Pharmaceutical Industry Faces Major Challenge with Expiration of Patents for Blockbuster Drugs

Unique Points

• Johnson & Johnson (NYSE: JNJ) is facing a looming threat that will put tens of billions of dollars in sales at risk between now and 2030, as blockbuster drugs will tumble off a so-called patent cliff. This refers to when a company's patents for one or more leading branded products expire, which opens the door for competitors to sell copycats of those drugs, often at a lower price.
• Certain drugmakers appear well prepared to offset some losses from upcoming patent cliffs, as they build their drug pipelines and ink acquisitions or partnerships with other companies. Patent cliffs are an unavoidable issue for pharmaceutical companies.
• The loss of exclusive rights on a drug can affect companies differently, depending on how much of their sales they get from the product or what type of treatment it is. Some drugs facing patent expirations will also be subject to the Biden administration's Medicare drug price negotiations, a policy that may further threaten the companies' revenues.
• The top 20 biopharma companies have $180 billion in sales at risk from patent expirations between now and 2028, according to estimates from EY. This includes drugs such as Merck's Keytruda which is an immunotherapy that treats melanoma, head and neck, lung and other certain types of cancers with $20.94 billion in sales.
• Some top drugs set to lose exclusivity include Johnson & Johnson's Remicade which is a monoclonal antibody used for the treatment of rheumatoid arthritis, inflammatory bowel disease and other conditions with $16.7 billion in sales.

Accuracy

No Contradictions at Time Of Publication

Deception (30%)

• The article states that patent cliffs are an unavoidable issue for pharmaceutical companies and they must replenish older top-selling drugs with new ones. However, this statement is not entirely accurate as some companies may choose to focus on other areas of research or development instead of creating new drugs.
• The article states that the loss of exclusive rights on a drug can affect companies differently depending on how much of their sales they get from the product or what type of treatment it is. However, this statement is not entirely accurate as some companies may choose to focus on other areas where they have more expertise or resources.

Fallacies (75%)

Bias (85%)

• Some top drugs set to lose exclusivity
• The loss of exclusive rights on a drug can affect companies differently

Site Conflicts Of Interest (50%)

Author Conflicts Of Interest (50%)

Unique Points

• The industry has a challenge of $350 billion over the next couple of years between '23 and '24 to replace the loss of exclusivity that's coming from losing patents on some lead biologics products.
• Some top drugs set to lose exclusivity include Johnson & Johnson's Remicade which is a monoclonal antibody used for the treatment of rheumatoid arthritis, inflammatory bowel disease and other conditions with $16.7 billion in sales.

Accuracy

• Certain drugmakers appear well prepared to offset some losses from upcoming patent cliffs, as they build their drug pipelines and ink acquisitions or partnerships with other companies. Patent cliffs are an unavoidable issue for pharmaceutical companies.
• The loss of exclusive rights on a drug can affect companies differently, depending on how much of their sales they get from the product or what type of treatment it is. Some drugs facing patent expirations will also be subject to the Biden administration's Medicare drug price negotiations, a policy that may further threaten the companies' revenues.
• The top 20 biopharma companies have $180 billion in sales at risk from patent expirations between now and 2028, according to estimates from EY. This includes drugs such as Merck's Keytruda which is an immunotherapy that treats melanoma, head and neck, lung and other certain types of cancers with $20.94 billion in sales.
• Some top drugs set to lose exclusivity include Johnson & Johnson's Remicade which is a monoclonal antibody used for the treatment of rheumatoid arthritis, inflammatory bowel disease and other conditions with $16.7 billion in sales.

Deception (100%)

None Found At Time Of Publication

Fallacies (85%)

• The author uses an appeal to authority when they mention that EY is a reputable source for information on mergers and acquisitions in the healthcare sector. They state:

Bias (100%)

None Found At Time Of Publication

Site Conflicts Of Interest (50%)

Author Conflicts Of Interest (50%)

• Julie Hyman, an analyst at Ernst & Young, discusses how mergers and acquisitions are becoming more common in the healthcare sector as pharmaceutical companies look for ways to replace lost exclusivity on lead biologics products. She mentions that big pharma is king of the hill in M&A deals.
• Julie Hyman talks about Arda Ural, a former executive at Pfizer who was involved in several M&A deals with big pharma companies.

Unique Points

• In 2023, total pharmaceuticals and life sciences deal value increased by approximately 50% compared to 2022.
• The last quarter of the year ended with a surge of deal activity in the biopharma space.
• Big pharma dominated life sciences M&A, with more than two-thirds (69%) of investment coming from big pharma, compared to just 38% in 2022.
• Amgen's acquisition of Horizon Therapeutics and Pfizer's acquisition of Seagen were able to withstand FTC scrutiny and successfully close in October and December, respectively.
• More than half of all life sciences M&A activity in 2023 was for private and small-cap biopharma sellers.
• Complex and novel transaction structures for the sector also were a prominent result of the market and regulatory environment, with reverse mergers remaining a fixture.

