3 main trends that will affect Pharma in 2023

1. Pharmaceutical fundamentals are strong, but recovery can take time

Like other industries, the pharmaceutical industry faced financial frustrations and diminishing returns in 2022.

The continuing effects of the COVID-19 pandemic, as well as continued pressure from the Russian invasion of Ukraine, weighed on progress in the broader stock market and dampened the performance of the pharmaceutical sector.

It’s clear that investors haven’t had much to celebrate lately. How likely is that to change in 2023?

Encouragingly, experts continue to point to the strength of the pharmaceutical industry. “We cannot lose sight of, especially in the life sciences sector, the fact that the fundamentals of the industry are very strong. It will only be a matter of time before things get back to normal,” Subin Baral, EY Global Life Science Deals Leader, said Pharmaceutical Technology.

Raj Lala, president and chief executive officer of Evolve Funds, told Investing News Network that Big Pharma generated significant revenue lines in 2022 thanks to vaccine production as the world continued to grapple with COVID-19.

“Some health care companies were delayed because surgeries and non-emergency procedures were delayed,” Lala said. “With the pandemic slowly leaving behind, the rescheduling of some of these elective procedures has helped the sector.”

In 2023, pharmaceutical stocks will also be affected by US politics. Given the division in Congress after last year’s midterm elections, it will be essential that investors follow discussions on how pharmaceutical stocks may be affected by the Inflation Reduction Act.

“The consequences of the (Reducing Inflation Act) remain difficult to predict, and uncovering its long-term implications will be a big focus in 2023,” says a report published by Evaluate Vantage.

So far in 2023, early return show names in the struggling pharmaceutical sector, at least for now.

2. Pharma M&A looks strong in 2023

According to PwC researchersM&As in the pharmaceutical space and other life sciences subsectors are expected to reach a collective value of US$225 billion to US$275 billion by 2023.

“Ample corporate cash, the need to continue investing to address portfolio gaps over the medium term and a reset in biotech valuations will provide the backdrop for a busy year,” said Roel van den Akker, science deals leader. biologics and pharmaceuticals of the firm.

This activity will come after uncertainty reigned in the sector in 2022, causing pharmaceutical deals to fall during the year.

This year, individual transactions are expected to be in the range of US$5 billion to US$15 billion.

However, PwC is also projecting one or two US$20 billion to US$40 billion deals “in the second half of 2023 as companies become more comfortable with the Federal Trade Commission’s (US) stance. UU.) in a divided period of government for the next few years.”

3. Drugs set to move the needle in 2023

According to Evaluate Vantage, investors should expect vaccines and monoclonal antibodies to lead revenue generation in 2023 in the pharmaceutical market. The following drugs are expected to be the best sellers of the year:

• Merck’s (NYSE:MRK) Keytruda at nearly $25 billion.
• Comirnaty from Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) at almost $20 billion.
• Abbvie’s (NYSE:ABBV) and Eisai’s (OTC Pink:ESALF,TSE:4523) Humira at almost $15 billion.

COVID-19 vaccines, like Comirnaty, will continue to be some of the biggest money-makers on the market, but there will still be uncertainty about how the virus may change.

“A lot still depends on what the virus does in the coming months or years, in terms of rendering existing treatments ineffective,” Evaluate Vantage states in its report.

investor takeaway

The pharmaceutical world offers investors a wide set of opportunities, with options for those who want to take risks or make safer bets. In 2023, investors will need to be vigilant and keep an eye on how external forces affect market health and sentiment.