This is a story that is completely about money, but it is not just a wealth story.
Eli Lilly's latest market value has exceeded 400 billion US dollars, becoming the ceiling of pure pharmaceutical enterprises, with a 3-year increase of over 160%; Novo Nordisk also increased by 149% in three years, just a few percentage points away from the market value of $400 billion.
This is the latest widely spread wealth story in the pharmaceutical industry after COVID-19 Vaccine.
Although their revenue has not yet reached the top 10 global rankings, their products are full of momentum. Eli Lilly has launched a super popular product with continuous iteration of Dulaglutide and Tilposide, and the dream of Alzheimer's field is also on the horizon; In the first quarter of this year, Novo Nordisk Smeaglutide sold for 4.2 billion dollars. With the expansion of more indications and oral preparations, 10 billion dollars is not a dream.
Amidst the hustle and bustle of wealth, we can see that rooted in sustainable demand, the ceiling of the entire pharmaceutical industry will continue to rise with the development of new drugs, and there is constantly enormous incremental space being excavated by technological progress.
It is better to be as big and comprehensive as Eli Lilly, or as sophisticated and specialized as Novo Nordisk. The real core may be that an excellent pharmaceutical enterprise should be an excellent rhythm master, be able to predict the ceiling of each product growth, and wake up the next growth baton before the existing growth momentum is exhausted.
Innovative drugs, wealth stories abound, and this $400 billion battle is not the end.
01
Eli Lilly launched a full-scale attack
Who is the largest pharmaceutical factory in the universe?
Since 2022, Eli Lilly's market value has risen by nearly 60%. With significant progress in Alzheimer's disease and weight loss recently, its market value has surpassed $400 billion, ranking first in the world for pure pharmaceutical companies. It is only 3 percentage points away from Johnson&Johnson becoming the world's largest pharmaceutical company by market value.
Eli Lilly's latest market value is $410.8 billion, or 2.8 trillion yuan, which is almost as high as the sum of Pfizer, Bristol-Myers Squibb, and Modena, although its revenue in 2022 is less than one-third of Pfizer's.
More importantly, Eli Lilly's latest P/E ratio is as high as 75 times, surpassing global pharmaceutical companies, indicating that the market has high expectations for its performance growth.
This is not difficult to understand. Compared with the patent cliff in the field of psychotropic drugs 10 years ago, Eli Lilly has launched a comprehensive attack in the four major disease fields of diabetes, tumor, immunity and nerve.
From the perspective of performance, diabetes is Eli Lilly's flagship business, contributing US $6.826 billion in revenue in 2022, accounting for half of the country.
Among them, Eli Lilly's current flagship product, GLP-1 receptor agonist Dulagopeptide, has a revenue of US $7.44 billion, a decline in growth compared with 2021, but still maintains a growth rate of 15%, becoming a heavy weapon for Eli Lilly to maintain its competitiveness in the diabetes market; Engelnet contributed $2.066 billion in revenue to Eli Lilly at a 39% growth rate.
In the long run, the growth of the company's diabetes business is far from over, the two blockbuster antidiabetic drugs Dulaglutide and Enggliptin are still strong, and the GIP/GLP-1 double receptor agonist Tirzepatide is ready to launch, which is regarded by many as a strong competitor of the next drug king.
Tirzepatide is a GIPR/GLP-1R double agonist that is injected subcutaneously once a week. It was approved by FDA for type 2 diabetes in May 2022, and is the first new type of diabetes drug approved in the past decade. Less than 9 months after going public, sales reached $483 million.
Not only in the field of diabetes, Eli Lilly is also developing Tirzepatide to treat obesity and ejection fraction retention heart failure with obesity, NASH, etc. Some analysts predict that if it is approved for the treatment of NASH, heart failure, diabetes, obesity and other eight indications in the future, Tirzepatide may become the first drug with an annual sales revenue of 100 billion dollars by 2032.
On April 27th, the latest phase 3 clinical study results of Tirzepatide were released, and the weight loss effect was astonishing. The average weight loss of subjects in the low-dose group was 13.4%, about 13.5 kilograms, or 27 pounds; The average weight loss of subjects in the high-dose group was 15.7%, reaching 15.6 kilograms, exceeding 30 kilograms, and the effect was satisfactory.
