New Product Revenues: Shaping the Future of the Pharmaceutical Industry

Impact of Recent Product Launches on Revenue Growth

Recent product launches, such as Mounjaro, Zepbound, Abrysvo, WINREVAIR, and Reblozyl, have significantly driven revenue growth for major pharmaceutical companies like Eli Lilly, Pfizer, Merck, and Bristol-Myers Squibb. These launches have contributed to strong quarterly performances and are expected to continue bolstering revenues.

"Strong revenue growth in Q1 was driven by our recent product launches, primarily Mounjaro and Zepbound." --- (LLY, earning call, 2024/Q1)

"Excluding contributions from Comirnaty and Paxlovid, Total revenues increased $1.2 billion, or 11%, operationally, reflecting revenues from legacy Seagen products acquired in December 2023; continued growth from the Vyndaqel family and Eliquis; as well as U.S. revenues from Abrysvo following the launch of the older adult indication, partially offset by lower revenues from Sulperazon in China and oncology biosimilars in the U.S. See the Total Revenues by Geography and Total Revenues––Selected Product Discussion sections for more information, including a discussion of key drivers of our revenue performance." --- (PFE, sec filing, 2024/Q1)

"Growth was driven by ongoing launches in international markets. As Rob noted, we are very excited by the opportunity to positively impact the lives of adult patients with pulmonary arterial hypertension following the recent U.S. launch of WINREVAIR." --- (MRK, earning call, 2024/Q2)

"And when you think about, and for those who were able to join us on our enterprise business review back at the end of last year, We put out some goals around continuing our market leading growth and from 25% out through 35% to 7% growth, A number of very significant brands, in fact, 10 plus that are over 5,000,000,000 in potential, another $15,000,000,000 plus that are $1,000,000,000 to $5,000,000,000 in peak sales potential and many with them launching in this near term timeframe." --- (JNJ, conference, 2024/06/12)

"International sales growth benefited from the new market launches and we look forward to bringing Reblozyl to more patients with the recent first-line approvals in the EU and Japan." --- (BMY, earning call, 2024/Q1)

R&D Investments Driving New Product Revenues

Pharmaceutical companies are strategically investing in R&D to drive new product revenues. Pfizer allocated $5.2 billion to internal R&D, while Eli Lilly anticipates stronger sales from new launches and continued R&D scaling. Bristol-Myers Squibb is enhancing R&D productivity and efficiency, aiming for significant cost savings and streamlined operations.

"In MedTech, R&D investment was $0.6 billion, or 8.3% of sales, a slight decrease driven by phasing." --- (JNJ, earning call, 2024/Q1)

"This includes streamlining our operations and focusing the organization on what matters most, becoming more efficient in how we operate, improving R&D productivity and driving a culture that emphasizes speed and accountability. We're executing on our cost-reduction efforts and are on track to achieve the $1.5 billion in cost savings we announced in Q1." --- (BMY, earning call, 2024/Q2)

"In the first half of 2024, we returned $4.8 billion to shareholders via our quarterly dividend; invested $5.2 billion in internal R&D; and as expected, the completed business development activity was minimal." --- (PFE, earning call, 2024/Q2)

"And you should also expect to see within that mix, stronger sales and marketing growth as we get to new launches in the second part of the year and the R&D continue to scale the growth from what we've seen thus far. So those are the dynamics we see on operating margin for 2024." --- (LLY, earning call, 2024/Q2)

"Research and Development Research and development (R&D) expenses declined 7% in the first quarter of 2024 primarily due to lower charges for business development transactions, which included a $656 million charge for the acquisition of Harpoon in the first quarter of 2024, compared with charges of $1.2 billion for the acquisition of Imago and $175 million for a license and collaboration agreement with Kelun-Biotech in the first quarter of 2023." --- (MRK, sec filing, 2024/Q1)

Strategic Partnerships in New Product Development

Strategic partnerships are pivotal in new product development, with companies like JNJ, MRK, BMY, and LLY emphasizing collaborations and external science to enhance their portfolios and drive growth. These alliances bring promising assets and innovative medicines, ensuring long-term success and improved patient care.

