The pharma industry is always in flux, but the big names always turn up near the top of yearly sales rankings. This year is no different, with Johnson & Johnson, Roche, Pfizer, Novartis and Merck & Co. taking the top 5 spots in Big Pharma companies by 2018 sales.
In fact, the top 15 names are the same against prior year rankings, but the order has shifted. Last year’s No. 5, Sanofi, slipped to No. 7 as its sales sank almost 2% year over year. Gilead Sciences, famously under hepatitis C pricing pressure for years, sank even farther in 2018, slipping three positions to No. 13.
On the flip side, Bristol-Myers Squibb climbed from No. 15 to No. 12. And if the company scores its massive Celgene buyout, it’ll be even higher next year. Adding Celgene’s $15 billion in 2018 revenue would have given BMS nearly $38 billion in annual sales, ranking it among the top 10 pharma companies by annual sales
And next year’s ranking will see at least one entirely new entrant in Takeda. The Japanese biopharma recently scooped up Shire but hasn’t released its combined financials for 2018 to make it eligible for the rankings.
Many companies on this list have faced big patent losses in recent years, while some have big launches coming up, too. Amgen and Johnson & Johnson saw their first copycat competition for anemia drugs Procrit and Epogen last year, while Amgen also had to face off against Neulasta biosims.
Looking ahead, several of these top companies will be working on blockbuster launches. Market watchers believe AbbVie, which markets the world’s top drug, Humira, will win approval for rheumatoid arthritis drug upadacitinib this year. Analysts predict the drug will generate $2.24 billion by 2024, a much-needed boost as megablockbuster Humira starts facing biosims in 2023. Novartis, AstraZeneca and other drugmakers have blockbuster launches slated for 2019 as well.
For these rankings and company profiles, FiercePharma consulted company earnings reports, securities filings, earnings transcripts and analyst reports, plus our own archives. We segregated Bayer’s crop sciences unit as too far removed from human or animal health but included healthcare businesses at other top drugmakers, such as J&J’s medical devices and Roche’s diagnostics divisions.
We converted 2018 results to U.S. dollars using average exchange rates for the year provided by drugmakers. Average conversion rates for the year were 1 Swiss franc to $0.98 USD, £1 to $1.33 and €1 to $1.18.
Boehringer Ingelheim might have generated enough sales last year to make the list, but the company doesn’t report until April 17. We’ll update the report after Boehringer releases 2018 results.
Beyond their individual challenges, these top-ranked companies saw plenty of shared changes and setbacks last year. The Trump administration rolled out numerous drug pricing measures and proposals, some favored by the industry and others hated. In one big setback, last year Congress boosted their share of responsibility in Medicare Part D’s “doughnut hole.” The change could cost some companies hundreds of millions of dollars, or even billions, each year. But drugmakers support the administration’s proposal to shake up rebates in Medicare and Medicaid.
Overall, the industry garnered approvals for 59 novel drugs last year, setting a record, according to the FDA. Among them were the pharma industry’s first cannabinoid-derived drug, Epidiolex from GW Pharma, and several new CGRP migraine prevention drugs. Amgen and Novartis, Teva and Eli Lilly are working to build that new class.
Drugmakers face some big question marks in 2019. With Democrats in control of the U.S. House, lawmakers have already called top CEOs on the carpet to explain their drug pricing, and numerous bills aimed at cutting drug costs are in the offing.
And perhaps more importantly, FDA Commissioner Scott Gottlieb, M.D., will be handing over the reins. It remains to be seen who the Trump administration will tap to run the agency and just how active that new chief might be. During his time at the FDA, Gottlieb garnered an industry-friendly reputation, instituted new programs and guidelines across the board, and worked hard to fight high drug costs.
If you’d like to check out previous rankings, you’ll find our top pharmas by 2017 revenues report here, and our 2016 edition here. As always, let us know if you have questions, comments or suggestions.
1. Johnson & Johnson
Johnson & Johnson
2018 revenue: $81.58 billion
2017 revenue: $76.45 billion
Headquarters: New Brunswick, New Jersey
Every year, Johnson & Johnson far and away tops the list of drugmakers ranked by total revenue. Every year, in recent memory at least, the company posts big gains for its prescription drug portfolio. Pharma, in fact, has been J&J’s growth engine through trouble for its medical devices business and a slowdown in consumer health.
Last year, for instance, J&J’s pharma business brought in $40.7 billion, an increase of almost $4.5 billion—or 12%—over 2017’s $36.26 billion.
J&J’s overall revenue came in at $81.58 billion, up a little more than $4 billion over the $76.45 billion the conglomerate brought in the previous year.
