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Peer Comparison: Top Pharmaceutical Companies Will See Revenues Soar By 2028


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Peer Comparison: Top Pharmaceutical Companies Will See Revenues Soar By 2028

The global pharmaceutical industry offers strong growth prospects for large innovative players, and the next several years will be no exception. S&P Global Ratings expects that the seven players it rates with excellent business risk profiles will increase their revenue by a cumulative amount of about $60 billion between 2023 and 2028.

Seven of the 17 leading pharmaceutical companies we rate have an excellent business risk profile, our highest category. This high proportion of excellent assessments reflects the industry's favorable characteristics, as well as the companies' powerful R&D engines that regularly yield new breakthrough products.

We take a closer look at the top seven pharmaceutical companies' individual strengths and weaknesses to add more granularity to this broad category of players. To do this, we assess them against the following four benchmarks:

  • The number of blockbuster drugs, to assess past R&D success.
  • Our expectation of revenue growth in 2023-2028, to gauge R&D strength.
  • The companies' operating margins, to evaluate the efficiency of their R&D, the exclusivity and efficacy of their drugs, and the optimality of their marketing spending.
  • The degree of dependence on the top three products, to identify possible loss-of-exclusivity risk.

We classify each company as above average, average, or below average for each benchmark, depending on their relative performance within the excellent business risk profile category.

Table 1

Top pharmaceutical company benchmarks
Number of blockbusters Expected revenue growth, 2023-2028 (mil. $) Adjusted EBITDA margins, 2023 (%) Contribution of top three products (%)
Pfizer 7 3,500 26.9 42
Sanofi 9 14,243 26.5 42
GSK 11 5,995 30.7 25
AstraZeneca 12 11,953 32.3 37
Novartis 13 6,994 40.3 30
Johnson & Johnson 14 10,543 36.6 46
Roche 15 10,843 35.7 33

Blockbusters: Roche And Johnson & Johnson Come Out On Top

Blockbusters--products with over $1 billion in annual sales--are what big pharmaceutical companies invest billions in R&D to produce. These best-selling drugs enjoy strong returns during their period of exclusivity, which, on average, lasts about 10 years. The number of blockbusters is a good measure of the quality of an R&D engine, even though it is often biotechnology companies that conduct the initial research, and diversification limits the risk of loss of exclusivity.

Chart 1


Above average: Roche, Johnson & Johnson (J&J)

Roche and J&J have the most blockbusters, with 15 and 14, respectively. Diversification by therapeutic franchise is a key factor in our business risk profile assessment, and there is a clear correlation between the strength of the assessment and the number of therapeutic areas served. Highly successful pharmaceutical companies like Novo Nordisk and Merck & Co. only have a strong business risk profile because they concentrate heavily on diabetes care and obesity, and immunology and oncology, respectively.

J&J is the largest and the most diversified pharmaceutical company in the group of seven, and it is present in five different therapeutic areas, oncology, immunology, neuroscience, cardiovascular, pulmonary hypertension, and eyecare. J&J's 14 blockbusters reflect this high level of diversification. They include Darzalex, an undisputed leader in myeloma with over $10 billion of annual sales; Tremfya, an anti-psoriasis drug; and Invega, an anti-psychotic.

Roche has a successful track record in 10 franchises, with blockbusters in oncology (Tecentricq), multiple sclerosis (Ocrevus), and hemophilia (Hemlibra). Unlike most of their peers, J&J and Roche are also diversified beyond pharmaceuticals through their global operations in medical devices and diagnostics, respectively.

Average: Novartis, AstraZeneca, GSK

Novartis, AstraZeneca, and GSK have around 12 blockbusters each, slightly less than Roche and J&J, but still a high number. Novartis works across four therapeutic areas: cardiovascular, renal, and metabolic; immunology; neuroscience; and oncology. AstraZeneca has a strong focus on oncology, which does not pose a risk considering the broadness of this franchise. GSK is a world-leading player in respiratory, HIV, and vaccines, and has four blockbusters in vaccines alone.

