15 Most Valuable Biotech Companies in the World
In this article we will take a look at the 15 most valuable biotech companies in the world. You can skip our detailed analysis of the biotechnology industry’s outlook for 2021, and some of the major growth catalysts for biotech stocks, and go directly to the 5 Most Valuable Biotech Companies in the World.
Mankind has used the biological processes of microorganisms for purposes as simple as making bread or as complicated as developing vaccines to combat infectious diseases. All thanks to science and technology. Biotechnology makes use of cellular processes to develop new technologies and treatments that can help improve health outcomes. By harnessing the power of the natural genetic makeup of organisms, biotech has helped reduce the rate of infectious diseases, save millions of lives, treat life-threatening conditions, and create precise tools to detect and cure diseases.
According to Global Market Insights, the biotech industry is expected to reach a valuation of over $775 billion by 2024 at a CAGR of 9.9% per year. Moreover, it was observed that the dominant position in the market was held by North American biotech companies due to increased R&D spending and growing demand for an efficient healthcare industry. There is no doubt that the biotech industry is in full swing, spurred by the COVID-19 pandemic. The emerging trends in the industry such as monoclonal antibodies, cell and gene therapies, and vaccine development has instilled a new sense of vigor within the scientific community. In fact, it has led to unprecedented public-private partnerships to pool resources and fund cutting-edge research that will eventually help improve the lives of many.
The growing interest in the biotech industry has multiplied since the beginning of the COVID-19 pandemic. In 2020 alone, more than $13 billion was invested in biotech companies around the world. The pandemic opened new avenues for the pursuit of novel scientific techniques to accelerate the development of a vaccine and other life-saving drugs.
The Race for a Vaccine
The response to the pandemic spurred biotech companies around the world to step up and develop tests and vaccines in record time. The first companies that were able to market an effective COVID-19 vaccine were Pfizer Inc. (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX). Their combined efforts were successful in getting an FDA approval and resulted in the distribution of millions of doses in less than a year. Pfizer Inc. (NYSE: PFE)’s COVID-19 vaccine was a double-dose vaccine with an efficacy rate of 95%. A week after the FDA approved the Pfizer vaccine, the second approval went to Moderna, Inc. (NASDAQ: MRNA)’s vaccine which also required two inoculations and had an efficacy rate of 94%. As of today, Moderna, Inc. (NASDAQ: MRNA) also has 13 programs in the clinical trial stage including other vaccines as well.
Another biotech company that came forward was AstraZeneca PLC (NASDAQ: AZN) that used DNA inside a chimpanzee cold virus to induce cells to produce antibodies against the coronavirus. This DNA-based vaccine also gained the FDA’s emergency approval and began distribution by the end of 2020. In 2021, Johnson & Johnson (NYSE: JNJ) has also been awarded a deal by the US government to produce 100 million doses of its COVID-19 vaccine.
Apart from vaccine development, the most valuable biotech companies in the world have developed cutting-edge technologies and novel therapies for immunology, oncology, ophthalmology, and neurology related diseases. Novo Nordisk A/S (NYSE: NVO) has established itself as the global leader in insulin production. There are many types of insulin, and the company has spent billions on R&D over the years to develop new products. Similarly, Eli Lilly and Company (NYSE: LLY) was the first company which engaged in mass production of the polio vaccine and human insulin by using recombinant DNA.
Biotech companies around the world are showing no signs of slowing down. The following companies are ranked in terms of their market cap.
With this context, and industry outlook in mind, let's now start discussing our list of the 15 most valuable biotech companies in the world.
