4. Novartis

Novartis racked up six new drug approvals in 2019. (Novartis)

R&D budget: $9.4 billion
Change from 2018: +13%
Total 2019 revenue: $47.45 billion
R&D budget as percentage of revenue: 19.8%

There’s no doubting that Novartis had a stellar year in 2019. All told, the Swiss group racked up six new drug approvals, giving it a giant leap forward in its pledge to launch 25 blockbuster drugs in the next few years.

With so many late-stage projects coming to fruition it makes sense that spending on R&D rose sharply in 2019. But the 13% increase also came in spite of a big pipeline cull in 2018 after Vas Narasimhan took over the CEO role from Joe Jimenez.

The big highlight of the year was the FDA's green light for Zolgensma (onasemnogene abeparvovec) for spinal muscular atrophy (SMA). Only the second FDA-approved gene therapy, Zolgensma generated more than its share of headlines, thanks to its $2.1 million record price—which didn’t stop it getting the backing of cost-effectiveness watchdogs—and a data manipulation scandal.

It has started with a bang commercially, too, as it chases down peak sales estimates of almost $2 billion, although a delay to a market-expanding intrathecal dosing regimen could put a damper on growth this year.

An array of other Novartis hopefuls joined Zolgensma on the market, too. That includes Piqray (alpelisib), which became the first drug approved specifically for HR+/HER2- breast cancer patients with a PIK3CA mutation. It’s expected to steal market share from Pfizer’s Ibrance (palbociclib) and Eli Lilly’s Verzenio (abemaciclib) in second-line metastatic HR+/HER2- breast cancer.

Meanwhile, Mayzent (siponimod) scooped the prize of becoming the first drug to be cleared for secondary progressive multiple sclerosis in more than 15 years. That opens up a huge market for the drug as four out of five patients with relapsing forms of MS go onto to develop SPMS. Initial uptake was slow but is gathering speed, with first quarter 2020 sales reaching $30 million and peak sales estimated at $1.3 billion.

Novartis also snared an approval for VEGF inhibitor Beovu (brolucizumab) for wet age-related macular degeneration (AMD), challenging rival blockbusters from Regeneron (Eylea) and Roche (Lucentis) that will lose patent protection this year. Beovu is tipped to bring in upwards of $1 billion a year in sales, albeit ahead of a safety signal that now threatens those esimates.

As 2019 drew to close, the FDA also gave the nod to Adakveo (crizanlizumab), the Swiss drugmaker's P-selectin blocker for painful complications of sickle cell disease. That drug could also top $1 billion in annual sales, analyst say, which would be a handsome return on the $665 million Novartis paid to acquire the drug in its buyout of Selexys.

While 2019 will be a tough act to follow, Novartis is bullish about 2020. The company expects to launch several major new molecular entities this year too, including anti-CD20 drug ofatumumab (OMB157), otherwise known as Arzerra. Novartis is repurposing the leukemia therapy for relapsing multiple sclerosis, aiming to steal share from Roche’s fast-growing Ocrevus (ocrelizumab) with subcutaneous rather than intravenous dosing.

Plus, Novartis just claimed accelerated approval for Tabrecta (capmatinib) or metastatic non-small cell lung cancer (NSCLC) patients with MET exon 14 skipping mutations, beating Merck KGaA’s Tepmetko (tepotinib) to the U.S. market for that indication. Also heading for regulatory filings is PD-1 inhibitor spartalizumab, Novartis’ first immuno-oncology drug, which is being developed in combination with its successful Tafinlar/Mekinist pairing in melanoma.

The company also bolstered its pipeline late last year with a $9.7 billion buyout of The Medicines Company, focused on inclisiran, a PCSK9 cholesterol med. The deal is seen as a sizeable gamble, however; inclisiran boasts a less-frequent dosing schedule than other drugs in the class—Amgen’s Repatha and Sanofi and Regeneron’s Praluent—but industry watchers are skeptical that the Swiss drugmaker can recoup its investment. Estimates are that inclisiran could top $1.5 billion in sales by 2024.

2019 wasn't without its disappointments, however. For one, Novartis dropped fevipiprant, a first-in-class CRTh2 antagonist for eosinophilic asthma, after it failed to improve lung function in two phase 3 trials.

Others included the demise of Amgen-partnered BACE1 inhibitor umibecestat for Alzheimer’s disease, though that wasn’t a big surprise after several other drugs in the class failed, and atopic dermatitis prospect MOR106. Novartis also licensed out all its unwanted early-stage infectious disease assets to Gilead in yet another Big Pharma retreat from the category.

Despite having 300 trials currently on the go in some 96,000 patients, Novartis hasn't suffered a major R&D setback amid the coronavirus pandemic. There has been some disruption to studies in the planning or start-up phases, but the company says its longstanding commitment to digital tech—such as remote monitoring visits—has softened the blow.

Novartis has also started testing three of its drugs as potential treatments for COVID-19, namely canakinumab, JAK inhibitor ruxolitinib and malaria drug hydroxychloroquine.

Check out Novartis’ pipeline here.

4. Novartis