From biologics to small molecules – the shift in biopharma’s revenue growth

Data insights from GlobalData has reported that in 2023, major players in the biopharma sector generated “significant” revenue growth from obesity drugs.

Between 2022 and 2023, companies including Novo Nordisk and Eli Lilly had “year-on-year (YoY) revenue growth of 31.3 percent, 26 percent, and 19.6 percent, respectively”.

Their research showed that of the top 20 companies, Novo Nordisk experienced the highest revenue growth of 31.3 percent to $33.7 billion.

Global sales of $13.9 billion and $4.6 billion in 2023 for its obesity and diabetes blockbuster drugs Ozempic (off-label for obesity) and Wegovy respectively, facilitated the growth.

This is despite an “overall 1.6 percent decline in aggregate revenue to $816 billion from 2022 to 2023” for global biopharma companies, GlobalData noted.

Similar to Novo Nordisk, Eli Lilly’s obesity and diabetes drugs Mounjaro (off-label for obesity) and Zepbound propelled revenue growth to “$34.1 billion, with combined global sales of $5.3 billion in 2023” GlobalData added.

“Mounjaro, Zepbound, and Ozempic are expected to surpass Merck & Co’s Keytruda in global analyst consensus sales by 2030, due to the surging demand for weight loss drugs. Projected sales for Mounjaro, Zepbound, and Ozempic are $27.4 billion, $27.3 billion, and $22.4 billion, respectively, compared to $21.3 billion for Keytruda, according to GlobalData’s Drugs Database,” Alison Labya, Business Fundamentals Analyst at GlobalData stated.

Major manufacturing investment to support API production for tirzepatide

Additional factors impacting revenue growth in biopharma

Three of the top biopharma companies reported greater than 20 percent YoY operating profit growth in 2023. This includes AstraZeneca (118.1 percent), Novo Nordisk (37.1 percent), and Novartis (22.6 percent), according to GlobalData.

“In terms of profitability, five out of the top 20 companies had over 25 percent growth in net profit, with Novartis (113.5 percent), AstraZeneca (81.1 percent), and Novo Nordisk (50.7 percent) reporting more than 50 percent growth,” Labya continued.

According to GlobalData, Eli Lilly’s revenue growth was also influenced by the breast cancer drug Verzenio and diabetes drug Jardiance. Last year, worldwide sales were $3.9 billion and $2.7 billion in 2023, respectively.

Revenue decline in 2023

Moreover, GlobalData shared that biopharma players who reported a YoY decline of over 50 percent in profitability in 2023 included: Pfizer (-93.2 percent), Astellas (-82.7 percent), GSK (-67.1 percent), AbbVie (-58.9 percent), and Takeda (-54.6 percent).

Last year, Pfizer experienced its biggest decline in revenue (47.7 percent). This was a result of decreased demand for Comirnaty and Paxlovid to treat COVID-19.

“As a result of Pfizer’s revenue decline, Johnson & Johnson regained its position as the top player in the biopharmaceutical industry by revenue, having witnessed $85.2 billion in revenue in 2023,” Labya shared.

Finally, Labya predicted that sales for obesity drugs are expected to continue through the remainder of this year. However, this could impact its supply chain because of consumer demand, she explained.