ge­lis as its next CMO — fol­low­ing José Basel­ga’s con­tro­ver­sial ex­it

It’s official. Memorial Sloan Kettering has picked a brain cancer expert as its new physician-in-chief and CMO, replacing José Baselga, who left under a cloud after being singled out by The New York Times and ProPublica for failing to properly air his lucrative industry ties.

His replacement, who now will be in charge of MSK’s cutting-edge research work as well as the cancer care delivered by hundreds of practitioners, is Lisa M. DeAngelis. DeAngelis had been chair of the neurology department and co-founder of MSK’s brain tumor center and was moved in to the acting CMO role in the wake of Baselga’s departure.

Penn team adapts CAR-T tech, reengi­neer­ing mouse cells to treat car­diac fi­bro­sis

After establishing itself as one of the pioneer research centers in the world for CAR-T cancer therapies, creating new attack vehicles to eradicate cancer cells, a team at Penn Medicine has begun the tricky transition of using the basic technology for heart repair work.

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Tal Zaks. Moderna

The mR­NA uni­corn Mod­er­na has more ear­ly-stage hu­man da­ta it wants to show off — reach­ing new peaks in prov­ing the po­ten­tial

The whole messenger RNA field has attracted billions of dollars in public and private investor cash gambled on the prospect of getting in on the ground floor. And this morning Boston-based Moderna, one of the leaders in the field, wants to show off a few more of the cards it has to play to prove to you that they’re really in the game.

The whole hand, of course, has yet to be dealt. And there’s no telling who gets to walk with a share of the pot. But any cards on display at this point — especially after being accused of keeping its deck under lock and key — will attract plenty of attention from some very wary, and wired, observers.

“In terms of the complexity and unmet need,” says Tal Zaks, the chief medical officer, “this is peak for what we’ve accomplished.”

Moderna has two Phase I studies it wants to talk about now.

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Rit­ter bombs fi­nal PhI­II for sole lac­tose in­tol­er­ance drug — shares plum­met

More than two years ago Ritter Pharmaceuticals managed to find enough silver lining in its Phase IIb/III study — after missing the top-line mark — to propel its lactose intolerance toward a confirmatory trial. But as it turned out, the enthusiasm only set the biotech and its investors up to be sorely disappointed.

This time around there’s little left to salvage. Not only did RP-G28 fail to beat placebo in reducing lactose intolerance symptoms, patients in the treatment group actually averaged a smaller improvement. On a composite score measuring symptoms like abdominal pain, cramping, bloating and gas, patients given the drug had a mean reduction of 3.159 while the placebo cohort saw a 3.420 drop on average (one-sided p-value = 0.0106).

Ear­ly snap­shot of Ad­verum's eye gene ther­a­py sparks con­cern about vi­sion loss

An early-stage update on Adverum Biotechnologies’ intravitreal gene therapy has triggered investor concern, after patients with wet age-related macular degeneration (AMD) saw their vision deteriorate, despite signs that the treatment is improving retinal anatomy.

Adverum, on Wednesday, unveiled 24-week data from the OPTIC trial of its experimental therapy, ADVM-022, in six patients who have been administered with one dose of the therapy. On average, patients in the trial had severe disease with an average of 6.2 anti-VEGF injections in the eight months prior to screening and an average annualized injection frequency of 9.3 injections.

Alex Ar­faei trades his an­a­lyst's post for a new role as biotech VC; Sanofi vet heads to Vi­for

Too often, Alex Arfaei arrived too late. 

An analyst at BMO Capital Markets, he’d meet with biotech or pharmaceutical heads for their IPO or secondary funding and his brain, trained on a biology degree and six years at Merck and Endo, would spring with questions: Why this biomarker? Why this design? Why not this endpoint? Not that he could do anything about it. These execs were coming for clinical money; their decisions had been made and finalized long ago.

Arde­lyx bags its first FDA OK for IBS, set­ting up a show­down with Al­ler­gan, Iron­wood

In the first of what it hopes will be a couple of major regulatory milestones for its new drug, Ardelyx has bagged an FDA approval to market Ibsrela (tenapanor) for irritable bowel syndrome.

The drug’s first application will be for IBS with constipation (IBS-C), inhibiting sodium-hydrogen exchanger NHE3 in the GI tract in such a way as to increase bowel movements and decrease abdominal pain. This comes on the heels of two successful Phase III trials.