Some big pharma companies are keeping their earnings growth rally going despite blockbuster drug patent expirations. Unlike in the past, when the end of exclusivity on key drugs meant a growth stall risk for drugmakers, big pharma has been quickly investing to diversify their portfolios (new drug candidates), which observers say has lifted the commercialization success rate of follow-on medicines.
According to the industry on the 4th, AbbVie in the United States has raised its full-year sales outlook for three straight quarters this year. On the 1st, AbbVie lifted its 2025 revenue forecast to a company record high of $60.9 billion (about 87.7 trillion won).
That is an increase of $1.9 billion (about 2.7 trillion won) from the projection the company gave early this year. The gain is seen as driven by strong growth from the autoimmune disease treatments Skyrizi and Rinvoq.
Previously, the market had voiced concerns that sales would see a large gap once the patent expired on Humira, the autoimmune disease treatment that has powered the company's growth. Humira was the first medicine in the global pharmaceutical market to top $20 billion (about 28.7 trillion won) in annual sales.
But Humira's U.S. patent expired in 2023, and with biosimilars entering the market, sales took a hit. In the third quarter alone this year, Humira revenue fell 55% from a year earlier to $993 million.
AbbVie filled the Humira gap with new growth engines. Third-quarter sales of Skyrizi jumped 47% from a year earlier to $4.7 billion, while Rinvoq rose 35% to $2.2 billion.
Combined, the two products easily exceed Humira's single-quarter record high of $5.6 billion in the fourth quarter of 2022. AbbVie CFO Scott Reents said on the third-quarter earnings conference call that the outlook was raised for Skyrizi "because this therapy is expanding its market share in psoriasis and inflammatory bowel disease."
Johnson & Johnson (J&J) in the United States also increased results despite the U.S. patent expiration of the blockbuster autoimmune disease treatment Stelara.
The company said last month that third-quarter sales this year were $23.993 billion (about 34.5 trillion won), up 6.8% from a year earlier. Reflecting the trend, the company raised its full-year sales outlook by 5.7% from its prior projection to $93.5 billion–$93.9 billion (134.6 trillion won–135.1 trillion won).
Stelara's U.S. patent expired this year, and third-quarter Stelara sales fell 39.4% from a year earlier. Even so, gains from other drugs kept overall growth intact. In particular, Spravato, an antidepressant that cleared $1 billion in annual sales last year to become a blockbuster, surged 61.5% year over year in the third quarter.
Spravato is a nasal spray depression treatment approved by the U.S. Food and Drug Administration (FDA) in 2019 and currently on the market. Until now it had to be administered with an oral antidepressant, but this year it was approved for use on its own.
Other big pharma companies are also diversifying growth pillars ahead of patent cliffs to prevent earnings gaps and secure new growth drivers. U.S. Merck (MSD), which has the blockbuster cancer drug Keytruda, posted third-quarter sales of $17.28 billion, up 4% from a year earlier. With Keytruda's exclusivity ending in 2028, MSD is pouring R&D into an oncology pipeline, including next-generation Antibody-Drug Conjugate (ADC) therapies, to secure follow-on growth engines.
Patent expirations were once seen as a poison leading to growth stagnation for drugmakers, but lately they are also being viewed as spurs to innovation races in new drugs. Many big pharma companies have ramped up mergers and acquisitions (M&A), artificial intelligence (AI)-based drug development, and open innovation strategies ahead of expirations.
Bristol-Myers Squibb (BMS) is a good example. After the 2012 patent expiration of Plavix, the antithrombotic that had been a cash cow, the company went through a stagnation period. It then sold noncore assets and restructured R&D to bolster its portfolio for revenue recovery. The fruits were the anticoagulant Eliquis and the cancer drug Opdivo. These medicines delivered blockbuster-level sales and powered the company's growth.
In 2019, BMS acquired Celgene, a cell and gene therapy developer. The Celgene purchase both prepared early for the patent expirations of Opdivo and Eliquis and secured a pipeline in cell and gene therapies, viewed as the next-generation treatment paradigm.
An industry official said, "Even one blockbuster new drug can make a company grow explosively, but there is also the risk of relying on a single product due to patent expirations and rival therapies," adding, "Because these risks must be reduced, steady R&D investment and portfolio diversification strategies are important."