Beyond the Numbers: Extrapolating Today’s Trends Forward

Paul Verdin, VP, head of consulting and analytics, Evaluate Ltd

Paul Verdin, VP, head of consulting and analytics at Evaluate Ltd, spoke with Pharmaceutical Executive for this year’s Pharma 50 Report, which presents Pharm Exec’s annual rankings of the top global biopharma companies based on prescription drug revenue (with data provided by Evaluate).

In the following excerpts from the conversation, Verdin expands on some of the current R&D trends and other related drivers on the commercial and legislative fronts that may influence Pharma 50 company maneuvering in the years ahead.

Verdin is based in the UK. Before joining Evaluate in 2015, he worked as a consultant for Thomson Reuters. Verdin earned a PhD from the University of Nottingham/Rothamsted Research.

Pharm Exec: Among the top handful of Big Pharma organizations, what’s a major business strategy many are implementing to maintain their positioning or drive up their growth numbers?

Verdin: I think diversifying is a big thing for many companies—the balance between these cash-cow-type products—but, then, also having a more diversified risk portfolio and making forays into new therapy areas. For example, if you look at J&J (No. 1 in the rankings), it’s fairly diversified, whereas you've got other companies such as AbbVie historically dominated by one product (AbbVie is No. 2, but down 6.1% in overall Rx sales amid Humira biosimilar competition).

PE: Behind the powerful growth of their GLP-1 drugs for diabetes, and, of course, of late, weight loss, and their promise in other indications, do you see Novo Nordisk and Eli Lilly cracking the top 10 in the next year or two as far as Big Pharma Rx output?

Verdin: I think so. Another analysis I've done in the last six months or so has shown that they will come into the top 10 and even knock out the likes of, if you just ask someone on the street to name Big Pharma companies, some of those would exit as a result of those two entering. [Novo Nordisk and Lilly] would be the new kids on the block, I suppose, challenging the big names that people might know a little more.

PE: What are some other emerging therapeutic areas commercially—driven by recent advances in R&D—that have potential for growth on the levels of some of these drug classes, such as GLP-1 or PD-1s, that have taken off in recent years?

Verdin: The new wave of antibody-drug conjugates (ADCs) is one. And also other next-generation modalities, such as gene therapies, RNA-bases therapies, and bispecific antibodies for cancer. They’ll be interesting areas to watch. I think there's innovation across the board.

ADCs have be driving a lot of dealmaking activity as well, where companies are putting their M&A and partnering dollars into these next-generation approaches. There’s a lot of partnering activity in cell and gene therapy and other next-gen therapeutic areas, too.

It also comes back to the whole type 2 diabetes and obesity spaces. Not all of that [activity] is played out.

PE: How would you gauge the impact of biosimilars, a market that is finally accelerating in the US, in contributing to these Pharma 50 rankings and revenue jumps/drops in the years ahead?

Verdin: I think they will. It's complex everywhere but particularly in the US. In the US, biosimilars haven't taken off as rapidly as you might logically expect they would, for all sorts of complex reasons—access being one. But I would expect biosimilars to be a very big market—and for many companies to jump on the bandwagon, so to speak. There's going to be a whole raft of new biosimilars markets opening up in the coming years.

Keytruda and Opdivo will start coming off patent in 2028. They’ll be big prizes that companies will seek to capitalize on. Companies like Amgen have made a lot of investments into the biosimilar space. They've got a Humira biosimilar (Amjevita). Pfizer does as well (Abrilada).

PE: Where do you see pursuits in M&A and dealmaking helping offset growth losses—whether patent- or supply/demand-related—and reshaping rankings in the near future?

Verdin: The global environment creates a challenging space for these kinds of activities to happen. But there have been signs of some uptick. As mentioned, there’s been deals in the ADC space and other stuff that has been relatively sizable recently.

Obviously there's been talk of many companies, like Pfizer, coming out of COVID with big balance sheets to put to use for this kind of thing. It wouldn't be a surprise to see these types of strategic moves where a Pfizer or someone will add a platform or add some other capability to a company's repertoire. I wouldn't be surprised to see a healthy year on the deal front.

The global situation is challenging. But then we know that pharma is kind of like the big beast that weathers the storms.

PE: In that vein, what do you think of the potential impact of the Inflation Reduction Act (IRA)—and looming Medicare drug price negotiations? Is it possible that any price drops, in the semi-near term, could put a dent into future sales of some of these established products that usually highlight our sales ranks?

Verdin: I guess logically it should, right? That's going to be, in some ways, the desired intention [of the legislation]. But it’s so hard to say, because at the moment the whole thing is so up in the air. You'd have to assume that, yes, to some extent [it will impact] because that's the intention of the program. But the extent to which it will dent sales is very hard to say, with where we are today.

But a lot of strategies will emerge in pharma to manage the potential impact or disruption—and create competition and stuff that would change [product] eligibility, etc. It's quite a complex beast.

PE: Is it safe to say, then, that pharma, today, is prioritizing challenges such as the patent cliff, and other commercial-type headwinds, more so than the IRA?

Verdin: Probably. Because those are very real near-term, tangible, potentially incoming impacts. Whereas the IRA still has a lot of uncertainty around it. But from what I've seen, it definitely is a concern. You know that there's a lot of thought going into it—how this will impact long-term strategic planning. It definitely is a big factor and a new factor in their thinking.

I guess every company has its own particular blend of challenges. It might be the need to replenish the pipeline or the need to protect a brand from biosimilar erosion, or whatever. They've all got their own particular flavor of challenge.