At present, Eli Lilly has submitted a rolling application for listing weight loss indications to FDA. If it successfully enters the market, Tirzepatide is expected to compete with Smeglutide of Novo Nordisk for a huge weight loss market.
In the field of cancer, with the adjuvant treatment indications for breast cancer approved last year, the income of CDK4/6 inhibitor Abhisili increased by 84%, becoming one of the best performing drugs of Eli Lilly in 2022.
In addition to CDK4/6 inhibitors, Eli Lilly has also bet on popular tumor targets such as RET, KRASG12C, BTK, and PI3Ka. With the potential of the king of mebetters, the future is destined to be full of highlights.
Although Eli Lilly's field of autoimmune diseases has a late layout, it is also rapidly rising, with revenue exceeding $3.3 billion in 2022. Currently, in addition to expanding the indications for IL-17A inhibitors, Eli Lilly is also developing self immune star targets such as IL-2, IL-23, and IL-13. It can be seen that Eli Lilly is also full of expectations in the field of autoimmune diseases.
At the same time, Eli Lilly has never deviated from its research foundation in neurological and metabolic medicine. In 2022, although the main products of the neurological disease sector only contributed $1.5 billion in revenue, they contain a potential blockbuster product in the future - Alzheimer's disease drugs.
Eli Lilly has demonstrated to the outside world that it has taken the difficult bone in the Alzheimer's field, and its product donanemab has reached the main endpoint in the Phase III study of treating early-stage symptomatic Alzheimer's disease patients, achieving a 35% reduction in cognitive decline and a 39% reduction in the risk of patients entering the next stage of the disease. Eli Lilly stated that Donanemab is expected to be approved for listing in the first half of 2024.
Although safety still needs improvement, the capital market's expectations for Alzheimer's drugs have been met, and Eli Lilly has officially crowned the world's largest pure pharmaceutical company in terms of market value.
02
Novo Nordisk's weapon
Since 2021, in this $400 billion battle, Johnson&Johnson has not encountered an opponent for too long.
Two years later today, Eli Lilly is only one step away from surpassing Johnson&Johnson. Novo Nordisk, which holds Smeaglutide, is also on the way, with its latest market value of 378.6 billion dollars.
I have to lament the ability of GLP-1 to create a new drug king.
In the past hundred years, Novo Nordisk has continuously cultivated in the field of diabetes and extended to the field of obesity. According to the company's 2022 financial report, its diabetes and obesity management business revenue accounts for nearly 90% of the total revenue.
In 2022, Novo Nordisk's annual revenue will reach DKK 177 billion, an increase of 16%. Among them, the revenue of the entire GLP-1 target was 83.4 billion Danish kroner, a significant increase of 56%; Insulin revenue reached nearly 53 billion kronor, a decrease of 11%; The sales revenue of the obesity management sector reached 16.9 billion kronor, a significant increase of 101%.
Based on the explosive power of GLP-1, Novo Nordisk also surpassed Eli Lilly in March and became the world's largest pure pharmaceutical enterprise in terms of market value.
In the first quarter, Novo Nordisk's revenue growth was more impressive, with a total revenue of DKK 53.367 billion, up 27% year on year.
Among them, Smeglutide once again handed over a dazzling transcript. Its subcutaneous injection preparation Ozempic achieved a revenue of 19.64 billion Danish kroner, a year-on-year increase of 63%, and the sales of the oral tablet Rybelsus reached 4.356 billion Danish kroner, a year-on-year increase of 111%; The sales of the weight loss product Wegovy reached DKK 4.563 billion, a year-on-year increase of 225%.
This also means that the series products of Smeglutide alone contributed a total sales revenue of DKK 28.559 billion (about US $4.2 billion) to Novo Nordisk in the first quarter of this year, which is undoubtedly becoming an important performance growth driver.
Two months ago, Novo Nordisk announced the key results of the Phase IIIb PIONEERPLUS study of smeglutide oral tablets (25mg, 50mg) in the treatment of adult patients with type 2 diabetes mellitus.
The results showed that, from the perspective of the investigational drug, at week 52, the HbA1c reduction effect of 25mg and 50mg doses was more significant compared to the 14mg dose. In addition, the weight of patients in the 25mg and 50mg groups decreased by 7.0kg and 9.2kg compared to baseline (96.4kg), respectively, with a significantly better weight loss effect than the 14mg group (4.5kg).
