Hengrui Breaks Into Top 10, BeiGene Slips, Vertex Emerges as Dark Horse, J&J Overtakes AZ in 2024 Global Pharma Innovation & Invention Index Shake-up

May 18, 2024 18:39 CST Updated 18:39

IDEA Pharma

Life Science Strategy Service Provider

Hengrui Pharma

Innovative and High-Quality Pharmaceutical Developer

BeOne

Developer of Molecular Targeted and Immune Anti-Tumor Drugs

Johnson & Johnson

Medical Device R&D and Manufacturer

On May 4, IDEA Pharma released the 2024 edition of the Innovation and Invention Index list. The biggest change is that Hengrui Pharma has newly entered the list and advanced into the top ten of the Invention Index, indicating that China's "leading pharmaceutical company" innovation capabilities have gained dual recognition in both quantity and quality. However, with the global pharmaceutical industry in flux, previous list-toppers such as Pfizer, AstraZeneca (AZ), Johnson & Johnson, and Roche have all seen their rankings drop, while newcomers like Novo Nordisk, argenx, and Vertex are becoming the new protagonists representing global innovation standards.

Writing | Erin Qsher

Editor |Kathy

Surprise!

Hengrui Pharma Breaks into IDEA Pharma's Annual Innovation and Invention Index List for the First Time, Securing a Top Ten Spot in the Invention Index List that Represents Pharmaceutical R&D Standards; in the Innovation Index List that Reflects Product Value, Hengrui Also Ranked 11th.

In these two lists, Hengrui Pharma and BeOne Medicines are the only two Chinese pharmaceutical companies included.However, BeOne Medicines regretfully dropped out of the top ten this year, ranking only 16th in the Innovation Index and 13th in the Invention Index.

In terms of foreign pharmaceutical companies, both Pfizer and AstraZeneca (AZ) have fallen from their top positions, while Novo Nordisk and Johnson & Johnson have risen to the top spots on the Innovation and Invention Index. argenx and Vertex, two rising stars with explosive product growth in recent years, climbed to a tie for 11th place on the Innovation Index, with jumps of 15 and 10 places respectively. Moderna and BioNTech, despite the slowdown of their COVID-19 products, still demonstrated strong R&D capabilities, securing 5th and 12th places respectively on the Invention Index with double-digit growth surpassing many established pharmaceutical companies.

However, behind the changes in the rankings is also the evolution of the global pharmaceutical ecosystem. Like Gilead and Amgen more than a decade ago, technology-driven biopharmas such as argenx, Moderna, Vertex, and Alnylam are on the rise. In another "Freshness Index" list evaluated by IDEA Pharma,(Compare the proportion of new product revenue over the past 3 years and 5 years to measure the pharmaceutical company's ability to "renew" its product portfolio.)In China, these Biopharma companies rank at the top, while established MNCs such as Roche, Pfizer, and Novartis have been "pushed" to mid-level positions.This suggests that the sales growth of new products born from Biopharma is even more impressive.

What is the essential difference between the two lists named Innovation and Invention Index? Perhaps this sentence can provide the answer:Innovation is about creating value from invention, not the invention itself.

Therefore, it can be seen that IDEA Pharma has adopted completely different metrics to rank the two lists. The former mainly focuses on the value created by innovative products, while the latter emphasizes the quantity and scale of R&D.

Note: The innovation index indicators include the quantity and sales share of new products launched in the past 3-5 years; revenue growth and R&D investment share over the past five years; as well as organizational restructuring, M&A events, and financing and investment activities.

The invention index indicators include the ratio of drugs under research to marketed drugs, the number of new drug clinical trials, R&D investment, the number of patents, and the scale of newly added pipelines.

Chinese Pharma: Hengrui Makes Debut on List; BeOne Drops Out of Top Ten

This year marks the thirteenth consecutive year that IDEA Pharma has released its Innovation and Invention Index rankings. Hengrui Pharma has entered these two lists for the first time, securing the 11th spot in the Innovation Index and the 10th in the Invention Index. This achievement reflects the company-wide dedication to innovative R&D over the past two years, signifying dual recognition for both quantity and quality.