15 Most Valuable Biotech Companies in the World
15. Biogen Inc. (NASDAQ: BIIB)
Market Cap: $49.469 billion Number of Hedge Fund Holders: 63
Biogen Inc. (NASDAQ: BIIB) is a Massachusetts-based biotech company that primarily focuses on the treatment of neurological diseases. It specializes in the development of neuro therapies and has created drugs for Parkinson’s, ophthalmology diseases, and immunology related illnesses. The company recently announced a licensing deal to manufacture compounds for neurological diseases with Sangamo Therapeutics. Biogen Inc. (NASDAQ: BIIB) has also completed the construction of a new facility in Switzerland to produce an Alzheimer’s drug which has recently been approved by the FDA. Its monoclonal antibody is attracting a lot of investors such as Warren Buffett who acquired 648,447 BIIB shares worth $192.4 million.
Biogen Inc. (NASDAQ: BIIB) has made use of the latest technology and engineering capabilities to produce high-quality medicines and has earned a revenue of over $13.44 billion in FY 2020. With a market cap of over $49.469 billion, Biogen Inc. (NASDAQ: BIIB) is one of the most valuable biotech companies in the world today.
Like Johnson & Johnson (NYSE: JNJ), Pfizer Inc. (NYSE: PFE), Novo Nordisk A/S (NYSE: NVO), Moderna, Inc. (NASDAQ: MRNA), and Novartis AG (NYSE: NVS), Biogen Inc. (NASDAQ: BIIB) is one of the most valuable biotech companies in the world.
In its Q2 2021 investor letter, Clearbridge Investments highlighted a few stocks, and Biogen Inc. (NASDAQ: BIIB) is one of them. Here is what Clearbridge Investments said:
“Biogen, which we purchased as a single drug, clinical stage biotech in 1991, saw its long-term investment in research and development pay off again in June with FDA approval of experimental Alzheimer’s treatment Aduhelm. Aduhelm became the first drug approved for Alzheimer’s in 20 years and the first approved to treat the underlying pathophysiology of the disease. We believe the rerating of Biogen shares following the decision validates the potential of innovation in the biopharmaceutical industry to be monetized.
The approval of Aduhelm should be broadly supportive of biotechnology and pharmaceutical stocks as it signals the agency’s willingness to be flexible and set new precedents to make drugs available to patients in therapeutic areas where the unmet need is significant. And it confirms our confidence that scientific breakthroughs in the industry can support long-term growth. That said, we also see opportunity among other types of disruptive health care companies, such as tools, labs, diagnostics, and other related health care services companies.”
14. Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX)
Market Cap: $51.496 billion Number of Hedge Fund Holders: 68
Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) is one of the pioneering biotech companies that made use of rational drug design instead of combinatorial chemistry. It is based in Boston, Massachusetts and has three more research facilities. The company has partnered up with Arbor Biotechnologies since 2019 to develop novel gene-editing therapies for diseases such as cystic fibrosis. Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) has many products in the pipeline for the treatment of specialty diseases such as sickle cell and mediated kidney diseases. The company’s latest CF drug called Trikafta brought in $3.9 billion in sales while the total revenue reported for 2020 amounted to $6.2 billion. Vertex is making a name for itself in the healthcare industry and has earned the number 14 spot in the list of the 15 most valuable biotech companies in the world.
Like Johnson & Johnson (NYSE: JNJ), Pfizer Inc. (NYSE: PFE), Novo Nordisk A/S (NYSE: NVO), Moderna, Inc. (NASDAQ: MRNA), and Novartis AG (NYSE: NVS), Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) is one of the most valuable biotech companies in the world.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX), and shared their insights on the company. This is what they said:
“While equity participation has been broadening, not all sectors and industries have benefited. Health care, which represents the Strategy’s second largest overweight, has lagged in recent months but we believe positive vaccine development and upcoming clinical news for other therapeutics will eventually lead to greater recognition by investors. Vertex Pharmaceuticals, continues to expand its cystic fibrosis franchise globally while advancing multiple underappreciated pipeline assets.”
13. Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN)
Market Cap: $61.559 billion Number of Hedge Fund Holders: 39
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) is a New York-based biotechnology firm that is involved in the manufacturing and development of several medicines. The company has a particular focus on developing neurotrophic factors and their regenerative capacities which is where its name comes from. In 2020, Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) was given a contract worth $450 million by the US government to manufacture artificial antibodies that treat and prevent COVID-19. The company has successfully developed a suite of patented technologies that can be used to create high-quality human antibodies that target different diseases. The company has a market cap of $61.56 billion and reported total revenue of $8.5 billion in FY 2020, making it one of the most valuable biotech companies in the world.
Here is what Polen Focus Growth Fund had to say about Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) in its Q1 2021 investor letter:
“We eliminated our position in Regeneron Pharmaceuticals also to help fund the Amazon addition. Regeneron’s revenue and earnings continue to grow roughly in line with our expectations. We believe Regeneron has a differentiated R&D model that has allowed it to bring novel biologic therapies to market in several therapeutic areas. That said, we believe Regeneron has intermediate-term risks that make a continued holding more difficult, particularly considering the recent opportunities we have seen for the Portfolio.
The company’s largest drug, Eylea, may face increasing competition as new competitive therapies have been approved, albeit without Eylea’s advantaged safety profile. In addition, the end of Eylea’s patent life coincides with a period when the U.S. government is seeking avenues to lower the reimbursement for certain drugs like Eylea. We believe Regeneron has many opportunities for continued growth in the coming years, and the competitive advantages from its proprietary drug development process remain intact. However, we feel the investment opportunity in Amazon was a better use of capital.”
12. BioNTech SE (NASDAQ: BNTX)
Market Cap: $69.138 billion Number of Hedge Fund Holders: 18
BioNTech SE (NASDAQ: BNTX) is a German company that has made waves in the biotech industry with its novel active immunotherapies for the treatment of diseases. The company has successfully developed pharmaceutical candidates based on mRNA to manufacture vaccines, protein replacement therapies, and engineered cell therapy. BioNTech SE (NASDAQ: BNTX) has made the news for the development of the COVID-19 vaccine with Pfizer which is being used around the world to battle the virus. The company earned a total revenue of $568 million in FY 2020. BioNTech SE has also started its efforts to combat malaria and has plans to develop supply operations in Africa. The company has a market cap of $69.138 billion, earning it the number 12 spot in the list of the 15 most valuable biotech companies in the world.
Like Johnson & Johnson (NYSE: JNJ), Pfizer Inc. (NYSE: PFE), Novo Nordisk A/S (NYSE: NVO), Moderna, Inc. (NASDAQ: MRNA), and AstraZeneca PLC (NASDAQ: AZN), BioNTech SE (NASDAQ: BNTX) is one of the most valuable biotech companies in the world.
11. Gilead Sciences, Inc. (NASDAQ: GILD)
Market Cap: $86.225 billion Number of Hedge Fund Holders: 65
California-based Gilead Sciences, Inc. (NASDAQ: GILD) is a biotech company that primarily focuses on developing drugs for antiviral diseases such as HIV and AIDS. The company already has many marketed drugs in its portfolio including Vistide for eye infections, Tamiflu for flu, and Viread for HIV treatment amongst others. The company has announced that it plans to acquire Immunomedics for $21 billion to expand its cancer treatment department operations. Gilead Sciences, Inc. (NASDAQ: GILD) has also acquired German biotech company, MYR GmbH to develop its technological capabilities. With a market cap of $86.225 billion, the company has earned a spot amongst the most valuable biotech companies in the world.
Like Johnson & Johnson (NYSE: JNJ), Pfizer Inc. (NYSE: PFE), Novo Nordisk A/S (NYSE: NVO), Moderna, Inc. (NASDAQ: MRNA), and AstraZeneca PLC (NASDAQ: AZN), Gilead Sciences, Inc. (NASDAQ: GILD) is one of the most valuable biotech companies in the world.
