Medical marijuana is being hailed as a potential blockbuster class of therapies that could have a significant impact on big disease indications including cancer, schizophrenia, and even diabetes. That could make it a big seller, and the Marijuana Business Daily is estimating that it could bring in as much as $4 billion yearly in the U.S. by 2018. However, medical marijuana's potential may not be realized for years and that means a lot of risk surrounds it. With that in mind, we reached out to three of our top healthcare analysts and asked them to tell us what drugs they think could leave medical marijuana in the dust. Read on to learn what they said.
George Budwell: Legal cannabis might be the fastest growing industry these days, but Gilead Sciences' (NASDAQ:GILD) newly approved hepatitis C therapy, Harvoni, should handily crush this burgeoning industry in terms of revenue for years to come.
Harvoni is a fixed-dosed combination pill, composed of Sovaldi and ledipasvir that does not require the use of either interferon or ribavirin.
The FDA approved the drug last week for use in patients with genotype 1 infections, the most common form of the disease.
This game-changing hepatitis C therapy is expected to generate record-breaking revenue numbers from the get-go. Harvoni's precursor, in many ways, was an off-label combo of Sovaldi and Johnson & Johnson's (NYSE:JNJ) Olysio. All told, these two drugs hauled in nearly $7 billion during the first half of this year alone. With Harvoni likely displacing Olysio and Sovaldi in most cases, it could potentially rake in around $12 billion in its first full year on the market -- roughly three times the projected value of the entire marijuana industry by 2018. Even when factoring in the negative impacts of competition, shortened treatment durations, and the need for additional approvals, Harvoni should still double the marijuana industry's 2018 revenue forecast by this time next year.
Todd Campbell: George is right, Sovaldi has monster drug potential, but I also think that Biogen's (NASDAQ:BIIB) Tecfidera will be a big-time winner. Tecfidera was the third oral treatment designed to reduce relapsing multiple sclerosis that was approved by the FDA, yet it's already become the market share leader in the United States.
Since winning the FDA's go-ahead last year, Tecfidera sales have jumped from $192 million in Q2, 2013, to $506 million in Q1, 2014, to $700 million in Q2, 2014. Biogen will shed light on Q3 results next week, but with the drug launching in additional European markets it's possible that Tecfidera's annualized run rate will come in north of $3 billion. That gives it a very good shot at eclipsing Marijuana Business Daily's $4 billion medical marijuana sales target for 2018; particularly, if Tecfidera can win away additional sales from its two oral competitors, Novartis' (NYSE:NVS) Gilenya and Sanofi's (NYSE:SNY) Aubagio. Based on second quarter results, sales for those two compounds were tracking at about an annualized $2.4 billion and $480 million, respectively.
Brian Orelli: George's and Todd's picks are both good, and they'll likely hit $4 billion before mine. But that's because my pick isn't even approved in the U.S. yet. Bristol-Myers Squibb's (NYSE:BMY) Opdivo is currently under FDA review and should be approved before March 30, 2015. European regulators shouldn't be too far behind.
Even then Opdivo is going to get off to a slow start since it'll only be approved in the U.S. for melanoma patients for whom other treatments have failed. To get to $4 billion in annual sales and beat sales of marijuana, Bristol-Myers Squibb will have to get Opdivo approved for other types of tumors, especially as a first-line therapy.
Opdivo and Merck's (NYSE:MRK) competing drug Keytruda works by blocking the PD-1 pathway that tells the immune system that a cell is part of the body, preventing it from attacking the cancer cell. Because of their novel mechanism of action, PD-1 drugs can be combined with other targeted therapies, which should make them easier to get approved as first-line therapies. They don't have to try and beat the current first-line therapies; the combination just needs to prolong survival longer than the current treatment by itself.
Competing with Keytruda will make it harder for Opdivo to become a mega blockbuster, but the drugs appear to work in a wide variety of tumors, so there's plenty of room for both drugs in the market.
Todd owns shares of Gilead Sciences. George owns Johnson & Johnson. Brian has no positions in the companies mentioned. The Motley Fool recommends Gilead Sciences and Johnson & Johnson. The Motley Fool owns shares of Gilead Sciences and Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.