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Who doesn’t love a crystal ball? Predicting the future–particularly when it comes to Big Pharma’s prospects for growth and earnings–is a favorite pastime among industry-watchers. Even better when the predictions come from analysts who’ve dug deeply into company numbers and documents.

Bernstein’s Tim Anderson and his team did just that, and their conclusions are part of a new research report to investors. According to their analysis, which looks at 9 big-name drugmakers as of 2025, biosimilars and regular old generics will continue to cut into pharma sales, but if pipeline drugs come through, drugmakers could see accelerated growth down the line.

By these lights, no company holds as much promise as Bristol-Myers Squibb, which stands at the top of Bernstein’s rankings for revenue and earnings growth. Even without sales from most pipeline meds, Bristol-Myers is set for a 4% compound annual growth rate through 2025, and with those prospective drugs on tap, 6.5% growth. Earnings? That’s a 13.4% CAGR over the decade.

Sanofi stands in second place for growth in its current lineup of drugs–1.3%–but with pipeline meds included, it drops to fourth place with a 3.7% CAGR, behind Novartis (3.9%). GlaxoSmithKline, in third place with its present drug stable (0.5% growth), drops to fifth with pipeline meds (3.6%).

Eli Lilly, on the other hand, takes an upward step or three when its R&D prospects are part of the equation. The company has a 4.6% calculated growth rate under those conditions–in second place behind BMS–up from virtual stagnation (-0.4%, fourth place) with its current meds. Earnings-wise, Lilly looks good, too, with a 9.9% CAGR over the period, just behind Bristol-Myers and ahead of AstraZeneca (7%).

One big caveat, however, as Anderson points out: The numbers don’t include the $160 billion Pfizer-Allergan merger, set to close this year. When those two companies combine, the new Pfizer is likely to move up the rankings. Right now, it’s in fifth place for growth under current conditions; eighth out of nine including pipeline meds; and fifth for earnings.

Among the most dramatic illustrations of Big Pharma’s fortunes for the next 10 years? Bristol-Myers’ sales growth–without most pipeline drugs–modeled through 2020, and Roche’s sales decline from 2020 to 2025 under the same definition. BMS looks particularly good because of expected growth in sales of the anticoagulant it shares with Pfizer, Eliquis, plus immuno-oncology meds–and its comparatively small revenue to start with.

Roche, on the other hand, is expected to suffer from “steady and prolonged erosion” in its top-selling meds because of biosimilar competition. Knockoff versions of Rituxan, Perception and Avastin start to slow sales down in 2018 and drag growth into negative territory in 2020. With its R&D prospects included, Roche’s fortunes look a lot better, of course, with a 3.2% CAGR.

Of course, long-term predictions are just that, and Bernstein acknowledges that much can change in the years to come. There have been several instances where drug company fortunes can turn. “As an example, per our 2011 analysis, Eli Lilly’s long-term relative EPS growth ranked [ninth out of 9], yet it now sits at #2 … ,” the report states. “This suggests it is distinctly possible for companies who look comparatively weak in this analysis through 2025–such as Merck and Roche–to do much better than we are forecasting,” particularly if their pipelines really pay off.

By Tracy Staton

Source: Fierce Pharma