Based on this, Novo Nordisk is expected to submit the marketing application for the new specification of oral smeglutide in the United States and the European Union this year. In June, Novo Nordisk will also announce the weight loss effect of Smeaglutide 50mg in overweight or obese people.
Not only that, Novo Nordisk is also accelerating the approval of smeglutide's weight loss indication in China. In August last year, the Phase III clinical trial of the weight-loss indication for Smeglutide injection in China was completed, and the clinical indication for oral tablet weight-loss has also been approved.
It is not difficult to imagine that with the expansion of the aforementioned indications and oral formulations, Smeglutide will further expand its territory in the obesity battle.
According to Morgan Stanley's prediction, Novo Nordisk's obesity income will reach 11.7 billion US dollars in 2030, which will start a new growth engine.
In the past, it may have been hard to imagine that Novo Nordisk was able to outdo others only with diabetes. The reality is that hypoglycemic drugs have brought Novo Nordisk an unexpected "sideline" - the weight loss market. According to Morgan Stanley's prediction, Novo Nordisk's obesity income will reach 11.7 billion US dollars in 2030, which will start a new growth engine.
03
Enlightenment of $400 billion
As Roche CEO Everin Schwan said, the success of science cannot be planned, but we can create conditions that enable it to be achieved; We need to be open to new ideas, brave in taking risks, and occasionally challenge the widely held views of the public.
It is precisely pharmaceutical scientists and researchers who have overcome difficulties that have led to the emergence of great biopharmaceuticals and the emergence of wealth stories.
The wealth story of Eli Lilly and Novo Nordisk is like a mirror, reflecting the strategy, ability and ambition of large pharmaceutical enterprises, as well as the expectations and aspirations of the market.
As for whether they are large and comprehensive or refined and specialized, there is no distinction between these two models, and each has its own supporters.
From the growth history of Eli Lilly and Novo Nordisk, we can draw a conclusion that behind the battle for US $400 billion, it is a victory of "big and comprehensive" as well as "refined and specialized".
The former is extremely strong in the field of diabetes, but its sphere of influence is not limited to this market. As mentioned above, in addition to diabetes, Eli Lilly has dabbled in the field of cancer, autoimmunity and neurological diseases, and has found many growth points.
Of course, this cannot be achieved without Eli Lilly's own research and development capabilities. In the external impression, Eli Lilly is a follower and also a pharmaceutical company that likes to experiment head-on with people.
Indeed, Eli Lilly's star products are mostly fast following mebetters, and they have been proven to be mebetters through various head to head clinical trials. At the highly eye-catching GLP-1 track, Eli Lilly is also a follower.
In 2009, Novo Nordisk launched the world's first GLP-1 analog, Lilalutide, which ushered in a new era of hypoglycemic; In 2017, Novo Nordisk launched the long-acting hypoglycemic drug Smeaglutide.
Around Smeglutide, Novo Nordisk once again gave play to its "refined and specialized" research, and tried to tap all the potential of Smeglutide by expanding the indications, increasing the dose, and combining with other drugs.
At present, Smegglutide has become the ruler in the GLP-1 field. Driven by it, Novo Nordisk will occupy 31% of the global market share of hypoglycemic drugs by the end of 2021, and the weight loss market will have endless imagination.
Attracted by the huge market, Eli Lilly has once again decided to face each other head-on. In April this year, it announced the launch of the Phase III clinical study on weight loss of Tirzepatide head to head megglutide (Wegovy), which aims to evaluate the effectiveness and safety of tirzepatide compared with smeglutide (2.4mg) for adult obese or overweight patients with weight related complications in non-2 diabetes.
There are many key choices that make a company successful, and in similar situations, the choices of different companies may be completely different. Back to the $400 billion battle between Eli Lilly and Novo Nordisk, if there is anything in common, it may be that the ceiling of the entire pharmaceutical industry will continue to rise with the development of new drugs, and there will be huge incremental space dug out by technological progress.
This is the latest wealth effect in the world of innovative drugs, with surging tides and everyone still rushing in.
To maintain the position of being the world's top pharmaceutical company in terms of market value, challenges are everywhere.
