Predicting the future is easy. Getting the prediction right is another thing altogether.
However, it's possible to predict with at least some degree of confidence which drugs are likely to be the biggest winners, if you don't go too far out into the future. Market research firm EvaluatePharma has done just that with its recently published report that projects the top-selling drugs in the world in 2024.
Which drugs rank at the top of EvaluatePharma's list? Here are the five biggest blockbusters of the future -- and the five companies that are poised to profit from these drugs: AbbVie (NYSE:ABBV), Merck (NYSE:MRK), Celgene (NASDAQ:CELG), Bristol-Myers Squibb (NYSE:BMY), and Pfizer (NYSE:PFE).
Six years from now will look like last year in one respect: AbbVie's Humira will still probably be the best-selling drug in the world. Humira ranked No. 1 in 2017 with sales of $18.9 billion (including revenue made by AbbVie's partner Eisai). EvaluatePharma projects that the autoimmune-disease drug will rake in less money in 2024, at $15.2 billion. However, that should still be enough for Humira to retain its top spot.
It seems likely that Humira will fall from No. 1 in subsequent years, though. Beginning in 2023, AbbVie faces biosimilar competition for the drug in the U.S. market, where roughly two-thirds of Humira's revenue is made.
Merck's Keytruda is expected to be the second best-selling drug in the world by 2024. EvaluatePharma thinks the cancer drug will generate sales totaling nearly $12.7 billion six years from now. Keytruda made $3.8 billion in 2017, which wasn't enough to make the top five blockbusters for the year.
One major factor for Keytruda to claim the No. 2 position within the next few years will be gaining approval for new indications. Merck is evaluating the drug in phase 3 clinical studies targeting several additional types of cancer, including breast cancer, colorectal cancer, nasopharyngeal cancer, renal cancer, and small-cell lung cancer.
Revlimid could slip from its No. 2 ranking in 2017 to No. 3 by 2024. However, EvaluatePharma expects sales for Celgene's hematology drug to increase from $8.2 billion last year to $11.9 billion.
There's one major risk for Revlimid, however. The drug's key patents have been challenged by rivals that want to market generic versions of Revlimid. With Celgene currently dependent on Revlimid for 63% of its total revenue, this threat contributes to the biotech being arguably the riskiest big drug stock on the market. However, Celgene likely will be able to reach an agreement with current challengers similar to its deal with Natco Pharma to hold off any significant generic competition in the U.S. for Revlimid for several more years.
Keytruda's main competitor, Opdivo, should be the fourth-biggest blockbuster in the world by 2024, according to EvaluatePharma. Bristol-Myers Squibb's cancer drug is projected to make $11.2 billion then, nearly double its sales of $5.7 billion in 2017.
Expectations have been lowered somewhat for Opdivo after Bristol-Myers Squibb reported mixed results in August 2017 from a phase 3 clinical study evaluating a combination of Opdivo and Yervoy as a first-line treatment for kidney cancer. Clinical results announced by the company for Opdivo in treating lung cancer haven't been as impressive as those that Merck has announced for Keytruda, either. Still, Opdivo is likely to enjoy continued sales momentum for years to come.
Bristol-Myers Squibb also landed another drug in the top-five list for 2024, anticoagulant Eliquis. EvaluatePharma projects that sales for the drug will top $10.5 billion. Bristol-Myers Squibb will share a significant portion of that revenue, however, with its commercialization partner, Pfizer.
Eliquis is already growing faster than Johnson & Johnson's Xarelto, another Factor Xa inhibitor that prevents blood clots. The real growth opportunity for Eliquis, though, could be in taking additional market share from warfarin, an older drug that's available in generic form.
Investing for the future
Are the drugmakers that stand to claim the biggest-selling drugs in the world in 2024 great picks for investors to buy now? Not necessarily. There are more dynamics impacting each of the five companies linked to these projected blockbuster drugs of the future.
I do especially like the prospects for three of these stocks, though. AbbVie has new drugs and a strong pipeline that should enable the stock to generate market-beating returns over the next decade. It's a similar story for Celgene. And over the next several years, Pfizer should move beyond the problems with declining sales for older drugs and issues with its sterile-injectables business.
All three of these stocks have attractive valuations. Two of the three -- AbbVie and Pfizer -- also pay dividends with juicy yields. It's difficult to accurately predict the future, but my hunch is that it will be bright for AbbVie, Celgene, and Pfizer.