2023 and 2024 seem to be a milestone phase for Hengrui Pharma, China's "leading pharmaceutical company." From past doubts about its innovation capabilities as merely Fast-follow, to now letting its strength speak, in 2023 the revenue from innovative drugs reached 10.637 billion yuan, achieving a year-on-year growth of 22.1%.In 2023, Hengrui Pharma's cumulative R&D investment reached 6.15 billion yuan.

According to the "2024 Pharmaceutical R&D Annual Review" released by the internationally renowned consulting firm Citeline, in 2023, Hengrui Pharma's R&D pipeline increased by 38.7% to reach 147 projects, ranking 8th globally. Approximately 94% of these projects are self-developed, and if measured by this criterion, Hengrui Pharma would rank first globally.

In the "Freshness Index" list selected by IDEA Pharma, Hengrui Pharma ranked seventh. The percentage of its total revenue from drugs first approved between 2019 and 2023 is close to 30%, and the revenue share from drugs first approved between 2021 and 2023 reached 13%.Even surpassing three giants—Pfizer, AbbVie, and Novo Nordisk—in the top ten list.

It is worth mentioning that, as time enters 2024, Hengrui Pharma has achieved success in multiple popular fields. Just over a month ago, during the AACR conference, Hengrui Pharma showcased five ADC projects, four of which were disclosed for the first time, covering new mechanism ADCs such as TF, LIV-1, PSMA, and DLL3, with FIC/BIC potential.

This week, Hengrui Pharma's three self-developed GLP-1 class innovative drugs, HRS-7535, HRS9531, and HRS-4729, also completed License-out transactions, with upfront payments and milestone payments totaling up to $6 billion. Notably, the transaction also involved a 19.9% equity stake in the company Hercules, providing "insurance" for the future overseas progress of the products.

IDEA Pharma evaluates Hengrui Pharma as "This rising company is expected to make waves in the field of pharmaceutical innovation and invention."

However, as another Chinese pharmaceutical company that first advanced into the innovation and invention index rankings, BeOne Medicines seems to have reached a growth bottleneck. Moreover, in this year's two rankings, it was surpassed by the newly listed Hengrui Pharma in both.

Behind BeOne Medicines' weakness actually reflects its sluggishness in new products over the past three years, which is clearly evident from IDEA Pharma's "Freshness Index" list.

From 2019 to 2023, the percentage of total revenue from drugs first approved by BeOne Medicines exceeded 90%, yet from 2021 to 2023, the revenue share from drugs first approved during this period was less than 5%.

A review of the drugs approved for the first time by BeOne Medicines in the past five years shows that zanubrutinib and tislelizumab seem to have occupied the majority of attention.

Although BeOne Medicines enabled the industry to witness the first domestically produced billion-dollar molecule, zanubrutinib, which achieved sales of $1.29 billion in 2023, and tislelizumab also generated $537 million in sales, the performance of these two products subsequently showed a cliff-like decline. Moreover, between 2021 and 2023, only one self-developed product, pamiparib, was approved, with no other approvals following thereafter.

Relatively speaking, Hengrui Pharma's Class 1 new drugs have shown explosive growth in the past three years. Nearly 10 drugs have been approved, including the small molecule TPO-R agonist Hetrombopag Ethanolamine, CDK4/6 inhibitor Dalpiciclib Hydroxyethyl Sulfonate, SGLT-2 inhibitor Hengliptin Proline, AR inhibitor Rivoceranib, PD-L1 monoclonal antibody Adebrelimab, and PI3Kδ inhibitor Linperlisib, with an average of two new drug approvals per year. At the very least, they have achieved victory in terms of quantity.

However, when seeing the year-on-year growth of 14.90% and the staggering R&D expenses of 12.813 billion yuan presented in BeOne Medicines' 2023 annual report, the industry seems to recall the previous metaphor for BeOne Medicines as "the soaring giant Peng bird."

