Bio/Pharma companies’ Q4 2020 market performance impacted by development of treatments or vaccines for COVID-19

The market performance of the top 20 Bio/Pharma companies is still being impacted by the COVID-19 pandemic, either positively for companies developing a vaccine for the disease or negatively for those working on a treatment, says GlobalData, a leading data and analytics company.

Madeleine Roche, MSc, Analyst at GlobalData comments: “Drug sales for Q4 2020 heavily influenced company performance, with COVID-19 vaccines driving market cap growth, but COVID-19 therapeutics possibly causing a decline. The top 10 companies (Johnson & Johnson, F. Hoffmann-La Roche, Novartis, Merck & Co, Pfizer, AbbVie, Eli Lilly and Co, Bristol-Myers Squibb, Amgen and AstraZeneca) experienced the most growth, with the top five companies (Johnson & Johnson, F. Hoffmann-La Roche, Novartis, Merck & Co, Pfizer) maintaining their ranking from Q3 2020.”

As more vaccines continue to be approved and distributed globally throughout 2021, companies that focused on COVID-19 treatments will likely see a significant market cap drop, and the market cap growth of companies with COVID-19 vaccines will continue.

Out of all of the Bio/Pharma companies that reported a market cap decline over Q4 2020, Regeneron Pharmaceuticals saw the most significant decrease of 13.4%. The FDA granted an Emergency Use Authorization (EUA) for Regeneron’s monoclonal antibody cocktail casirivimab + imdevimab for the treatment of mild-to-moderate COVID-19 in November 2020. Despite this positive milestone, the acute need for COVID-19 treatments reduced significantly after the surge of vaccine development and EUAs for vaccines in Q4 2020.

Roche continues: “With an increase in the number of COVID-19 vaccines being developed and approved, as well as the use of generic drugs to treat COVID-19, the size of the COVID-19 therapeutic market is rapidly decreasing.”

Gilead Sciences also reported a decrease in market cap of 7.8% over Q4 and an 18% decrease over Q3, in result of COVID-19 vaccines receiving EUAs, meaning both the current sales and future need for COVID-19 therapeutics like Gilead’s remdesivir decreased significantly.

Roche adds: “AbbVie, Eli Lilly, and Daiichi Sankyo all reported more than 10% market cap growth compared with Q3.”

Eli Lilly’s 14.1% market cap growth can be attributed to strong drug revenues, especially for its diabetes drug Trulicity (dulaglutide) and its COVID-19 monoclonal antibody bamlanivimab, which was granted an EUA in November 2020. The subsequent announcement of 650,000 doses ordered by the US in early December 2020 boosted its stock.

Roche concludes: “It is probable that the demand for bamlanivimab and other therapeutic antibodies is only short-term due to decreased demand for COVID-19 therapeutics, caused by an increase in COVID-19 vaccinations and the success in using generic anti-inflammatory drugs to treat COVID-19.”

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