KUALA LUMPUR – The pharmaceutical industry’s aggregate annual earnings before interest, taxes, depreciation, and amortisation is expected to grow by between 4.0% and 6.0% over the next 12 to 18 months.
The growth is supported by rising pharmaceutical use and Covid-19-related treatments and vaccines, said Moody’s Investors Service (Moody’s) in a note today.
The ratings agency said some of these products, including Covid-19 vaccines like Pfizer, AstraZeneca and Johnson & Johnson, are set to drive significant profit growth, noting that the profit contribution for Pfizer is substantial, recently guiding to US$26 billion (RM106.97 billion) of global revenue in 2021.
“This estimate is consistent with our December 2020 forecast of 4.0%-6.0% when we changed the industry outlook to ‘positive’ from ‘stable’, and higher than our October 2020 forecast of 2.0%-4.0%.
“Our forecast spans the rated pharmaceutical universe – a diverse group of companies operating in numerous geographic regions and offering products ranging from complicated and expensive biotech drugs to commodity-like generics,” said Moody’s.
Notwithstanding some ongoing softness related to the coronavirus, it said pharmaceutical spending would continue to rise globally, across almost all regions.
According to the IQVIA Institute, global prescription drug spending will rise at a 3.0%-6.0% compound annual growth rate through 2025 and exceed US$1.6 trillion in 2025, excluding spending on coronavirus vaccines.
“The oncology market will remain strong because of an ongoing cycle of innovation, marked by recent drug approvals and expanding indications for existing drugs,” said Moody’s.
It noted that many products that treat autoimmune disorders would also see strong growth.
“Such treatments span a wide category of diseases including rheumatoid arthritis, plaque psoriasis, atopic dermatitis, Crohn’s disease and ulcerative colitis,” it added. – Bernama, June 14, 2021
