On October 31, Merck was the first to release its third-quarter financial report. In the first three quarters, K drug performed as well as ever, with sales of US$21.646 billion, a year-on-year increase of 18%, and annual sales are expected to exceed US$29 billion.

According to this trend, K drug is likely to defend the title of King of Medicine in 2024. However, on November 6, after Novo Nordisk released its third-quarter report, the competition for the King of Medicine caused a stir. In the first three quarters, the total sales of multiple versions of semaglutide reached US$20.3 billion, approaching K drug. Such a limited gap also indicates the fierceness of the competition for the King of Medicine. Before the results of the fourth quarter are announced, no one knows the final answer. Will K drug become the "shortest-lived King of Medicine" in history?

On February 1, 2024, with the release of Merck's 2023 financial report, the competition for the King of Medicine in 2023 lost suspense. K drug's annual sales reached 25 billion US dollars, and it was crowned the king of medicine for the first time. Although last year's performance was strong enough, K drug's high growth has not ended. As mentioned above, K drug's sales in the first three quarters of this year reached 21.646 billion US dollars, an increase of 18% year-on-year. It may not be surprising that K drug can still maintain sustained growth with such a high base. Looking back at K drug's road to kingship, it is to continuously explore the unmanned area under the guidance of science, and it is accumulated by countless clinical trials. So far, K drug has been approved for 40 indications in the United States, covering 20 cancer types such as melanoma, lung cancer, liver cancer, head and neck cancer, including multiple first-line treatments.

It is the continuous approval of indications that keeps K drug's growth engine changing. This year, K drug's strong growth is mainly due to the continued strong demand for early indications and metastatic indications. Specifically, the growth of K drug in the United States is mainly due to the adjuvant/neoadjuvant treatment of NSCLC and the indication of advanced urothelial carcinoma; in markets outside the United States, the growth of K drug is mainly due to the adjuvant/neoadjuvant treatment of triple-negative breast cancer and renal cancer, as well as the demand for metastatic indications.
You should know that only last year did the FDA approve the combination of K drug and platinum-containing chemotherapy as neoadjuvant therapy before surgery, and as a single drug as adjuvant therapy after surgery, for the treatment of patients with resectable NSCLC. This means that after the indication was approved for marketing, it started very strongly. According to Merck, there are currently more than 1,600 trials studying the application of K drug in various cancers and treatment environments. This means that in the future, K drug may unlock more indications. This will not only continue to bring hope to countless patients, but also continue to add momentum to Merck.

At the beginning of the year, the market speculated that K drug might become the "shortest-lived drug king" in history. Because semaglutide's annual sales last year were close to 21.2 billion US dollars, doubling year-on-year. GLP-1 is very strong, but I didn't expect semaglutide to catch up so quickly and further narrow the gap with K drug. This also brings suspense to the battle for the king of medicine in 2024.

So far, there are three versions of semaglutide on sale, namely the injectable hypoglycemic version Ozempic, the oral hypoglycemic version Rybelsus, and the injectable weight loss version Wegovy. In general, the high growth of semaglutide is due to the strong demand in the hypoglycemic field. Among them, Ozempic had a total revenue of 86.489 billion Danish kroner in the third quarter, about 12.48 billion US dollars, a year-on-year increase of 32%; Rybelsus had a revenue of 16.384 billion Danish kroner, about 2.36 billion US dollars, a year-on-year increase of 28%.

On the other hand, in the field of weight loss indications, demand is still rising, and Eli Lilly's offensive has been maintained. In the first three quarters, Wegovy's revenue was 38.34 billion Danish kroner, about 5.53 billion US dollars, a year-on-year increase of 76%. If we only look at the third quarter, Wegovy increased by 79% year-on-year to 17.3 billion Danish kroner, higher than the market expectation of 15.6 billion Danish kroner. The company said that despite the price drop, the drug's sales in the United States still increased by about 50% as more insurance companies agreed to pay for the drug.

It is with this momentum that Novo Nordisk expects full-year sales growth of between 23% and 27%. Based on last year's revenue, Novo Nordisk's revenue ceiling will be around $42.5 billion. In the first three quarters of this year, the total sales of semaglutide accounted for 69% of total revenue. If this ratio is maintained, the annual revenue ceiling of semaglutide will be $29.3 billion, which is on par with Ke drug. In the fourth quarter, the performance of semaglutide will be very critical.

Although the final ownership of the king of medicine has yet to be revealed, the duel between the two kings also allows us to see the excitement of the era of innovative drugs.

After all, whether it is Ke drug or semaglutide, its sales peak will far exceed the old generation of drug king Humira. An important reason why these drugs can continue to expand is the improvement of pharmaceutical companies' understanding of drugs and the development and progress of biotechnology. Fundamentally speaking, technology is the primary productive force. In the future, domestic pharmaceutical companies may also be able to participate in the competition for this position. Of course, the environment is also very critical.

An objective reality that cannot be ignored is that the emergence of the King of Medicine is essentially the accumulation of money and even failures. This can be seen from the R&D investment of the competitors of the King of Medicine. In the first three quarters, Merck's R&D investment reached 13.3 billion US dollars, accounting for about 27% of its revenue. This is still an investment under its relatively convergent situation. In the first three quarters of last year, Merck's R&D expenses exceeded 20 billion US dollars, making it one of the most expensive companies in the world.

Although Novo Nordisk is not as aggressive as Merck, it has also started an accelerated expansion model in recent years, from acquiring industrialization bases to accelerating the introduction of a new generation of weight loss drugs. The growth rate of R&D investment has maintained more than 30% for two consecutive years, even higher than the growth rate of revenue. In the first three quarters of this year, its R&D expenses increased from US$2 billion in the same period last year to US$3.6 billion, a growth rate of 79%. Everyone knows that R&D costs money, but it seems that no one knows clearly what the number corresponding to the "high" R&D expenses is. This also tells us that if Chinese pharmaceutical companies want to truly participate in the competition for the title of "King of Medicine", they still have a long way to go.

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