However, 2024 is also a test for BeOne Medicines. Tislelizumab received approval from the EU in the second half of 2023 and from the U.S. FDA at the beginning of 2024, marking a unique challenge for BeOne Medicines in the industry—As the industry is increasingly "sailing overseas by borrowing ships," BeOne Medicines' commercialization capabilities for solid tumors abroad remain to be verified.

In terms of subsequent innovation capabilities, BeOne Medicines also boasts extensive BD collaborations and a robust early-stage R&D pipeline with multiple FIC/BIC potential candidates, such as OX40 inhibitors, DGKζ inhibitors, and CCR8 monoclonal antibodies.

In summary, the two "top players" representing China's pharmaceutical strength and innovation capabilities both ranked high in overseas authoritative lists for innovation and invention indices in 2024. This already signifies an update in China's pharmaceutical agenda-setting, with both quality and quantity being verified.

Two Major Rankings Change Hands: Novo Nordisk Replaces Pfizer, Johnson & Johnson Replaces AZ

Following two consecutive years where Pfizer and AZ topped the Innovation Index and Invention Index respectively, both leaders have now been dethroned.

According to IDEA Pharma's global "2024 Pharmaceutical Innovation and Invention Index," Novo Nordisk has made a remarkable leap, climbing 18 positions to claim the top spot on the innovation index list. The former "giant" – Pfizer – now ranks third on the innovation index list.

Behind this change lies the stark contrast in performance. For Novo Nordisk, 2023 has become a landmark year of significant harvest as it celebrates its 100th anniversary. The strong support behind this success is the "robust performance in 2023," with revenue growing over 30% and net profit surging more than 50%.

Notably, the combined sales of Novo Nordisk's GLP-1类产品 reached $23.9 billion, accounting for 70% of the total revenue.Over the past year, thanks to the tremendous success of GLP-1 drugs in the diabetes and obesity markets, the once low-profile Novo Nordisk has almost become an overnight sensation, highly sought after by the capital market, with its market value steadily climbing.

On the contrary, Pfizer, which had topped the list for the previous two years, although it dropped two places on the Innovation Index ranking compared to two years ago when it was at the top, and also fell one place on the Invention Index ranking, it still maintains a leading position in the field of pharmaceutical innovation and invention. It ranks third on the Innovation Index and sixth on the Invention Index.

Looking back two years ago, the reason Pfizer climbed to the top of the innovation index was closely related to its outstanding performance during the COVID-19 pandemic and its plans for future new product development. At that time, Mike Rea, president of IDEA Pharma, described Pfizer as being "in the water when the wave came." Prior to the pandemic, Pfizer had already been collaborating with BioNTech in the mRNA field, enabling them to swiftly pivot towards developing a COVID-19 vaccine. This demonstrated an innovative, agile mindset and the ability to interact effectively with biotechnology—qualities underpinned by Pfizer's robust capabilities in clinical trials, manufacturing, commercialization, and distribution.

However, success and failure often go hand in hand. Pfizer's performance in 2023 showed significant fluctuations, with net profits declining by more than 90% year-on-year, mainly due to the decreased sales of its COVID-19 products, Comirnaty and Paxlovid. At the same time, Pfizer also cut its R&D expenditures.

Despite fluctuations in financial performance, Pfizer remains one of the giants in the field of pharmaceutical innovation and invention.After the COVID-19 bonus faded, finding new growth points became one of Pfizer's key strategies. Recently, Pfizer appointed Citi analyst Andrew Baum as Chief Strategy and Innovation Officer to manage portfolio strategy and business development. He will officially take office on June 3 and play an important role in advancing Pfizer’s long-term corporate strategy plan. His responsibilities will include portfolio analysis and prioritization, business development activities, strengthening partnerships with the biotech ecosystem, and conducting commercial evaluations of the R&D pipeline.

