Epoch 40: Trillion Dollar Biopharma - Tech vs Biotech

Iphones vs Medicines

Hello Avatar! Welcome back for another week of biotech analysis. Today is Sunday, which means this is our Building Biotech newsletter that is focused on discussing biopharma strategy topics. Today, we explore the elusive goal of a trillion-dollar biopharma company. Pfizer's $100B revenue in 2022 brought it close, though driven largely by temporary pandemic sales. We’ll also assess whether emerging areas like obesity treatments can meet the projected $100B in revenues. Comparing biopharma to tech, we’ll examine why biotech faces scalability challenges—such as geographic and market constraints—that hinder breaking revenue ceilings achieved in other industries. Lastly, we’ll consider what it would take for biotech to reach a $1T valuation and why the sector has yet to do so.

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Trillion Dollar Biopharma

Trillion Dollar Biopharma is not a topic that is new to us, we encourage you to check out our previous writing on the topic below.  As a refresher:

“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)”

Just how far off are we from realizing this?  Well Pfizer currently holds the record to our knowledge (with J&J close behind) in terms of delivering Biopharma revenues topping off just north of $100B in 2022.  That is not that far off, only another $70B and you are there.  The problem is for Pfizer is that the 2022 bump was due to a pandemic that quickly faded.  In fact, in the same year (2022) the company began to announce cost cuts!  If we turn to the new kid on the block - obesity, analysts are forecasting >$100B in revenues, that could bring us close.  But how will that forecast really hold up given the intense competition in that space?  We will find out.

Therapeutic Blockbusters vs. iPhones