Johnson & Johnson, Pfizer, and Merck Lost $3.5B in Combined YTD Revenue

The coronavirus pandemic put enormous pressure on the healthcare industry, forcing pharmaceutical giants to roll out clinical trials for a COVID-19 vaccine at breakneck speed.

At the same time, significant changes in demand, research and development processes, and regulation revisions amid the coronavirus crisis cut down revenues of the biggest players in the market and slowed down the growth of the entire pharmaceutical industry.

According to data presented by Aksje Bloggen, Johnson & Johnson, Pfizer and Merck, as the three leading pharma companies by sales, lost $3.5bn in combined YTD revenue.

Pfizer Revenues Dropped by $3B YTD, The Biggest Drop Among Top Three Companies

With over $80bn in annual revenue, around $30bn more than the next ranked company, Pfizer, Johnson & Johnson represents the world’s largest pharmaceutical company. However, the earnings report of the US multinational corporation revealed this figure is expected to drop amid the COVID-19 crisis.

After a steady growth between January and March, Johnson & Johnson’s revenue dropped by 10.8% YoY to $18.3bn in the second quarter of the year. The Group’s Q2 2020 results also showed consumer health sales fell 7% to $3.3bn, while pharmaceutical division revenues increased 2.1% to $10.75bn. Medical device sales tumbled 34% to $4.3 billion, as the coronavirus pandemic triggered postponements and cancellations of non-emergency surgeries.

Although the company recovered after the initial impact of the COVID-19 crisis, with sales growing by 1.7% to $21.1bn the third quarter, statistics show Johnson & Johnson`s revenue for the nine months dropped by $1.1bn.

As the second-largest pharma company by revenue, Pfizer has taken the hardest financial among the top three companies. Statistics indicate the revenue of the US pharma giant dropped by 7% to $12.5bn in the first months of 2020. The negative trend continued in the second quarter, with revenue falling to $11.8bn, a 9% decrease YoY.

Third-quarter sales dropped by $500 million, or 4%, due to COVID-19, primarily driven by lower demand for certain products in China and disruptions to wellness visits for patients in the United States, negatively impacting prescribing patterns for specific products. Statistics show Pfizer’s revenue for the nine months of 2020 amounted to $35.9bn, a $3bn drop year-over-year.

Merck, as the third-largest pharma giant by sales, was the only company on this list whose revenue slightly increased in the nine months, mostly driven by strong performance in the first quarter of 2020.

After an 11% growth YoY between January and March, Merck’s revenue fell by 8% to $10.9bn in the second quarter. Third-quarter worldwide sales hit $12.6bn, an increase of 1% YoY. Statistics show the US pharmaceutical giant generated $35.5bn in the nine months of 2020, a $600 million increase compared to the same period a year ago.

Johnson & Johnson Stocks Rise, Merck’s Market Cap Dropped by $29bn YTD

Besides sizeable revenue drops due to the Covid-19 pandemic, some of the leading companies responsible for the research, development, and production of medications also witnessed significant market cap drops this year.

Statistics show that Merck`s market cap plunged by almost $29bn in 2020, the biggest drop among the top three companies. In December 2019, the company’s combined value of shares stood at $230.9bn. However, this figure fell to $194bn after a stock market crash in March. The following months witnessed a recovery, with the market cap peaking at $216.4bn in September. However, this figure slumped to $202bn last week, a 12% YTD decrease.

Pfizer’s market cap stood at $201.8bn in the third week of November, almost $15bn drop since the beginning of the year.

The Yahoo Finance data showed Johnson & Johnson is the only company among the top three pharma giants whose market cap increased amid the COVID-19 outbreak. After a sharp fall to $345.1bn in March, the market cap of the world’s largest pharma company rose to $370.1bn in the second quarter of 2020 and continued growing. Last week, Johnson & Johnson market cap stood at $385.3bn, a $1.3bn increase since the beginning of 2020.