"Additionally, several of the products and compounds discussed today are being developed in collaboration with strategic partners or licensed from other companies." --- (JNJ, earning call, 2024/Q1)

"shareholders. Strategic business development focused on the best external science remains an important priority for our company." --- (MRK, earning call, 2024/Q1)

"In the Q1, we closed 4 strategic transactions that added new promising assets to our business and integration is going well." --- (BMY, event transcript, 2024/05/07)

"Lilly now has a significant opportunity to create new medicines through a broad internal portfolio and active business development to support our long-term growth." --- (LLY, earning call, 2024/Q2)

"We consistently evaluate new business opportunities through a strategic and scientific lens to deliver value for patients and for Our preference is to be in areas in which we have internal capabilities and know how and also to pursue products that represent progress in improving the current standard of care." --- (JNJ, event transcript, 2024/04/25)

Regulatory Challenges Impacting New Products

Regulatory challenges impacting new pharmaceutical products include patent expirations leading to generic competition (BMY), stringent evaluations for nitrosamines (PFE), and a generally challenging regulatory environment (JNJ). Additionally, new products face hurdles in clinical trials and approval processes (LLY), and issues like off-tumor toxicities (MRK).

"Excluding foreign exchange impacts, revenues were flat. • Following the May 2021 expiration of regulatory exclusivity for Eliquis in Europe, generic manufacturers have sought to challenge our Eliquis patents and related SPCs and have begun marketing generic versions of Eliquis in certain countries prior to the expiry of our patents and related SPCs, which has led to the filing of infringement and invalidity actions involving our Eliquis patents and related SPCs being filed in various countries in Europe." --- (BMY, sec filing, 2024/Q2)

"The following select new molecular entities (NMEs) and new indication line extension (NILEX) products are currently in Phase 2 or Phase 3 clinical trials or have been submitted for regulatory review or have recently received regulatory approval in the United States (U.S.), European Union (EU), or Japan." --- (LLY, sec filing, 2024/Q1)

"In response to requests from various regulatory authorities, manufacturers across the pharmaceutical industry, including Pfizer, are evaluating their product portfolios for the potential presence or formation of nitrosamines." --- (PFE, sec filing, 2024/Q2)

"Just wanted to ask you in this sort of more challenging regulatory environment, what gives you confidence in a mid-twenty 20 foreclose for the deal?" --- (JNJ, M&A Announcement, 2024/04/05)

"Moving to Slide number 27. I'd like to share our excitement about our next IO asset, N0324, an innovative conditional CD4 T agonist that will be filed with regulatory authorities shortly. CD4T agonism is a highly desirable mechanism to boost T cell responses, but previous therapeutic efforts have been dogged by off tumor toxicities." --- (MRK, Investor Update, 2024/06/03)

Market Competition and New Product Success

Pharmaceutical companies like Pfizer, Bristol-Myers Squibb, Johnson & Johnson, Eli Lilly, and Merck are navigating a highly competitive market by leveraging study results, comparing launch performances, and exploring market expansion opportunities. Confidence in new technologies and strategic positioning are key to their success amidst intense competition.

"We believe these study results, along with learnings from our previous Phase 2 studies and data that we have accumulated from 1,400 participating patients, leave us well positioned to execute on a registration-enabling study as we work to deliver a competitive product in a rapidly growing market." --- (PFE, earning call, 2024/Q2)

"As far as market share, this is a highly competitive market. We look at launch analogs at the top of the funnel or written prescriptions and Sotyktu performance is ahead of products like Tremfya, Cosentyx, at the same time of their launch." --- (BMY, earning call, 2024/Q1)

"And let me be clear, we clearly see some competition, especially here in the U.S., especially between now and the time that we bring our PFA technology to market, we're confident." --- (JNJ, earning call, 2024/Q2)

"Chris Schott: And congrats all the progress. There seems to be a broader debate on the role emerging earlier-stage competition in the obesity market could play where that fits in the market broadly." --- (LLY, earning call, 2024/Q2)

"I think there's still a market expansion opportunity in China that will benefit both us and the competitors." --- (MRK, earning call, 2024/Q2)

Pricing Strategies for New Products

Pricing strategies for new pharmaceutical products are multifaceted, involving different models such as per package and yearly therapy costs (MRK). Growth in orthopedic products is influenced by patient volume, price, and new product introductions (JNJ). Additionally, tailored strategies for low- and middle-income countries are crucial for expanding access (MRK).

