Eli Lilly, Novo Nordisk Lead Revenue Boom in the ‘Always Tricky’ Q4
Overview of Recent Trends in Biopharma Revenues
The fourth quarter of 2024 has turned out to be remarkably lucrative for the biopharmaceutical industry, reflecting a notable trend that has been observed throughout the year. Among the 22 major global biopharma companies that reported quarterly revenues exceeding $2 billion by February 24, only one—Teva Pharmaceuticals—posted a year-over-year revenue decline of 5%. It’s important to note that Teva’s revenue drop resulted from a $500 million upfront payment from a collaboration with Sanofi, indicating a strong underlying performance when accounting for this anomaly.
Pankit Bhalodia, Managing Director of healthcare and life sciences at West Monroe, mentioned in an interview that Q4 is traditionally a complex period. He remarked, “I don’t know how much of this is in anticipation of all the changes that might potentially happen in ’25 with the new [Trump] administration, with increased demand or whatnot.”
Revenue Leaders: Eli Lilly and Novo Nordisk
Leading the charge in revenue growth for Q4 were **Eli Lilly** and **Novo Nordisk**, with significant year-over-year increases of 45% and 30%, respectively. For Eli Lilly, this represents its **highest quarterly increase** in 2024, marking a continuous streak of seven consecutive quarters with at least a 20% revenue increase. Similarly, Novo Nordisk has maintained a streak of twelve consecutive quarters above the same threshold.
Both companies owe their success largely to their diabetes and obesity drug portfolios. Eli Lilly’s annual revenue for 2024 soared 32%, while Novo Nordisk’s revenue increased by 26%. Notably, Lilly’s revenue growth was not solely driven by its GLP-1/GIP products. Non-incretin drugs also contributed, with sales rising by 20% year-over-year, particularly highlighted by blockbuster products like **Verzenio** for breast cancer and **Jardiance** for heart failure, which generated $1.6 billion and $1.2 billion in quarterly revenue, respectively.
Investors have shown increased enthusiasm for Lilly’s pipeline, especially regarding obesity treatments, with CEO David Ricks affirming that the company has not reached the “edge of the demand curve” for these drugs. This optimism translated into a substantial market capitalization increase for Lilly—from $745 billion to $844 billion following a projection of 32% revenue growth for 2025.
Novo Nordisk, while projecting a slight decrease in sales momentum for 2025, expects revenue growth between 16% and 24%. The company’s market capitalization has slightly increased, remaining at around $349 billion, asserting its position as the highest valued biopharma company in Europe.
Other Notable Performance: AstraZeneca and Pfizer
The period also saw significant achievements from other biopharma companies. **AstraZeneca** reported a remarkable 24% revenue increase, driven by notable growth in oncology and respiratory treatments, concluding a stellar year with an 18% total sales uptick. However, expectations for 2025 are more conservative, with AstraZeneca anticipating only high-single digit growth.
**Pfizer**, which had a roller-coaster 2024, rebounded impressively, ending the fourth quarter with a 23% revenue increase after beginning the year with a 19% decline. This resurgence is attributed to the acquisition of **Seagen** and a robust performance from COVID-19 products such as **Comirnaty** and **Paxlovid**, which together generated $4.1 billion in Q4.
**Vertex** and **Novartis** also posted impressive results, each achieving a 15% revenue increase—their highest quarterly performance of the year. Novartis’s focus on becoming a **pure-play innovator** has unlocked new value, as affirmed by CEO Vas Narasimhan.
Single-Digit Growth Achieved
While some companies saw encouraging sales gains, there were also several with modest, yet positive performances. **AbbVie** achieved a 6% increase in revenue marking its highest quarterly growth since 2021. The company is moving past the loss of exclusivity of **Humira**, aiming for a projected total of $31 billion from next-gen immunology drugs by 2027.
Gilead Sciences continued its upward trajectory with a 6% revenue increase, primarily driven by HIV products. Johnson & Johnson reported a modest 5% gain, facilitated by ongoing improvements in their sales performance throughout 2024 as they adjusted post-spinoff from their consumer health business.
Challenges and Disappointments
Despite the successes, not all reported figures were optimistic. **GSK** only achieved a 1% revenue increase, primarily attributed to a decline in sales for its RSV vaccine **Arexvy**. Similarly, companies like **Merck**, reliant on vaccine production, may face headwinds in light of increased regulatory uncertainties ahead of a leadership change in the Department of Health and Human Services.
Shares of various biopharmaceutical stocks may also come under scrutiny as a shift in the political landscape raises questions regarding regulatory pathways and product approvals. Investors are keeping a close watch on these developments.
Looking Ahead
As we start 2025, the biopharmaceutical landscape is increasingly competitive and dynamic. Companies like Eli Lilly and Novo Nordisk appear poised for continued growth, capitalizing on their innovative drug pipelines and burgeoning markets. Meanwhile, industry participants must navigate regulatory changes and market conditions that could significantly impact future sales. Monitoring these trends will be vital for investors seeking to identify opportunities and risks in the pharma sector.
The consensus remains that a lot can change in an industry known for its volatility. As always, stakeholders should stay informed and agile in their strategy to leverage the ongoing revenue boom in biopharma.
