Click here to read the previous pharma outlook.
The world of pharmaceuticals has been rocked in large part due to the effects of COVID-19, and the market now finds itself in the pursuit of finding a way to end the pandemic. However, the virus will still present challenges in 2022.
The investment market for pharmaceuticals has shifted rapidly in response to the enthusiasm and development of the industry as more focus is placed on solutions to the global pandemic. However, according to experts, investments wrapped up 2021 in a bear market instead.
For 2022, investors might see a new deployment of capital and a focused approach to the market as a whole.
Here the Investing News Network (INN) presents a snapshot of what’s to come for investments in the pharmaceutical industry for the year 2022.
Pharma outlook 2022: Stock market shows trends within the world of pharma investments
In preparing their 2022 report on the biopharma world, the researchers at Evaluate Vantage found the “share price performances of large and small cap drug developers diverged over the course of 2021.”
According to the researchers, this trend will continue as 2022 settles into the market.
While sibling markets like biotech and pharmaceuticals are set up in a bear position at the moment, in the long run this could indicate a more stable level for small caps in the space.
“The declines this year are from heady heights, and many hope that a retreat in valuations will persuade buyers back to the table,” the Evaluate Vantage 2022 report indicated.
In their report the researchers pointed to the performance of the SPDR S&P Biotech ETF (ARCA:XBI) and the Health Care Select Sector SPDR Fund (ARCA:XLV) operating as benchmarks of the space and serving as trackers for small cap biopharma.
“The pandemic outbreak and swift recovery staged by healthcare stocks is clear in this chart, with the smaller groups in the XBI being propelled into bubble territory,” the report said.
Pharma outlook 2022: Next big drugs could focus on oncology and Alzheimer’s
A report from the IQVIA Institute for Human Data Science indicated oncology and immunology remain the two leading global therapy areas. Each one is expected to grow at least nearly 10 percent by 2026.
Other areas of interest in the market include diabetes, autoimmune disorders and therapies for Alzheimer’s and Parkinson’s.
“While COVID-19 has garnered the most attention in the two years, the vast majority of patients with other diseases will need to work around social disruptions to receive care,” the report said. “Major advances are expected to continue, especially in oncology, immunology and neurology.”
The researchers at Evaluate Vantage indicated they expect to see several developments in the Alzheimer’s space, specifically from Eli Lilly (NYSE:LLY) and Roche (OTCQX:RHHBY,SWX:ROG).
Beyond big name companies, the report points to projects from Mirati Therapeutics (NASDAQ:MRTX) and Reata Pharmaceuticals (NASDAQ:RETA), which are focused on lung cancer and kidney diseases treatment, respectively.
However, with smaller names in the space comes a higher level of attention for investors.
“Setbacks can never be ruled out for any project, but those owned by small developers should probably be considered high risk,” the report indicated.
Overall spending in medicine continues to provide results for companies in the pharmaceutical space.
“The global medicine market — using invoice price levels — is expected to grow at 3-6 (percent) CAGR through 2026, reaching about US$1.8 trillion in total market size in 2026, including spending on COVID-19 vaccines,” the report from the IQVIA Institute for Human Data Science said.
Pharma outlook 2022: Biggest drugs in the world set to move the needle
The attention COVID-19 demands has caused investors to enjoy the returns of vaccine treatments against the virus.
Evaluate Vantage expects the combined revenue from the Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX) and Moderna (NASDAQ:MRNA) vaccines will reach at least US$50 billion in 2022.
The data continues to point to Humira, a drug from AbbVie (NYSE:ABBV), as the top selling drug in the world, outside of COVID-19 treatments. Humira is expected to bring in just over US$20 billion in 2022.
However, this may be the last year for Humira’s dominance in the market as competitors are expected in 2023. In 2021 a congressional probe found AbbVie’s status as a top drug maker was aided in large part by price hikes to key drugs.
Here are the top companies by sales numbers, according to Evaluate Vantage:
- Pfizer – Nearly US$70 billion
- Abbvie – Shy of US$70 billion
- Johnson & Johnson (NYSE:JNJ) – Just over US$50 billion
- Novartis (NYSE:NVS) – Over US$50 billion
- Bristol Myers Squibb (NYSE:BMY) – Nearly US$50 billion
- Roche – Nearly US$50 billion
- Sanofi (NASDAQ:SNY) – Over US$40 billion
- Merck & Co. (NYSE:MRK) – Over US$40 billion
- AstraZeneca (NASDAQ:AZN) – Just over US$40 billion
- GlaxoSmithKline (NYSE:GSK) – Over US$30 million
Pharma outlook 2022: Investor takeaway
It’s a time like no other for pharmaceutical investments; the level of interest in the space from capital markets has never been stronger as the companies seek a way of finding solutions to the global problem of COVID-19.
Pharmaceutical investments may face a slide given the extreme highs at the onset of the pandemic. But the experts see this as a healthy sign for this space.
“After years of plenty the drug development sector is, for the most part, in a good place… The highs of the pandemic era could never be maintained, and many consider the current retrenchment part of the cycle,” the Evaluate Vantage researchers wrote in their report.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.