Erosion risks

• Patent challenges or earlier-than-expected loss of exclusivity
• Rapid competitor innovation (next-gen incretins, oral GLP-1s) reducing differentiation pre-LOE
• Regulatory changes affecting data/package exclusivity

Leading indicators

• Patent litigation outcomes and settlement dates
• Regulatory exclusivity changes (e.g., data-package rules)
• Competitor trial readouts in obesity/diabetes

Counterarguments

• IP protection is time-limited; post-LOE price erosion can be rapid
• Competitors can innovate around claims (new molecules/delivery) before LOE

Erosion risks

• Execution risk: delays in new capacity, quality issues, or regulatory actions at plants
• Third-party/CMO constraints for devices/fill-finish/inputs
• Demand normalization reducing scarcity premium

Leading indicators

• Backorder status / supply constraints for key SKUs
• Capex run-rate and plant commissioning milestones
• FDA inspection outcomes and warning letters (if any)

Counterarguments

• Competitors can also invest; capacity advantages may narrow over time
• Capacity does not guarantee pricing power if payer coverage is constrained

Erosion risks

• Adverse-event or safety signals altering prescriber confidence
• Payer restrictions limiting access (coverage exclusions, prior auth)
• Illegally compounded/counterfeit incretins creating safety events and confusion

Leading indicators

• Weekly prescription volume (TRx/NBRx) and share
• Real-world safety/label updates
• Coverage expansions or restrictions for obesity indications

Counterarguments

• Prescribers and patients can switch if competitors match outcomes or offer lower net cost
• Access constraints (coverage exclusions) can dominate clinical preference

Erosion risks

• Trial failures or safety signals
• Regulatory standards tightening (endpoints, confirmatory trials)
• Competitors' faster trial execution and earlier approvals

Leading indicators

• Clinical trial readouts vs expected timelines
• FDA/EMA approval decisions and label expansions
• Share-of-care changes in key indications

Counterarguments

• Large pharma peers have comparable regulatory and trial execution capabilities
• Many oncology markets remain crowded; differentiation can be fleeting

Erosion risks

• Loss of exclusivity and biosimilar/generic entry
• Patent litigation or design-around strategies
• Price pressure from payers and government programs

Leading indicators

• IP litigation status and patent expiry timeline updates
• Biosimilar pipeline announcements in key molecules/classes
• Net price and gross-to-net trends

Counterarguments

• Exclusivity is temporary; oncology LOE can cause sharp revenue declines
• Competitors can displace branded drugs via superior efficacy or tolerability before LOE

Erosion risks

• Manufacturing scale-up challenges (yield, quality) for complex modalities
• Rapid tech shifts (new linkers/payloads, novel radioligands) making capacity less differentiated
• Competition for scarce specialized talent and suppliers

Leading indicators

• Plant completion/validation milestones
• Regulatory inspection outcomes
• Number of clinical candidates using these modalities

Counterarguments

• Competitors and CMOs can also build/offer these capabilities; advantages may be transient
• Commercial success still depends primarily on clinical differentiation, not manufacturing alone

Erosion risks

• Biosimilar competition after exclusivity loss
• Formulary-driven switching and aggressive rebating
• Safety/label changes impacting prescriber confidence

Leading indicators

• Biosimilar filings/launch timing for key molecules
• Formulary status changes and rebate levels (gross-to-net)
• Adverse-event trends and label updates

Counterarguments

• Immunology categories are competitive; payers often force price competition
• Biosimilar entry can erode volume and price quickly after LOE

Erosion risks

• Regulatory changes to biosimilar interchangeability or accelerated pathways
• Clinical differentiation narrowing as competitors improve
• Increased real-world evidence requirements

Leading indicators

• Approval/label expansion cadence
• Comparative effectiveness evidence emergence
• Regulatory policy changes for biologics/biosimilars

Counterarguments

• Large competitors have similar capabilities and resources
• Differentiation may hinge more on clinical profile than regulatory experience

Erosion risks

• Quality lapses or supply disruptions triggering regulatory actions
• CMO capacity growth reducing differentiation of internal networks
• Technological shifts (new formulations/delivery) changing manufacturing needs

Leading indicators

• Supply reliability metrics and backorder status
• Inspection outcomes at internal and key third-party sites
• Capex and capacity ramp milestones

Counterarguments

• Many biologics manufacturers have comparable quality systems; capacity may not be a lasting differentiator
• If demand shifts or payers restrict use, scale investments may not translate into advantage

Erosion risks

• Post-LOE generic/biosimilar erosion
• Safety signals (especially in neurodegenerative indications)
• Competitive displacement by superior efficacy/tolerability

Leading indicators

• Patent timeline updates and litigation status
• Real-world safety data and label changes
• Competitive approvals and head-to-head evidence

Counterarguments

• CNS markets can shift quickly with new clinical data; patents do not guarantee durable share
• Payers can restrict high-cost therapies (step edits, prior auth)

Erosion risks

• Regulators require confirmatory trials or restrict labels
• Coverage limitations for neurodegenerative therapies
• High R&D costs and trial delays

Leading indicators

• Regulatory decisions and post-marketing requirements
• Payer coverage (including government programs) and utilization controls
• Pipeline readouts in Alzheimer's and migraine

Counterarguments

• Large competitors also pursue CNS programs; clinical differentiation is the main driver
• Even approved therapies may face limited uptake if coverage or logistics are complex

Erosion risks

• Revenue concentration shifting away from smaller products
• Partner-driven decisions in collaborations (termination/renegotiation)
• LOE and competitive displacement

Leading indicators

• Collaboration milestone/royalty trends
• Portfolio rationalization actions (divestitures/terminations)
• Pipeline additions that replenish smaller categories

Counterarguments

• General R&D capability is shared by many large pharmas; not uniquely defensible
• Other revenue is often less stable and less moat-protected than core franchises