"We would like to comment that the prices of our products across all our business sectors are not immediately comparable because in healthcare, product can be assumed the product price can be assumed for 1 package, but also the yearly cost for therapy." --- (MRK, event transcript, 2024/04/26)

"I'd like to wrap up with the orthopedics question. Hips and knees are growing faster than the historic rates, could you sort of unpack that a little bit and give us an idea of how much of that is patient volume, price, new products or maybe something else? And have a great day." --- (JNJ, earning call, 2024/Q2)

"Dimas Zimmerman, you asked how many products we have designed specifically for low- and middle income countries and how this portfolio will be developed further. Our access to health strategy will enable access to over 170,000,000 patients per year in low and middle income countries by 2,030." --- (MRK, event transcript, 2024/04/26)

Patient Access and Affordability

Pharmaceutical companies are enhancing patient access and affordability through various initiatives. JNJ focuses on navigating insurance complexities, MRK reduces patient time in healthcare settings, BMY implements patient support programs, PFE benefits from out-of-pocket cost caps, and LLY highlights the potential of clinical trials for accessing new treatments.

"And so that is really across the payer landscape and then also what we're doing with patient services and ensuring that patients who the physicians want to prescribe it for have the ability to get access and to navigate through the whole insurance maze and everything and come out on the other end very successfully on the product." --- (JNJ, conference, 2024/06/12)

"And then from a cost to the healthcare system, the ability to not have a patient sitting in the chair for as long allowing for more patients to move through, we think actually drives access and improves the providing of care as well." --- (MRK, earning call, 2024/Q1)

"So we're actively doing patient support programs, patient access, but as well as educating physicians have an unmet need on atypicals and moving into really the first new therapy in schizophrenia in over a couple of decades." --- (BMY, conference, 2024/05/15)

"And then, obviously, over the course of '24 and '25, there's other dynamics with out-of-pocket cost caps, which create better access for patients, and that is helpful to volumes, and we're starting to see that in '24 in some parts of our business, including on Vynda." --- (PFE, earning call, 2024/Q1)

"7% of U.S. Cancer patients ever enroll in a clinical trial, despite it being a great way to access great care, to access standard of care oftentimes, to access new investigational medicines." --- (LLY, event transcript, 2024/06/03)

Future Outlook for New Product Revenues

Pharmaceutical companies like Eli Lilly, Johnson & Johnson, and Bristol-Myers Squibb are optimistic about future new product revenues. Eli Lilly plans to increase salable products by 1.5 times, Johnson & Johnson is expanding its product line, and Bristol-Myers Squibb's growth portfolio now represents 46% of its business.

"outlook for 2024. We raised guidance and we also made a commitment to at least increase the amount of salable products with at least 1.5 times the amount of salable products to second half of twenty twenty three." --- (LLY, conference, 2024/06/10)

"expansion of new products, including ACUVUE OASYS Max 1-Day Contact Lenses, TECNIS Odyssey in the U.S., and VARIPULSE in Europe and Japan.Our confidence in the business outlook remains unchanged." --- (JNJ, earning call, 2024/Q2)

"We are pleased with the performance of the business and in particular, the growth portfolio performance where revenues grew nicely in the first half and now represent, as David said earlier, 46% of the total business." --- (BMY, earning call, 2024/Q2)

"We raised guidance and we also made a commitment to at least increase the amount of salable products with at least 1.5 times the amount of salable products to second half of twenty" --- (LLY, conference, 2024/06/10)