In other words, pharma accounted for the lion’s share of J&J’s absolute sales growth last year and just about half of its total sales. No doubt the company’s prescription drugs are valued at J&J.
One could argue, however, that J&J doesn’t belong in first place in this annual ranking. Roche reported CHF 56.8 billion in 2018 sales, 44 billion of that in its pharma division—more than J&J’s pharma business brought in. Novartis totted up $44.8 billion between its innovative medicines and generic-and-biosimilars group, Sandoz—also more than J&J’s pharma group.
But big drugmakers are messy. A big chunk of J&J’s consumer sales come from over-the-counter drugs, a segment that also contributes to GlaxoSmithKline, Pfizer, Bayer and Sanofi’s top lines. Animal health pitches in at Merck, Eli Lilly (for now) and Boehringer Ingelheim, among others. Roche boasts a diagnostics unit that produces some tests that work in tandem with drugs, but that’s far from all of its business. Novartis sells contact lenses through its soon-to-be-spun-off subsidiary Alcon. And so on.
Suffice it to say that J&J has a big medical devices division that accounted for $26 billion of its sales last year, and a consumer unit that brought in $13.8 billion, about a third of that from over-the-counter drugs. But for years now, J&J’s pharma business has powered the conglomerate’s growth. And that pharma business has outclassed most of its Big Pharma peers growth-wise, too.
What’s fueling all of that? Its immunology franchise, for one. Psoriasis and psoriatic arthritis drug Stelara ginned up $5.2 billion last year, a 28% year-over-year sales hike, and psoriasis newcomer Tremfya brought in $544 million, up from just $63 million in 2017. And those newer drugs delivered at the same time aging stalwart Remicade stubbornly clung to market share to pitch in $13 billion despite biosimilar competition. J&J has been so aggressive about hanging on to Remicade sales in the face of biosims, in fact, that one of its putative rivals sued, alleging that its payer contracting violates antitrust rules.
Then there’s Actelion, the new purchase J&J brought into the fold in 2017. The company’s pulmonary hypertension drugs Opsumit, Tracleer and Uptravi together brought in almost $2.5 billion. J&J’s anticoagulant Xarelto put in about the same amount—flat compared with 2017, partly thanks to stepped-up competition from Pfizer and Bristol-Myers Squibb’s Eliquis—while SGLT2 diabetes drug Invokana pitched in less than $1 billion as safety worries eroded its blockbuster sales.
But J&J’s oncology business really revved up in 2018. Fast-growing blood cancer drugs Imbruvica and Darzalex together brought in $4.5 billion; Darzalex alone surpassed $2 billion just two years after its launch. Prostate cancer drug Zytiga boosted sales by 40% to $3.6 billion. Overall, cancer drugs brought in almost $10 billion for J&J.
This year could bring some big changes, though. Remicade biosimilars from Pfizer and Merck started taking a real toll on the drug in the fourth quarter of 2018, and the J&J drug could lose more ground in the first quarter thanks to formulary changes that took effect Jan. 1. Eliquis looks poised to continue grabbing share from Xarelto. And Zytiga faces an even bigger threat. Generic versions could theoretically arrive any day now, thanks to a series of court losses that left it vulnerable to earlier-than-expected copycats. In November, J&J lost its bid to stop knockoffs from launching before its appeal to the Federal Circuit could be heard. Several companies, including Mylan, rolled out their copycats, making a dent in Zytiga’s fourth-quarter sales. This year, unless J&J manages to win its appeal, Zytiga is set for a long downhill slide.
What can make up the difference? J&J rolled out a new prostate cancer drug, Erleada, last February, and analysts figure it can reach $1.3 billion in sales in a few years; the company posted data in January of this year that could put it in line for another approval. Just last month, the company nabbed FDA approval for Spravato, an inhaled remedy for severe depression based on the party drug ketamine, and some analysts see that drug hitting $3 billion in annual sales down the line.
One thing is certain: No matter what happens with those drugs, J&J will again appear at the top of this list in 2020. The only question will be how much of a role its pharma business plays in that victory.
2018 revenue: $55.71 billion (CHF 56.85 billion)
2017 revenue: $52.23 billion (CHF 53.30 billion)
Headquarters: Basel, Switzerland
Roche successfully grew sales by 7% in 2018, even as biosimilar rivals unleashed their power in Europe. But 2019 will be the moment of truth for the Swiss drugmaker, as U.S. copycats to its trio of cancer megablockbusters—Herceptin, Rituxan and Avastin—are expected to arrive.
