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Pharma's $500B Cliff: Patent Expirations Loom
29 Aug
Summary
- Over $500 billion in projected sales face patent expiration by 2033.
- Merck's Keytruda and Novo Nordisk's Ozempic are major drugs nearing patent loss.
- Pharma companies are actively acquiring smaller firms to secure new revenue streams.
The pharmaceutical sector is on the cusp of its most significant patent expiration period in decades, threatening over $500 billion in projected global sales by 2033. Key blockbusters, including Merck's cancer immunotherapy Keytruda and Novo Nordisk's diabetes drug Ozempic, are set to lose patent protection within the next five years, leading to substantial revenue loss.
This impending patent cliff is driving unprecedented dealmaking in the industry, with companies spending billions on acquisitions to secure future revenue. For instance, Merck's stock surged after announcing a successful cancer vaccine trial with Moderna, a potential offset to Keytruda's approaching patent expiration in 2028.
Major drugmakers like Novo Nordisk, Merck, and Bristol Myers Squibb face significant exposure from upcoming patent losses. Novo Nordisk has 77% of its projected 2025 sales at risk by 2033, largely due to Ozempic's patent expiry. Similarly, Merck and Bristol Myers Squibb have over 65% of their sales exposed.
Companies are employing strategies to mitigate these losses, such as negotiating delayed generic entries and filing numerous patents, as seen with AbbVie's Humira. The active pursuit of new drugs and technologies is also fueling investment in biotech and a rise in capital raised by private investors.
