Epoch 29: Predominant Biopharma Phenotypes in 2050
Healthcare Amazon/Visa, Precision Biotech, Mega Biotech
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Hello Avatar! Welcome back for another week of biotech analysis. On Sunday’s we aim to give you the forward looking topics, the intent is to be more provocative and forward thinking vs. the Thursday market updates which are more a survey of what is happening today. Today is going to be a culmination of our writing over the past 5 weeks in which we took you through the history of biopharma and forward to 2050. It is clear the AI-revolution has arrived and the future will likely be some sort of hybrid of what Big Pharma and Big Tech bring to the table. Two weeks ago we compared these models, and last week we brought you up to speed on the most recent trends in AI. Today, we will finalize by painting the picture of how this all comes together in 2050 - what the phenotype of biopharma could look like.
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TRILLION DOLLAR BIOPHARMA
Over the past few weeks we have been building on the concept of R&D 2050 - this has gotten us thinking - is a trillion dollar biopharma company in the cards? Today we will explore this in further detail. For those of you who may have missed the lead up to today we refer you to:
Epoch 24: BIOPHARMA HISTORY & BEYOND (Part 1 of 3)
Epoch 25: BIOPHARMA HISTORY & BEYOND (Part 2 of 3)
Epoch 26: BIOPHARMA HISTORY & BEYOND (Part 3 of 3)
Epoch 27: Big Pharma vs. Big Tech
Epoch 28: AI for Biopharma 2050
Now to today’s topic - trillion dollar biopharma. Doing some back of the envelope math suggests that $170B in top line revenue would result in a $1T market company (a 5-6x in revenue)
In 2022, Pfizer delivered $100B in revenue, so one could say 2 Pfizer’s delivering a near monopoly on pandemic products would do the trick. The problem is the COVID products were more of an anomaly. While large products are sure to come there will be intense competition as there always is. Without the COVID revenues Pfizer is a $50B company, so one would need 4 Pfizer’s to deliver a $1T market cap organization. At a certain point scale becomes a liability in the field of innovation so we have our doubts.
The other interesting comp is J&J. J&J delivered $90B+ in 2022 and most project them to routinely eclipse $100M in the coming years. It is a different business model, more of a diversified play with a therapeutics, diagnostics, and consumer business. Even with this diversified setup, the company would still need to double its size! Again, we see the complexity of a mega entity of that size struggling to deliver growth.
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