In the years between 2021 and 2023, the pharmaceutical industry experienced mixed fortunes. While the stock market for American big pharma companies saw impressive growth, with sales of blockbuster drugs driving the index’s rise by a third, smaller biotechnology companies struggled. The pandemic-era euphoria for medical products dissipated as interest rates rose, making it difficult for unlisted startups to attract capital. Investments dropped from $37 billion to $17 billion in just two years, resulting in fewer startups going public and more going bankrupt.
Despite these challenges, major pharmaceutical companies continued to perform well. On April 30th, Eli Lilly reported strong quarterly results, following in the footsteps of its Danish rival Novo Nordisk on May 2nd. Both companies had hit anti-obesity drugs that contributed to their impressive growth. The combined value of these two giants increased from $350 billion to $1.2 trillion in just three years. However, there are positive signs for the biotech sector as well. Their overall health improved during this period, providing hope for investors, patients, and the entire pharmaceutical industry moving forward.
The drugmaking business has been experiencing contrasting states of health over the past few years. While American big pharma has been performing well due to robust sales of blockbuster drugs and outperforming the broader stock market by a third, smaller biotechnology companies have been struggling with rising interest rates and dissipating pandemic-era euphoria for all things medical.
Unlisted biotech startups found it challenging to attract capital during this period, with investments dropping from $37bn to $17bn in just two years. As a result, fewer startups went public and more went bankrupt.
However, despite these challenges, major pharmaceutical companies continued to thrive during this time period. Eli Lilly reported strong quarterly results on April 30th due to its hit weight-loss treatment while Novo Nordisk was expected to do similarly on May 2nd with its own anti-obesity drug.
The combined value of these two giants increased from $350bn to $1.2trn in three years – a significant boost for the industry.
While there have been some setbacks for biotech companies during this time period – including struggles with attracting capital and declining pandemic-era euphoria – there are also positive signs moving forward.
Overall health is improving within the sector which is promising news for investors, patients and the pharmaceutical industry as a whole.