Eli Lilly, Novo Nordisk Lead Revenue Boom in the ‘Always Tricky’ Q4
In the biopharma industry, revenues continued to surge in the fourth quarter of last year, highlighting a thriving market trend as we progress into 2024. As of February 24, of the world’s 22 biopharma companies that reported quarterly revenue exceeding $2 billion, only one recorded a year-over-year decline. This exception, Teva Pharmaceuticals, experienced a 5% drop due to a significant upfront payment in a collaboration with Sanofi during the fourth quarter of 2023, which had been classified as revenue.
A Glance at Q4 Revenue Trends
In the context of the broader industry, such a singular decline in revenue is noteworthy. For instance, seven companies reported falling sales year-over-year in the first quarter of 2024. Pankit Bhalodia, West Monroe’s managing director of healthcare and life sciences, emphasized the unpredictability associated with the fourth quarter, hinting at potential upcoming changes under the new administration, which could stimulate demand.
Leaders of Revenue Growth: Eli Lilly and Novo Nordisk
Among the key players leading the revenue boom in Q4 were Eli Lilly and Novo Nordisk, boasting impressive growth rates of 45% and 30%, respectively. These figures marked the highest growth for both companies in any quarter of 2024. Remarkably, Lilly has posted at least a 20% increase for seven consecutive quarters, while Novo has achieved over 20% growth for 12 straight quarters.
Sales from diabetes and obesity medications played a significant role in these gains. Eli Lilly reported a 32% revenue increase in 2024, while Novo enjoyed a 26% revenue increase for the year. Notably, Lilly’s revenue growth wasn’t solely reliant on its GLP-1/GIP products; its non-incretin drugs also surged, driven by strong performances from breast cancer treatment Verzenio and heart failure drug Jardiance, which garnered quarterly sales figures of $1.6 billion and $1.2 billion, respectively.
Since announcing anticipated revenue growth of 32% for 2025 at the J.P. Morgan Healthcare Conference, Lilly’s market capitalization skyrocketed from $745 billion to $844 billion, significantly more than any of its industry counterparts. The enthusiasm from investors was largely tied to the promising prospects for Lilly’s obesity treatments, with CEO David Ricks asserting that the company has not yet near the “edge of the demand curve.” Steven Lupo from West Monroe echoed this sentiment, suggesting significant growth potential within the GLP category for various indications.
Novo’s Cautious Optimism
In contrast, Novo Nordisk has projected a more conservative approach, anticipating a revenue growth between 16% and 24% in 2025. Following this announcement, Novo’s market cap marginally increased to $349 billion, solidifying its position as the highest-valued biopharma firm in Europe.
Other Noteworthy Contributors
Of the 22 biopharma companies that reported Q4 revenues exceeding $2 billion, nine achieved double-digit growth, while another nine reported single-digit increases of at least 5%. AstraZeneca stood out with a 24% revenue increase, mainly due to strong sales in oncology and respiratory treatments, capping off a robust year with overall sales growth of 18%. The company, however, expects a slowdown, with projections of a high single-digit growth in 2025.
Pfizer exhibited a remarkable turnaround, bouncing back from a 19% decline in Q1 to a 23% growth in Q4, significantly bolstered by its Seagen acquisition and a notable spike in COVID-19 product sales, which reached $4.1 billion.
Astellas also performed admirably, achieving a 22% revenue increase driven by the success of its prostate cancer treatment Xtandi and bladder cancer drug Padcev. However, the company faced substantial challenges as it wrote off impairments connected to underperforming treatments, underscoring the variability in the landscape.
Finally, Vertex and Novartis also delivered revenue growth of 15% each, while AbbVie and Gilead Sciences demonstrated modest growth rates of 6% each, indicating a recovery in the case of AbbVie following the expiration of Humira’s exclusivity.
Conclusion: A Mixed Bag of Results
Despite strong performances from leading companies, the fourth quarter also showcased several disappointments. For example, GSK managed only a 1% increase due to a significant drop in demand for its respiratory syncytial virus vaccine. Similarly, Takeda’s growth cooled to a mere 3% after achieving double-digit gains in prior quarters. The upcoming regulatory environment, especially with uncertainties following the new administration, raises concerns for many drugmakers, particularly those reliant on vaccines. As noted by Lupo, the industry is anxious about regulatory pathways affecting new product launches, signaling that future growth may hinge on careful navigation of the evolving landscape.