Where do you see yourself in five years? For some of the world’s largest pharma companies, that question is especially daunting in the face of patent losses and pricing regulation. For others, the answer is crystal clear.
Take Moderna, the COVID-19 wunderkind that became the second company with a marketed vaccine during the pandemic without a single other product to its name. With the one shot in the biotech giant’s commercial portfolio now facing spiraling sales as the pandemic wanes, Moderna needed to make some promises to keep investors on board.
On Wednesday, CEO Stephane Bancel did just that. And he promised big. In the next five years, Moderna plans to launch as many as 15 new products and bring 50 candidates into clinical trials. The mRNA platform technology has potential in multiple areas of medicine, including vaccines, oncology and rare diseases.
Of course, such promises will take a sizeable investment, and Moderna has forecast R&D spending to reach about $25 billion between 2024 and 2028. In addition, it expects sales in the wide range of $8 billion to $15 billion by 2027 from respiratory vaccines alone, and forecasts about $10 billion to $15 billion more from oncology and rare diseases by 2028.
The fledgling member of Big Pharma’s ranks isn’t the first to make such a pledge as an assurance to investors that a pipeline will pay off in the long run. These commitments are part of a broader drugmaker tradition, perhaps because investors in the space stare down a long and winding road to ultimate revenue driven by lengthy clinical timelines and risky bets on science.
Ongoing financial promises
One of the biggest such predictions came from healthcare behemoth Johnson & Johnson, which last year set a pharma sales target of $60 billion in annual sales by 2025. CEO Joaquin Duato tempered the expectation to $57 billion due to constraints of foreign currency exchange, but remained confident this spring that the company would hit that number despite analysts’ wariness.
An analyst pointed out during a May discussion with Duato that Wall Street’s consensus was only for about $53.5 billion in 2025 pharma sales, but the CEO said a combination of the company’s existing portfolio, an extensive pipeline and lower expected impact of biosimilars would play into meeting the goal.
“I feel confident that we’ll be able to hit our $57 billion, and I believe the Street, as we continue to progress, will start recognizing that this is a realistic goal,” Duato said.
Another ongoing projection with a closer end date is that of AstraZeneca CEO Pascal Soriot, who in 2014 said the company’s sales would surpass $45 billion by 2023 — two years later, he reduced the number to $40 billion. With $43 billion in revenue last year and about $22 billion in the first half of 2023, AstraZeneca is likely to hit the revised goal, and maybe even the original one.
AbbVie is a pharma giant notorious for making individual product sales promises. Back in 2015, the company predicted sales of its immunology drug Humira would reach a whopping $18 billion by 2020, up from only $8.4 billion sold that year. Fast-forward half a decade and Humira pulled in $19.8 billion, becoming the bestselling drug in the world.
With biosimilars now taking a chunk out of Humira’s sales numbers, AbbVie is making more immunology projections, this time on its duo Rinvoq and Skyrizi, which the company hopes will take up the mantle of their predecessor.
At the end of 2020, with just over $2 billion in combined sales, AbbVie projected 2025 revenue from the two treatments to reach more than $15 billion. By the end of 2022, the drugs’ revenue had together reached almost $8 billion.
And then there’s Pfizer. CEO Albert Bourla is contending with a series of patent expirations between 2025 and 2030 for drugs like Eliquis, Vyndaqel, Xeljanz, Ibrance and Xtandi — and of course, there’s the COVID vaccine Comirnaty that added an unusually massive windfall of cash but is likely to be short lived.
Despite those headwinds, Bourla has forecast $25 billion in additional revenue by 2030 from Pfizer’s newly approved RSV vaccine, as well as assets in migraines and ulcerative colitis acquired through purchases of Biohaven Pharmaceuticals and Arena Pharmaceuticals, respectively. The company has used its COVID cash for several acquisitions that it hopes will be additive to future revenues.
The trouble with the future
The consulting firm J+D Forecasting wants companies to understand that long-term predictions are inherently a risk.
“The greatest challenge with long-range forecasting is the interplay of a complex web of variables,” it wrote in a recent blog post. “It is the forecaster’s responsibility to anticipate uncertainty. While it is fairly straightforward to create a highly accurate short-term forecast, longer-range planning makes it much harder to predict the impact of future changes.”
Swiss pharma giant Novartis has not made similar long-term projections to its peers. In fact, some of its drugs have failed to pan out either clinically or financially, leading CEO Vas Narasimhan to hire renowned Wall Street analyst Ronny Gal to strategize for the company’s future.
“I asked myself, if there was one person I would want sitting next to me, challenging our thinking, coming up with new ideas, why not pick the person whose reports I’m reading anyway?” Narasimhan told the Wall Street Journal.
So, in the tradition of Big Pharma making big promises and, for the most part, delivering on those promises, the question is: Will Novartis be next to predict the future?