10. Moderna, Inc. (NASDAQ: MRNA)
Market Cap: $133.657 billion Number of Hedge Fund Holders: 39
Ranking at number 10 is Moderna, Inc. (NASDAQ: MRNA), based in Cambridge, Massachusetts. This biotech company is involved in the development of vaccines and therapeutics based on the mRNA to treat rare and infectious diseases. Founded in 2010, the company is using cutting-edge technology and already has 13 programs in the clinical trial stage. Moderna, Inc. (NASDAQ: MRNA)’s only commercial product is its namesake COVID-19 vaccine which has generated $803 million of revenue in 2020. With its state-of-the-art digital drug design tools and highly automated production facilities, Moderna, Inc. (NASDAQ: MRNA), has become one of the most valuable biotech companies in the world.
Like Johnson & Johnson (NYSE: JNJ), Pfizer Inc. (NYSE: PFE), Novo Nordisk A/S (NYSE: NVO), AstraZeneca PLC (NASDAQ: AZN), and Gilead Sciences, Inc. (NASDAQ: GILD), Moderna, Inc. (NASDAQ: MRNA) is one of the most valuable biotech companies in the world.
9. Amgen Inc. (NASDAQ: AMGN)
Market Cap: $140.812 billion Number of Hedge Fund Holders: 47
Amgen Inc. (NASDAQ: AMGN) is a California-based company that focuses on molecular biology and biochemistry to develop healthcare products. The company has also entered the biotechnology sector by introducing recombinant DNA technology to develop immunostimulators which can prevent infections in patients undergoing chemotherapy. Its most selling products include Neulasta and Enbrel which are user for the treatment of arthritis and other autoimmune illnesses. In March 2021, Amgen Inc. (NASDAQ: AMGN) announced its plans to acquire Five Prime Therapeutics and Rodeo Therapeutics to expand its operations. The company earned a total revenue of $25.4 billion in FY 2020 and currently has a market cap of $140.8 billion. Amgen Inc. (NASDAQ: AMGN) ranks 9th amongst the 15 most valuable biotech companies in the world.
Distillate Capital, an investment management firm, highlighted Amgen Inc. (NASDAQ: AMGN) in its Q4 2020 investor letter. This is what they said about the company:
“One of the biggest additions to the portfolio in the rebalance was Amgen Inc. The company underperformed the S&P 500 Index last quarter even though its free cash flow estimates increased. Because the portfolio’s weighting methodology is linked to free cash flow, position sizes increased to reflect improving fundamentals relative to prices, and the more attractive valuations that result.”
8. Bristol-Myers Squibb Company (NYSE: BMY)
Market Cap: $151.141 billion Number of Hedge Fund Holders: 81
Bristol-Myers Squibb Company (NYSE: BMY) was established in 1887 and is based in New York. It is involved in the development and production of biopharmaceutical products in oncology, immunology, hematology, and cardiovascular classes. The company is making use of novel technology through research and innovation to create new drugs which can help combat serious diseases. Bristol-Myers Squibb Company (NYSE: BMY) has also strengthened its biotech branch by acquiring Medarex in 2005. It was also recognized for producing the best biotech products in 2012 and 2015. With a market cap of $151.14 billion, Bristol-Myers Squibb Company (NYSE: BMY) has earned the number 8 spot amongst the 15 most valuable companies in the world.
Like Johnson & Johnson (NYSE: JNJ), Pfizer Inc. (NYSE: PFE), Novo Nordisk A/S (NYSE: NVO), Moderna, Inc. (NASDAQ: MRNA), and AstraZeneca PLC (NASDAQ: AZN), Bristol-Myers Squibb Company (NYSE: BMY) is one of the most valuable biotech companies in the world.
7. AstraZeneca PLC (NASDAQ: AZN)
Market Cap: $176.705 billion Number of Hedge Fund Holders: 34
AstraZeneca PLC (NASDAQ: AZN) was established in 1999 with the merger of the Swedish company Astra AB and the British company Zeneca Group. The company has evolved as one of the largest pharmaceuticals and biotechnology companies in the world and is based in Cambridge, England. AstraZeneca PLC (NASDAQ: AZN) has a huge drug portfolio consisting of products for the treatment of major illnesses such as infections, respiratory diseases, and cancer etc. The company has recently been in the news due to its namesake COVID-19 vaccine and the various controversies associated with it. AstraZeneca PLC (NASDAQ: AZN) has a market cap of $176.7 billion, ranking 7th in the list of the 15 most valuable biotech companies in the world.
