A blockbuster drug is one that brings in $1 billion or more in annual sales. Every pharmaceutical company aims for that level of sales. That's because these drugs often are the main drivers of the revenue engine. Blockbuster drugs accounted for 56% of the top 20 pharmaceutical companies' drug sales in 2018, according to a paper in Nature Reviews Drug Discovery.
So, blockbusters are great. But even in this category of high-revenue products, there are the superstars. And two companies are set to benefit from sales of these superstars this decade. I'm talking about Bristol Myers Squibb (BMY -0.99%) and Merck (MRK -0.65%). Two charts explain why.
Image source: Getty Images.
Vast product portfolios
First, it's important to note that Bristol Myers Squibb and Merck both have vast product portfolios covering a variety of treatment areas. Bristol Myers Squibb had eight blockbusters as of the end of last year and Merck had five. And Bristol Myers Squibb brought in full-year revenue of more than $46 billion while Merck generated more than $48 billion. These companies already are delivering major revenue. But growth from here could continue.
The following chart shows a forecast of the top 10 pharmaceutical products by sales four years from now. And the top two are Merck's Keytruda and Bristol Myers Squibb's Opdivo. They're set to bring in more than $26 billion and more than $14 billion, respectively. Both are oncology drugs.
Image source: Statista.
The top-selling drug category
Now, let's move on to our next chart. This one shows sales of oncology drugs -- already the top-selling drug category -- continue to grow. In fact, oncology drug sales are expected to climb 82% to more than $320 billion by 2026, according to the chart. And this category is set to remain the top seller. The second-biggest category is far behind. That's immunosuppressants, with projected sales of $77 billion.
Image source: Statista.
All of this points to increasing revenue for both Bristol Myers Squibb and Merck. First, their already best-selling oncology drugs are expected to gain. And second, the outlook for growth in oncology drugs in general means demand isn't going away. Bristol Myers Squibb and Merck can benefit through sales of their existing oncology drugs and possibly new ones. Bristol Myers Squibb has more than 20 new candidates in its oncology pipeline -- and it's also studying its current drugs in additional oncology indications. Merck has more than 60 oncology candidates in the pipeline.
What does this mean for investors? Now may be a good time to take a second look at these pharmaceutical companies that have what it takes to bring in blockbuster revenue throughout this decade.