Below average: Sanofi, Pfizer

Sanofi and Pfizer have fewer than 10 blockbusters each. For Sanofi, a clear mitigant is that the mega-blockbuster Dupixent treats various diseases and therefore could be split up into several blockbusters. Still, Sanofi lacks blockbusters in the key oncology franchise, and, apart from Tzield, a recent acquisition, has discontinued its R&D into diabetes.

Pfizer only had seven blockbusters at year-end 2023. This partly explains why the company is one of the most active in mergers and acquisitions (M&A). Pfizer's recent acquisition of Seagen for $43 billion has given it additional blockbusters that will narrow the gap with its peers.

Revenue Growth: A Cumulative $60 Billion Rise Over 2023-2028

All seven pharmaceutical companies with excellent business risk profiles have good growth drivers, and we anticipate that all of them will increase their toplines by at least $3 billion by 2028 (see chart 2). This demonstrates the above-average revenue-generating potential of their pipelines and an unparalleled ability to cope with losses of exclusivity.

However, this benchmark is more volatile than the other three, and the ranking may change next year as we shift the focus to 2024-2029. For instance, GSK will lose exclusivity on its shingles vaccine in 2029. A sizable acquisition could also change a company's growth prospects dramatically. Growth primarily comes from established blockbusters, which on the one hand, makes it more predictable, but on the other, flags a lack of promising molecules in late-stage development.

Chart 2


Above average: Sanofi, AstraZeneca, Roche, J&J

Sanofi, AstraZeneca, Roche, and J&J come out ahead of their peers as we expect their 2028 revenue to exceed that in 2023 by more than $10 billion. Sanofi will see only a limited loss of exclusivity, while benefitting from the huge potential of Dupixent, which has been approved for respiratory indications following an earlier filing for nasal polyps and atopic dermatitis. Dupixent has the potential to exceed $20 billion in annual sales by the end of the decade. That said, although Sanofi has some promising molecules in late-stage development, its pipeline does not seem to encompass new products with the potential to generate billions in sales.

AstraZeneca's and Roche's growth trajectory is undoubtedly more balanced, as they already have a selection of blockbusters with long-term exclusivity whose sales should rise dramatically by the end of the decade. While J&J will feel the effects of the recent patent expiry for Stelara, a monoclonal antibody medication that generates $10 billion in annual sales, the impressive growth in sales of anti-cancer drug Darzalex and Tremfya will offset this loss of exclusivity and keep J&J in the top league.

Average: Novartis, GSK

We expect Novartis and GSK to increase sales comfortably by $5 billion-$10 billion over the 2023-2028 period, albeit by different means. GSK's growth trajectory focuses on vaccines, and in 2029, the company will lose exclusivity of its bestselling product Shingrix, a vaccine against shingles. However, we see limited generic or biosimilar competition for vaccines.

We expect a significant sales decline for Entresto in the medium term, as Novartis loses exclusivity for its best-selling cardiology drug in 2025. Entresto generates about $6 billion of revenue annually, but sales of other drugs will more than offset the patent cliff. In the next five years, we forecast that Kisqali, a treatment for breast cancer, will contribute about $5 billion to Novartis' revenue. Sales of Kesimpta, for multiple sclerosis, and Leqvio, for high cholesterol, should each increase by about $2 billion in the coming five years, contributing substantially to growth. However, generic competition for Entresto explains why Novartis is not in the above average category.

Below average: Pfizer

Pfizer is the only company in the top seven for which we expect sales growth of below $5 billion. The steep decline in sales of its COVID-19 vaccine is one explanation. Sales peaked at $37 billion in 2022 but dropped to $11 billion last year. The company's oncology drug Ibrance, which generated about $5 billion of sales in 2023, will lose exclusivity from 2027.

However, Pfizer has about seven new products with blockbuster potential. In addition, the success of its COVID-19 vaccine provided Pfizer with a sizable amount of cash to finance the acquisition of Seagen. We have not included Seagen in chart 1 above, but it will contribute significantly to Pfizer's topline.

