- Citing the success of product launches, the ratings firm Moody's has raised the outlook for the pharmaceutical sector from "neutral" to "positive."
- Projected annual EBIDTA for the global biopharma industry is 4% to 5% over the next 12 to 18 months.
- One of the industry's biggest areas of growth is oncology, driven largely by the emergence of immuno-oncologic drugs, such as Bristol-Myers Squibb's Opdivo and Merck's Keytruda.
The consolidation of several key factors is driving growth of the multinational biopharma industry, which has led Moody's to upgrade the near-term and mid-term outlook. In addition to successful launches, a major factor is robust acquisition activity, which has led to synergistic cost reductions as well as portfolio synergies and the ability to shore up core offerings.
Many biopharma companies are involved in mergers and acquisitions in order to benefit from greater scale and diversification, as well as stronger pipelines. Specialty pharmaceutical companies, including Allergan and Valeant, are emerging as major beneficiaries of this trend. In addition, innovation in R&D has further bolstered pipelines, making the outlook even more positive 12 to 18 months down the line.
Leveraging synergies, cutting costs and being innovative are all good for the industry, but there are still challenges ahead---notably the sustainability of high prices, which is already affecting profitability in Europe and Japan, where national health systems and patients are relying more and more on generics.
Add to that the increased penetration of biosimilars, including the upcoming launches of biosimilar versions of Amgen's Neulasta and Pfizer's Enbrel, and it is clear that companies need to consider the long-term outlook for sustainable pricing as they plan for 2018 and byond.