Keytruda. If there was a word to symbolise the revolution at hand in oncology, this is it. Developed by the US pharmaceutical company Merck, this anti-cancer drug captures two of the industry’s current key trends: disruptive innovation and strong revenue growth. When it was launched in 2014, Keytruda was one of the pioneering drugs in immuno-oncology – a new way of treating cancer by restoring the immune system’s capability to destroy cancer cells.

"Immunotherapy revolutionised cancer treatment," says Professor Olivier Michielin, chair of the Department of Oncology and the Precision Oncology Service at Geneva University Hospitals (HUG). "Although it doesn’t work for all cancers or for all patients, immunotherapy can now be used to treat certain cancers that used to be synonymous with imminent death."

The result is that, in less than a decade, Keytruda has become the world’s best-selling drug. In 2023, sales of the anti-cancer drug totaled $25 billion. This year, sales will be much higher. In the first four months of 2024, Keytruda has already generated $6.9 billion in sales, a 20% increase from 2023. Analysts forecast that its annual revenue will exceed $30 billion by 2026, before its patent expires in 2028, when biosimilars are expected to hit the market.

"Immunotherapy is a great success both medically and commercially. It appeared about 15 years ago and has become a standard treatment for many cancers. And it will continue to develop," says Vincent Meunier, a specialist in the pharmaceutical sector and managing director of the investment bank Bryan, Garnier & Co. It won’t be the only one. Like immunotherapy in general, and Keytruda in particular, other innovations in oncology are raising tremendous hopes for patients, and are likely to generate strong revenue growth over the next few years.

A Precedence Research report estimates that the global cancer treatment market will reach $393.61 billion by 2032, up from $164 billion in 2022, coming out to annual growth of 9.2% over the period. "For investors, oncology is a very attractive area because there are so many innovations coming on stream," says David Kägi, portfolio manager at Robeco.

This view is shared by Vincent Meunier of Bryan, Garnier & Co. "Revenue generated by oncology will continue to grow considerably over the next few years. Unlike other more mature medical fields, such as cardiology – where most drugs are available as generics – oncology is known for its highly fertile research and development, with innovative treatments regularly introduced onto the market." Plenty of examples confirm this: messenger RNA vaccines, targeted therapies, bispecific antibodies and cell therapies are all new treatments or promising potential pathways for beating cancer, not to mention screening tests, an area also undergoing radical change.

Proof of this effervescence can be found in the astronomical sums involved in company takeovers. For example, in March 2023 the US pharmaceutical giant Pfizer bought the biotech company Seagen, which specialises in cancer therapies, for $43 billion. A few months later, in November 2023, another American company, Abbvie, shelled out $10.1 billion for ImmunoGen, another biotech that develops cancer treatments. Meanwhile, the Swiss giant Novartis continues to strengthen its oncology portfolio, with back-to-back acquisitions of the German company MorphoSys for CHF 2.5 billion in February 2024, and the US firm Mariana Oncology for $1 billion in May 2024.

So is this the right time for private investors to invest in promising oncology companies? "It’s difficult to generalise about the sector as a whole," says pharmaceutical sector specialist, Vincent Meunier. "It’s vital to identify innovative projects that offer a significant medical benefit, while trying to limit the binary risk associated with clinical trials." Rose Nguyen, investment manager of the Health Innovation strategy at Baillie Gifford, agrees. "To reduce the risks, we prefer to invest in companies with platforms that can be used to develop treatments for several cancers or pathologies."

The US company Moderna, which became famous during the pandemic, is a case in point. As its CEO Stéphane Bancel explained to Swissquote Magazine in December 2022, "Moderna is not a COVID-based company, but a technological platform." While this platform produces vaccines against COVID, it also develops vaccines against influenza, respiratory syncytial virus (RSV) and even... cancer. "The use of mRNA vaccines against cancer is a fascinating new approach," Nguyen adds. "For the time being, we’re only at the stage of clinical trials, but the initial results are very promising, particularly in terms of reducing the risk of recurrence. In fact, mRNA cancer vaccines could be on the market as early as 2025."

Oncologists will then have a new weapon at their disposal. "We now have an immense therapeutic arsenal against cancer, which will broaden even further over the next few years," says Professor Olivier Michielin of the HUG. “It’s a complete paradigm shift." And the impact on patients is very positive. "For a long time, a cancer diagnosis meant a death sentence," Vincent Meunier says. "Today, it no longer necessarily seals your fate, and we can reasonably envision that, one day, several types of cancers will become chronic diseases."

The figures are beginning to support this hope. The Swiss Federal Statistical Office (OFS) reported that cancer-related mortality rates fell in Switzerland by 28% for women and by 39% for men between 1988 and 2017. That means that women’s current risk of dying from cancer is one-third lower than those of the same age 30 years ago.

Yet much remains to be done before we can say that we have beaten all cancers. "We still don’t fully understand why certain treatments are effective for certain patients or certain cancers and not for others," Professor Michielin says. In Switzerland, over 68% of people stay alive five years after being diagnosed with cancer, but this overall rate masks a wide disparity. While 95% of melanoma sufferers in Switzerland are alive five years after diagnosis, the figure for pancreatic cancer is only 14%. "Very good progress has been made in cancer treatment, as shown by the improvement in survival rates in recent years," says David Kägi, portfolio manager at Robeco. "But there’s still a long way to go. Too many people are still dying from this disease."