Between 2021 and 2023, the drugmaking business experienced contrasting states of health. While the index of American big pharma rose by a third, outperforming the broader stock market due to robust sales of blockbuster drugs, the index of smaller biotechnology companies sank by roughly the same amount. The biotech companies were weighed down by rising interest rates and the dissipating pandemic-era euphoria for all things medical. Unlisted biotech startups found it challenging to attract capital, with investments dropping from $37bn to $17bn in just two years.
Despite these challenges, the giants in the pharmaceutical industry continued to thrive. On April 30th, Eli Lilly, known for its hit weight-loss treatment, reported strong quarterly results. Similarly, on May 2nd, Novo Nordisk, a Danish rival with its own anti-obesity drug, was expected to do the same. The combined value of these two giants increased from $350bn to $1.2trn in three years. However, there are positive signs for the biotech sector as well, with their overall health improving.
Between 2021 and 2023, the drugmaking business experienced contrasting states of health. While the index of American big pharma rose by a third due to robust sales of blockbuster drugs and outperforming the broader stock market, smaller biotechnology companies sank by roughly the same amount due to rising interest rates and dissipating pandemic-era euphoria for all things medical. Unlisted biotech startups struggled to attract capital during this period as investments dropped from $37bn to $17bn in two years. Fewer startups went public while more went bust during this timeframe. Despite these difficulties faced by small biotech companies