Accuracy

• Big pharma dominated life sciences M&A in 2023 with more than two-thirds of investment coming from big pharma.
• Amgen's acquisition of Horizon Therapeutics and Pfizer's acquisition of Seagen were able to withstand FTC scrutiny and successfully close in October and December, respectively.

Deception (50%)

• The article is deceptive because it uses a biased and one-sided reporting style that favors the perspective of large pharma companies over smaller ones. The author does not mention any factors that may affect the performance or outlook of private and small-cap biopharma sellers, such as regulatory hurdles, pricing pressures, competitive threats, or funding challenges.
• The article is deceptive because it uses emotional manipulation and selective reporting to highlight the big-ticket acquisitions by large pharma companies, while ignoring the smaller deals that were more prevalent and faster-growing. The author does not provide any context or comparison for the increase in deal value (50% compared to 2022), which could be due to other factors such as inflation, market volatility, or changes in valuations.
• The article is deceptive because it does not disclose or quote any sources for its claims about deal activity, valuations, or transaction structures. The author relies on vague terms such as 'surges', 'cautious optimism', and 'potent mix' to create a positive impression of the life sciences M&A market without providing any evidence or data to support it.
• The article is deceptive because it implies that the antitrust environment has improved and does not mention any challenges or risks that may still exist for M&A activity in the life sciences sector. The author cites two examples of acquisitions that were able to withstand FTC scrutiny, but does not provide any information on how many other deals were blocked, delayed, or modified due to antitrust concerns.

Fallacies (75%)

• AbbVie's acquisition of ImmunoGen for $10.1 billion and Cerevel Therapeutics for $8.7 billion; Bristol Myer Squibb's acquisition of RayzeBio for $4.1 billion, Mirati for $5.8 billion, and Karina for $14 billion; AstraZeneca's acquisition of Gracell Biotechnologies for up to $1.2 billion and Icosavax for up to $1.1 billion; Roche's acquisition of Carmot Therapeutics for up to $3.1 billion and Telavant for $7.1 billion
• Amgen's acquisition of Horizon Therapeutics and Pfizer's acquisition of Seagen were able to withstand FTC scrutiny

Bias (85%)

• AbbVie announced multiple big-ticket acquisitions in Q4 including ImmunoGen for $10.1 billion and Cerevel Therapeutics for $8.7 billion
• AstraZeneca made two acquisitions in Q4 worth up to $1.6 billion combined.
• Bristol Myers Squibb acquired RayzeBio, Mirati, and Karina in the fourth quarter with deal values of up to $23.9 billion combined.

Site Conflicts Of Interest (50%)

• $1.2 billion
• AstraZeneca
• Gracell Biotechnologies

Author Conflicts Of Interest (0%)

None Found At Time Of Publication

Unique Points

• Abilify Maintaina from Otsuka Pharmaceutical is a long-acting injectable antipsychotic gaining popularity for treating schizophrenia. It will get off-patent by October 2024.
• Xarelto, developed by Janssen Pharms, is set to lose its patent in August 2024. Xarelto (rivaroxaban) is an oral direct factor Xa inhibitor used for reducing the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation.
• Farxiga, developed by AstraZeneca, is a top drug in the anti-diabetic market. It will lose its patent in May 2024. Farxiga (dapagliflozin) is an oral SGLT2 inhibitor used for improving glycemic control in adults with type 2 diabetes.
• Ozempic, developed by Novo Nordisk, is a blockbuster drug for treating type 2 diabetes patients. It will lose its patent in May 2024.
• Lynparza from AstraZeneca is an oral PARP inhibitor used for treating certain types of advanced ovarian, breast, and prostate cancers caused by BRCA gene mutations. It will lose its patent in 2024.
• Symbicort developed by AstraZeneca is a crucial player in the segment of respiratory diseases like asthma and COPD representing a significant market for pharmaceutical companies. It will lose its patent in November 2024.
• Entresto, developed by Novartis, is an oral combination drug used for reducing the risk of cardiovascular death and hospitalization in patients with chronic heart failure. It will lose its patent in May 2024.
• Latuda from Sunovion Pharmaceuticals is a crucial player in the antipsychotic segment. It will lose its patent in February 2024.
• Xifaxan from Salix Pharmaceuticals is an oral antibiotic approved for treating IBS-D (diarrhea predominant) and hepatic encephalopathy. It will lose its patent in June 2024.
• Cabometyx, a blockbuster drug from Exelixis, is approved for treating advanced renal cell carcinoma both as a first-line treatment and after prior antiangiogenic therapy. It will lose its September 2024.

Accuracy

No Contradictions at Time Of Publication

Deception (100%)

None Found At Time Of Publication

Fallacies (85%)

• The article contains several examples of informal fallacies.

Bias (100%)

None Found At Time Of Publication

Site Conflicts Of Interest (100%)

None Found At Time Of Publication

Author Conflicts Of Interest (0%)

None Found At Time Of Publication