Biotech has long been the little sibling of big pharmaceutical companies. And even the very biggest biotech companies' annual revenue has totaled much less than that of their pharma rivals. For instance, biotech Amgen's annual revenue has hovered around $22 billion in recent years. While Merck's revenue has been closer to $40 billion.
But that may not be the case forever. Biotech companies are bringing more and more products through late-stage clinical trials. Some biotech's -- like Moderna (MRNA -3.19%) -- have put the idea of biotech on the map with blockbuster products. I'm thinking of Moderna's coronavirus vaccine. Big pharma's like Pfizer (PFE -2.29%) have partnered with biotech companies to drive growth. I'm thinking of Pfizer's partnership with BioNTech for their blockbuster coronavirus vaccine. And the following charts show two amazing clues that biotech revenue soon may rival that of big pharma.
Pharma versus biotech
The first clue has to do with revenue according to technology. The following chart separates revenue into conventional pharmaceutical technology, biotech, and unclassified sales. We'll look at pharma and biotech. Back in 2012, pharmaceutical technology represented $443 billion in revenue while biotech only represented $149 billion in revenue. Biotech revenue has more than doubled from that level to $312 billion last year. Pharma revenue has only increased 14% in that period.
Now what about forecasts? Biotech is growing faster here too -- and is getting very close to pharma revenue. The chart shows biotech revenue gaining 62% from 2021 to a 2026 revenue forecast of $505 billion. At the same time, pharma revenue is forecast to grow 35%.
Let's look at a second chart, below. This one shows mean marketing budgets of U.S. healthcare companies by type. We'll look at pharmaceuticals and biotech. Marketing budgets of pharma companies actually declined significantly from 2019 through 2020 and 2021. We could say the pandemic weighed on that sort of spending. But, at the same time, biotech companies managed to increase their marketing budgets, the chart shows.
The progress of biotech
This is important because it shows the progress of biotech companies from clinical stage to commercial stage. As more and more of them reach the stage of actually selling products, they need to market those products. And that's where the marketing budget comes in.
Together, these charts show that biotech is no longer a technology that's primarily in the research stages. Biotech companies are behind some of the world's biggest products. Earlier, I mentioned the two most-used coronavirus vaccines in the U.S. Those of Pfizer and Moderna. Both are biotech products.
What does this mean for investors? Biotech investing today is still about pipeline growth and promise on the horizon. But in many cases, it's also about blockbuster revenue -- that soon may catch up with pharma rivals.