The Invention Index has also undergone a round of changes. Johnson & Johnson replaced AstraZeneca as the winner of the Invention Index.

Over the past year, Johnson & Johnson has also achieved significant success in drug approvals. Notably, in August 2023, Johnson & Johnson's novel drug TALVEY™ (talquetamab) received accelerated FDA approval for market release. It is primarily used to treat adult patients with relapsed or refractory multiple myeloma (RRMM) who have undergone at least four different prior therapies, including proteasome inhibitors, immunomodulatory agents, and CD38 antibodies, without achieving remission. This is a bispecific antibody with GPRC5D/CD3-targeting functionality.

By comparison, AstraZeneca dropped two places to rank third in the Invention Index. However, over the past year, AstraZeneca has also achieved significant regulatory milestones.Additionally, through strategic focus on collaborations and acquisitions, the prospect of further innovation and invention is demonstrated.For example, the acquisition of CinCor Pharma, Inc. strengthened its cardio-renal product pipeline, while the collaboration with Quell Therapeutics enabled the development of T-reg cell therapies for Type 1 diabetes and inflammatory bowel disease. AstraZeneca also partnered with Eternity Bioscience to obtain global rights to the novel oral GLP-1 receptor agonist ECC5004.

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Who's Up? Who's Down?

Even though the rankings fluctuate, the underlying significance has never changed. According to the innovation index, the rankings of argenx, Vertex, and Astellas have steadily risen, with emerging therapies and platform-based companies continuing to be favored by the list.

Argenx is a rising star in the field of innovation. As a newcomer last year, argenx climbed 15 positions in the new year's innovation index, tying for 11th place with Vertex and Hengrui Pharma.

Although argenx is still operating at a loss, its net profit has increased by 58.5%, with 32.7% of its revenue coming from drugs approved in the past three years.

The most noteworthy product is Vyvgart (efgartigimod alfa).Argenx is still focusing on expanding the coverage and options for Vyvgart, the first-in-class neonatal Fc receptor blocker used to treat generalized myasthenia gravis. Initially requiring infusion, a subcutaneous injection option was introduced after its launch, greatly enhancing its commercial appeal. Moreover, the company is planning to expedite FDA approval of Vyvgart for the treatment of chronic inflammatory demyelinating polyneuropathy and expand its indications to cover 15 autoimmune diseases.

While advancing its product pipeline, argenx has also invested in differentiated immunology assets. As part of its strategy, the company is further prioritizing the establishment of its innovative ecosystem through pioneering immunology initiatives.

Vertex achieved some encouraging progress in 2023, climbing 10 positions to rank 11th in the Innovation Index, while tying with Regeneron in the Invention Index, rising two spots to 8th place.The company's robust growth and focus on innovation are reflected in its approximately 40% increase in R&D expenditure and a pipeline investment portfolio ratio exceeding 200%.

A key driver of Vertex's growth is its blockbuster product——The sales of the cystic fibrosis combination therapy Trikafta (elexacaftor/tezacaftor/ivacaftor) increased by 16% compared to 2022, and the indications were expanded.In addition, "transformative" innovative products are also a key factor in their importance. The advent of two groundbreaking gene therapies, Casgevy and Lyfgenia, marks a significant milestone in the treatment of sickle cell disease.

Some Rejoice, Some Worry. The list also reflects companies that have encountered significant setbacks.

In 2023, Gilead Sciences experienced a major setback, falling out of the top 10 in the Innovation Index and dropping 12 places directly to 20th. Meanwhile, the company also fell to 24th place in the Invention Index.

Setback for Anti-CD47 Therapy Becomes the Last Straw. In July 2023, Gilead announced the halt of the ENHANCE study targeting high-risk myelodysplastic syndrome, citing unlikely meaningful outcomes. Shortly after, the FDA partially placed Gilead's magrolimab program on clinical hold for acute myeloid leukemia (AML) research. Following this, another study targeting TP53-mutated AML was also terminated.

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