Profitability: Operating Margins Will Rise Steadily

The comparison here is complex because some companies do not focus solely on pharmaceuticals, and over-the-counter products can drag operating margins down. In addition, acquisitive companies typically have an advantage over those favoring in-house development, as internal R&D weighs on EBITDA. M&A is often necessary to ensure topline growth when the internal pipeline is depleted. Lastly, the nature of the diseases addressed may affect a company's profitability irrespective of its efficiency. Diseases managed by primary care doctors necessitate engagement with many practitioners, leading to higher commercialization costs, whereas diseases managed by specialist doctors only require engagement with a few practitioners.

We foresee operating margins gradually increasing as all players streamline their cost bases and drop their ancillary operations to focus increasingly on innovative pharmaceuticals. Following Novartis' spin-off of its generics business and GSK's disposal of its consumer health care business, the companies now focus entirely on innovation. Following suit, Sanofi recently announced the possible separation of its consumer health care arm. Roche and J&J maintain a foothold beyond innovative pharmaceuticals, but their medical devices and diagnostics operations have a strong degree of sophistication and innovation.

Trimming R&D projects to concentrate on the most promising ones and avoid failure at the late-stage development stage is key to success. In the fourth quarter of 2022, Roche dropped a potential drug for Alzheimer's disease, Gantanarumab, and most players concentrate their efforts on selected franchises and technology platforms. Novartis now operates only four franchises, while Sanofi has discontinued its research into diabetes. Oncology remains the only segment that no company wants to abandon, but it is unclear whether Sanofi and GSK will be able to catch up with their peers.

Chart 3


Above average: Novartis, J&J, Roche

Novartis, J&J, and Roche outperform their peers, with S&P Global Ratings-adjusted EBITDA margins of over 35%. Likely explanations for this are: a higher contribution from the more profitable U.S. market; a more mature portfolio that requires lower commercial expenses; and a more streamlined cost structure.

Average: AstraZeneca, GSK

AstraZeneca and GSK report adjusted operating margins of close to 30%. AstraZeneca faces elevated commercialization costs to market a relatively young portfolio and expand into new geographies. The same goes for GSK, with Shingrix and Arexvy, its two most important vaccines. The two U.K.-based companies also pay sizable milestone payments to third parties that we deduct from EBITDA.

Below average: Pfizer, Sanofi

Pfizer's EBITDA margin of 26.9% in chart 3 above excludes the $6.2 billion of one-off costs for inventory write-offs that reduced the company's profitability last year. These sizable costs meant that Pfizer's S&P Global Ratings-adjusted EBITDA margin was only about 16% in 2023. Pfizer's profitability has been much higher in the recent past, but has been hit by the steep decline of its COVID-19 products. Nevertheless, we expect a marked recovery of the group's profitability next year, to above the 30% mark, thanks to sizable cost savings. Pfizer should also benefit from its external growth policy, which entails lower R&D expenses but higher financial expenses.

With an adjusted EBITDA margin of only 26.5% in 2023, Sanofi ranks below its peers. A decline in sales of Aubagio, an old product for relapsing-remitting multiple sclerosis that enjoys a high gross margin and low marketing expenses, hit Sanofi last year. We anticipate an additional slight erosion in 2024 due to high R&D and advertising costs relating to recent launches and a pivotal trial under way.

Although Dupixent now adds to Sanofi's operating margins, it shares the profits with Regeneron, the U.S. biotech firm that conducted early research into the molecule. This, together with sizable year-on-year restructuring costs of over €1 billion, weighs on Sanofi's profitability. Lastly, Sanofi still operates a consumer health care business that has an inherently lower margin than pharmaceuticals. We foresee that Sanofi's profitability will improve significantly when the company separates its consumer health care business and as Dupixent gains further momentum.

