The $200 Billion Patent Cliff
Why internal R&D can't replace expiring revenue fast enough
Starting Point (2025)
$200B+ Annual Revenue at Risk
↓
2026-2027
Novartis: Entresto ($6B), Cosentyx ($5B) patent expiries
2027-2028
Multiple blockbuster biosimilars launch across sector
2028-2030
Peak patent cliff impact - maximum revenue erosion
2030+
Replacement drugs (if successfully acquired or developed)
"Buy Biology When Patents Die"
❌ IMPOSSIBLE
Internal R&D
• 10-15 years development timeline
• $2+ billion per approval
• Can't replace $200B fast enough
• Math doesn't work
✓ VIABLE
External M&A
• 12-18 months to integrate
• Acquire de-risked Phase 2/3 assets
• Novartis: $12B for Avidity (Oct 2025)
• Proven playbook
The New Survival Rule
When $200B in revenue faces expiry over 5 years and internal development takes 10-15 years, the math is simple: organic replacement is mathematically impossible.
Required M&A pace: $15-25B annually across sector to replace expiring patents. Novartis' $12B Avidity acquisition (October 2025) represents first major proof point validating this playbook.
Expected sector M&A 2025-2027: $50-80B total deal value