Roche’s Street-beating 2018 has multiple sclerosis rising star Ocrevus to thank, at least in part. In its first full year on the market, the drug easily busted the blockbuster barrier and raked in CHF 2.35 billion ($2.30 billion), making it the most successful launch in Roche’s history, according to CEO Severin Schwan.
And that’s just the beginning. In October, Roche unveiled five-year data that could further expand Ocrevus’ growth potential. The long-term trial showed that patients treated with Ocrevus earlier had better disease progression outcomes compared with relapsed MS patients who switched from interferon beta-1a treatment.
Despite the upside from Ocrevus, though, Roche faces the prospect of some real pain after its top three cancer drugs come under biosimilar assault in the U.S., which executives are expecting later this year. Investors will be watching Herceptin, Avastin and Rituxan sales closely to see how they fare against the competition. A lot is at stake: Those three drugs all grew sales in the U.S. in 2018, together pulling in more than CHF 10 billion.
In Europe, however, it was a different scene for those oncology stalwarts. In a scenario that could offer some hints at biosim erosion in the U.S., Herceptin and Rituxan saw European sales drop during the fourth quarter by 34% and 46% year over year, to CHF 354 million and CHF 185 million, respectively. Rituxan has yielded about half of its European market to the knockoffs, and Herceptin copycats have grasped one-fourth by volume in just seven months, according to Bernstein analyst Ronny Gal in a recent note to clients. Together, biosimilars cost Roche CHF 1.3 billion in 2018, according to Chief Financial Officer Alan Hippe, Ph.D.
Executives have yet to lay out specific forecasts for sales erosion in the U.S. All three drugs have copycats approved by the FDA, with many more to come, but there’s still uncertainty about when those knockoffs will launch and how the U.S. landscape will play out.
Projecting biosim entries in the second half, Roche pharma chief Bill Anderson said on the fourth-quarter call that they won’t have “a huge impact” on total 2019 numbers. That said, after that 7% growth rate for 2018, Roche is forecasting 2019 sales growth in the low- to mid-single digits.
Even with the expected biosim onslaught, Roche is still a major oncology force to be reckoned with. In its HER2 portfolio, Perjeta generated sales of CHF 2.77 billion, up 27%, thanks to its recent approval as an adjuvant treatment to prevent breast cancer recurrence after surgery. Kadcyla’s increase of 8% in 2018 wasn’t so impressive, but Roche recently won FDA real-time review for its use in the adjuvant setting. A previous phase 3 trial showed that the Herceptin follow-up beat its predecessor in terms of reduction in disease recurrence or death.
PD-L1 inhibitor Tecentriq—though still lagging far behind Merck & Co.’s Keytruda and Bristol-Myers Squibb’s Opdivo—has made some progress on the market and in the clinic. Last year, Tecentriq hauled in CHF 772 million, 59% more than in 2017. A regimen that combines Tecentriq, Avastin and chemo won an FDA green light in first-line non-squamous non-small cell lung cancer with no EGFR or ALK mutations. And in a market that Tecentriq could enjoy by itself for a while, the FDA recently approved a Tecentriq-chemo combo in first-line extensive-stage small cell lung cancer, an indication that could add $1.5 billion in Tecentriq sales, Baader Helvea analysts have said.
In another first-in-class nod, Tecentriq—paired with Celgene chemotherapy Abraxane—just became the first immunotherapy the FDA allowed in triple-negative breast cancer, after showing they could reduce the risk of disease worsening or death by 40% versus chemo alone.
Outside of oncology, hemophilia A therapy Hemlibra garnered CHF 224 million in its first year on the market—and its sales have been almost doubling every quarter. After Hemlibra nailed an FDA nod with flying clinical colors in patients without factor VIII inhibitors last October, Jefferies analysts predicted 2025 sales of $5.5 billion.
Roche also has its follow-up hemophilia plan ready. By taking in Spark Therapeutics in a deal worth $4.8 billion, the Swiss drugmaker gets phase 3-ready hemophilia A gene therapy SPK-8011 and phase 1/2 candidate SPK-8016, plus Spark’s entire gene therapy expertise, including manufacturing know-how—not to mention the first FDA-approved gene therapy, Luxturna, which treats a rare form of blindness.
With Luxturna and a few clinical-stage pipeline drugs, the Spark buyout will also complement Roche’s ophthalmology franchise, according to Jefferies analysts, given its currently reliance on Novartis-partnered wet age-related macular degeneration drug Lucentis, which will likely face biosimilar competition around 2021.
5. Merck & Co
10. Eli Lilly
12. Bristol-Myers Squibb
13. Gilead Sciences
15. Teva Pharmaceutical Industries