We foresee that Sanofi's operating margin will improve in the medium term, thanks to ongoing cost-saving initiatives and a better return on its R&D. Sanofi has gradually transformed itself into a leading player in immunology, which, in our opinion, removes a significant amount of risk as statistically, the chances of success in immunology are higher than in other therapeutic areas. This is because the same molecule can be filed for various indications, like Dupixent for dermatitis, polyps, and chronic obstructive pulmonary disease. In addition, several molecules can often be combined. Sanofi also focuses on rare diseases, a franchise that is becoming less risky thanks to the use of artificial intelligence, which facilitates patient identification.

Product Concentration: GSK Has The Lowest Dependency Ratio

Dependence on key blockbusters can be an issue, but only when it coincides with a loss of exclusivity. In this respect, all seven pharmaceutical companies have successfully overcome previous patent cliffs. Roche is a notable case as it faced biosimilar competition for its three best-selling drugs each generating about $7 billion in annual sales within a short timeframe (2019-2021). Roche's impressive ramp-up of new products enabled it to overcome this challenge.

Product concentration is likely to constrain our assessment of business risk to the lower category of strong. This is the case for Bristol Myers Squibb, which faces major losses of exclusivity in the coming years; AbbVie, which faces a biosimilar offensive on Humira to treat rheumatoid arthritis; as well as Eli Lilly and Novo Nordisk, which have high exposure to the glucagon-like peptide 1 franchise.

Chart 4


Above average: GSK

GSK has the least product concentration, as only 25% of its sales stem from its top three products. On the flip side, this also highlights the fact that GSK, unlike all its peers, has no blockbuster generating over $5 billion in annual sales. We nevertheless anticipate that GSK's product concentration ratio will increase as its two top vaccines gain momentum faster than its pharmaceutical products.

Average: Novartis, Roche, AstraZeneca

Novartis, Roche, and AstraZeneca each have a dependency ratio of around 35%. On the one hand, several blockbusters with annual sales exceeding $5 billion weigh on the ratio. On the other hand, the three companies have a diverse portfolio of blockbusters that offers them some protection.

Below average: J&J, Pfizer, Sanofi

J&J, Pfizer, and Sanofi each have a dependency ratio exceeding 40%. Unsurprisingly, these three companies are the only ones to have mega-blockbusters with annual sales exceeding $10 billion, namely Sanofi's Dupixent, Pfizer's COVID-19 vaccine, and J&J's Darzalex. While Dupixent and Darzalex still have a long period of exclusivity ahead, sales of Pfizer's COVID-19 vaccine are declining markedly as the COVID-19 pandemic recedes.

No One Company Stands Out

No one company dominates across all four benchmarks, even if some excel in particular areas. Moreover, the abovementioned classifications are not set in stone. They may change as companies file breakthrough products while old blockbusters lose exclusivity.

We expect all seven top-tier pharmaceutical companies to maintain their excellent business risk profiles despite ongoing and intensifying pricing pressure. This is thanks to the quality of their R&D engines and the broad variety of therapeutic areas they serve. In addition, all these companies have strong expertise in major technologies like chemistry, biologics, xRNA, and gene and cell therapies, which make them leading competitors in an industry where innovation and breakthrough discoveries are clear growth drivers.

The seven top-tier companies differentiate themselves from others that can report higher growth prospects and better operating margins, but are present in fewer therapeutic areas. Examples are Eli Lilly and Novo Nordisk, which benefit from skyrocketing sales of obesity drugs, but display less differentiation by number of diseases addressed. AstraZeneca, Roche, and Pfizer are now investing in the obesity market, and it will be interesting to see whether they can catch up with first movers Eli Lilly and Novo Nordisk. We have recently seen AstraZeneca become successful in vaccines despite it having no track record in this segment.


This report does not constitute a rating action.

Primary Credit Analyst:Nicolas Baudouin, Paris + 33 14 420 6672;
Secondary Contacts:Raam Ratnam, CFA, CPA, London + 44 20 7176 7462;
David A Kaplan, CFA, New York + 1 (212) 438 5649;
Arthur C Wong, Toronto + 1 (416) 507 2561;
Tulip Lim, New York + 1 (212) 438 4061;

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