Like Pfizer Inc. (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), Novo Nordisk A/S (NYSE: NVO), Moderna, Inc. (NASDAQ: MRNA), and Bristol-Myers Squibb Company (NYSE: BMY), AstraZeneca PLC (NASDAQ: AZN) is one of the most valuable biotech companies in the world.
In the Q4 2020 Investor Letter, Baron Health Care Fund highlighted a few stocks and AstraZeneca Plc (NASDAQ:AZN) is one of them. Here is what the Fund said:
“AstraZeneca PLC is a multinational pharmaceutical company developing drugs across multiple therapeutic areas such as oncology and respiratory diseases. Shares were impacted by news of AstraZeneca’s joint development with Oxford University of a viral-based COVID-19 vaccine. Given a mixed data set due to an unforeseen error in dosing that occurred in the Brazilian market, the vaccine timelines slipped, hurting share performance. Our investment thesis on AstraZeneca is not dependent on COVID-19 but rather its best-in-class large-cap growth profile, and we retain conviction.”
6. Novo Nordisk A/S (NYSE: NVO)
Market Cap: $204.09 billion Number of Hedge Fund Holders: 23
Novo Nordisk A/S (NYSE: NVO) is a Danish biotech company which focuses on the provision of diabetes medication, growth hormone therapy, and hormone replacement therapy. Its products are used in over 180 countries and has over 40,000 employees worldwide. Novo Nordisk A/S (NYSE: NVO) pioneered the cutting-edge gene technology and is using it to discover new medical treatments for different diseases. Their aim is to engineer proteins into safe therapies for patients. Their products include several insulin product variants and other biological medicines that are derived from yeast, bacteria, and other production cells. In 2020, Novo Nordisk A/S (NYSE: NVO) reported total revenue of $20.14 billion. The healthcare giant has a market cap of $204.09 billion and ranks 6th amongst the 15 most valuable biotech companies in the world.
LRT Capital Management shared their insights regarding Novo Nordisk A/S (NYSE: NVO) in their Q1 2021 investor letter. This is what they had to say:
“Novo Nordisk is the global leader in insulin, which is, sadly, a growing business as more and more people around the world suffer from diabetes. Millions of people need daily injections of insulin to stay alive, a number that, unfortunately, is likely to continue to grow by millions more in the coming decade. It may seem at first glance that insulin should be a commoditized business, after all, it was discovered and synthesized over a hundred years ago, but nothing could be further from the truth. There are many types of insulin and Novo Nordisk has spent billions on R&D over the years to develop new products. On February 11th, the company reported favorable results from a phase-3 trial of Semaglutide, a drug that is currently used for Type 2 diabetes treatment. The study evaluated the use of Semaglutide for weight loss treatment in non-diabetic patients and found a significant impact on weight loss for patients receiving Semaglutide vs. the placebo control group. If Semaglutide is approved for weight loss treatment, we expect it will be meaningfully accretive to the company’s bottom line.
Furthermore, Novo Nordisk reported Q4 2020 earnings on February 3rd, with flat revenues YoY and EPS growth of +8%. The company’s proprietary product line supports returns on invested capital of over 40%, and while sales growth is relatively slow (+6% annualized CAGR over the past decade), the company’s shares trade at a reasonable valuation of only 21x forward earnings. For a company with an extremely predictable business, high returns on capital, and a forecastable future, we believe this to be highly attractive. Shares are down 1.75% year-to-date.”
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Disclosure: None. 15 Most Valuable Biotech Companies in the World is originally published on Insider Monkey.
