[NEWSMP] Even as global big pharma’s growth has slowed down as the COVID-19 pandemic winds down, the burden of R&D expenses for big pharma has increased significantly.
Newsmp recently compiled reports from the major global big pharma companies that have released their annual results for 2023, and found that half of the 17 companies surveyed saw a decline in revenue, while only two companies saw a decrease in R&D spending.
In particular, the combined revenue of the 17 companies surveyed was slightly lower than in 2022 due to the sharp drop in COVID-19 related sales, but the combined R&D expenses increased by more than 20%.
By company, MSD’s R&D expenses more than doubled, and Moderna’s R&D expenses increased by nearly 50%, with 10 of the 17 companies surveyed increasing their R&D expenses by more than 10%.
MSD reported only 1.4% sales growth last year, but its R&D expenses surged by 125.4% from 18 trillion won to 40.7 trillion won(based on the exchange rate on February 26).
Moderna’s annual revenue plunged by a third of 2022 as COVID-19 vaccine sales plummeted, but R&D expenses jumped 47.0% from 4.4 trillion won to 6.5 trillion won.
Novo Nordisk, which posted the strongest growth among big pharma last year, led by the semaglutide family, saw R&D expenses surge by 34.9%, exceeding its sales growth rate.
Lilly’s R&D expenses also increased by nearly 30% over the same period, while Novartis’s R&D expenses increased by more than 20%.
In addition, R&D expenses of Abbvie, Gilead, GSK, Organon, AstraZeneca, and Biogen showed double-digit growth.
Modenra’s R&D to revenues ratio jumped from 17.1% to 70.8% as a result of a sharp increase in R&D expenses amidst significant drop in revenue.
MSD has reported sales growth of just 1.4%, while R&D expenses more than doubled, with the R&D ratio more than doubling from 22.9% to 50.8%, surpassing 50%.
Pfizer reduced R&D expenses by 6.6%, but revenues plummeted more than 40% during the same period, its R&D ratio increased 6.9%p from 11.4% to 18.3% as result.
Novartis, Biogen, Gilead and AbbVie recorded an increase of around 3%p in R&D ratio, and Lilly, AstraZeneca, GSK, Roche also showed an increase of around 2%p in R&D ratio. None of the surveyed companies had a decrease in R&D ratio.
Meanwhile, among the 17 big pharma companies compiled by Newsmp, MSD had the highest R&D spending last year, topping 40 trillion won, followed closely by Johnson & Johnson and Roche at 20 trillion won.
Next was Novartis with 15.1 trillion won, AstraZeneca with 14.6 trillion won, Pfizer with 14.2 trillion won, Lilly and BMS with 12.4 trillion won, GSK and Abbvie with 10.2~10.3 trillion won, exceeding 10 trillion won.
Moderna had the highest ratio of R&D to revenues with 70.8%, followed by MSD with 50.8%.
Lilly was next with 27.3%, Biogen and Novartis with 25.0%, AstraZeneca with 23.9%, Roche with 22.5%, Gilead with 21.1%, BMS with 20.7% and GSK with 20.5%, exceeding 20%.
