Healthcare · Biotech
Biotech Franchise Concentration
Lead-franchise revenue share in biotech: Vertex cystic fibrosis 92.9%, Gilead HIV 70.5%, Moderna COVID 93.1%, and why growing and shrinking franchises differ.
Selborne Research · Biotech coverage: 7 guides, 6 company profiles, a primer and Excel model
Educational analysis for professional use. This guide is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
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Lead Franchise Share Sets the Size of a Shock
Concentration is lead-franchise revenue divided by total revenue. Above 70%, a patent expiry, a safety signal or an insurer demanding bigger rebates moves the whole company. What matters next is whether the concentrated revenue is growing under patent protection or shrinking.
Where revenue arrives as a partner’s profit share, measure it on that share (partnership economics); where it is shrinking faster than R&D can be cut, check the cash runway.
FY2025 Lead-Franchise Share, Six Companies
| Company | Lead franchise / asset | Revenue ($M) | Share of total | Basis |
|---|---|---|---|---|
| Vertex (VRTX) | Cystic fibrosis, CF (TRIKAFTA/KAFTRIO + ALYFTREK) | $11,150.5 | 92.9% | Product revenue ÷ total revenue |
| Moderna (MRNA) | COVID vaccines | $1,810 | 93.1% | Product sales ÷ total revenue |
| Gilead (GILD) | HIV portfolio | $20,752 | 70.5% | Product revenue ÷ total revenue |
| Regeneron (REGN) | Dupixent (eczema, asthma) and Kevzara (rheumatoid arthritis) profit share from Sanofi | $5,242 | 36.5% | Profit share ÷ total revenue |
| BioMarin (BMRN) | VOXZOGO (achondroplasia, a form of dwarfism) | $926.9 | 28.8% | Product revenue ÷ total revenue |
| Amgen (AMGN) | Prolia (osteoporosis; largest product) | $4,414 | 12.0% | Product revenue ÷ total revenue |
Vertex and Moderna both exceed 90%, yet their franchises are heading in opposite directions.
Growing vs Shrinking Concentration
| Dimension | Vertex CF (growing) | Moderna COVID (shrinking) |
|---|---|---|
| Franchise trend | CF revenue growing; ALYFTREK launch | COVID revenue $1.8B, down from pandemic peak |
| Profitability | GAAP net income $3,953M | GAAP net loss $(2,822)M |
| Liquidity | $12.3B liquid securities (31 December 2025) | $8.1B cash + investments; runway ~17 qtrs |
| Pipeline role | Next-generation CF drug VX-828, plus povetacicept for the kidney disease IgA nephropathy (under FDA review as of August 2026) | Cancer vaccine intismeran: Phase 3 fully enrolled (February 2026) |
Gilead sits between the two: 70.5% HIV concentration, its HIV pill Biktarvy at $14.3B (+7% YoY) and +$10.0B of FY2025 operating cash flow. A Phase 3 miss for its breast cancer drug Trodelvy (the ASCENT-07 study) shows what diversifying into oncology can cost.
Worked Example: Concentration Ratio
| Metric | Vertex CF | Gilead HIV |
|---|---|---|
| Franchise revenue | $11,150.5M | $20,752M |
| Total revenue | $12,001.3M | $29,443M |
| Concentration | 92.9% | 70.5% |
A 50% fall in CF revenue, with nothing to offset it, cuts Vertex’s total revenue ~46% (0.929 × 0.5). A 50% fall in HIV cuts Gilead’s ~35% (0.705 × 0.5).
A Platform Does Not Remove Concentration Risk
A company built on a reusable technology still depends on what it sells today. A 2025 paper in the Proceedings of the National Academy of Sciences argues platform value exists only once the technology is actually reused, and Moderna’s COVID vaccines were still 93.1% of FY2025 revenue of $1.9B. Put value for undisclosed programmes in a risk-adjusted NPV; concentration is still measured on today’s revenue. Platform vs single-asset biotech covers how programmes sharing one technology fail together.
Reading Concentration in Filings
Vertex: CF was 92.9% of FY2025 revenue and the company generates cash, with VX-828 proof-of-concept data expected in the second half of 2026 (as of August 2026). See Vertex.
Gilead: HIV 70.5%, Biktarvy $14.3B, and mixed Phase 3 results in oncology. HIV patents and competition still dominate the DCF. See Gilead.
Regeneron: model Dupixent at Regeneron’s $5.2B profit share (36.5% of revenue), not Sanofi’s $17.8B of global sales.
A clinical-stage company's two programmes are valued year by year and its cash rolled forward to first sales, beside a franchise owner valued through its patent cliff.
- 15 sections, the clinical stage ladder to cash runway, multi-programme rNPV and a patent cliff
- 41 pages
- a two-programme clinical-stage company with its runway and dilution, a concentrated franchise owner and a diversified profitable company
- 3 worked companies
- profitable franchise owners and a cash-burner, on filed concentration, cash and burn
- 6-company screen
The Excel model is the primer's rNPV engine live across 13 sheets: a phase-by-phase PoS chain on BIO 2011-2020 rates, from Phase I to Approved; three worked companies, each switchable between clinical and commercial mode and valued year by year over 20 years, with later-phase R&D weighted by the odds of reaching it; a valuation summary with franchise floors; a runway calculator that rolls real cash forward, shows when it runs out if the lead fails, and prices the dilution from the raise; concentration and patent-cliff views; and a sensitivity grid. Change PoS, peak sales, R&D or the discount rate and the value moves.
See what's in the Biotech Sector Primer →£25 PDF · £59 with the Excel model · £159 for all three Healthcare industries
Frequently Asked Questions
- What is biotech franchise concentration?
- Franchise concentration measures how much of a company's revenue depends on a single therapeutic area or product line. Lead franchise revenue divided by total revenue is the standard screen. The higher the share, the more of the company moves at once when patents expire, competitors launch or payers push back on price.
- How concentrated are Vertex and Gilead?
- FY2025 filings show Vertex's cystic fibrosis (CF) products (TRIKAFTA/KAFTRIO and ALYFTREK) at 92.9% of total revenue ($11,150.5M of $12,001.3M). Gilead's HIV portfolio was 70.5% of revenue ($20,752M of $29,443M). Both are highly concentrated, and a given percentage fall in the lead franchise hits Vertex's total revenue harder.
- Is high concentration always bad?
- Not on its own. Concentration measures how much rides on one franchise, not whether that franchise is growing. Vertex, with CF at 92.9% of revenue, reported $3,953M of FY2025 GAAP net income and $12.3B of cash and marketable securities at 31 December 2025; Gilead's HIV portfolio grew 6% with Biktarvy at $14.3B. Concentration bites hardest when the concentrated revenue is shrinking: Moderna's COVID vaccines were 93.1% of FY2025 revenue after sales fell from their pandemic peak.
- How does concentration interact with partnership economics?
- Partnership structures can understate or overstate concentration on the income statement. Regeneron books its share of Dupixent and Kevzara profits, $5.2B in FY2025 (36.5% of revenue), not Sanofi's $17.8B of Dupixent global sales. Always use the economic share the company recognises.
Read next
Biotech Partnership Economics
Biotech profit-share partnerships: Regeneron Dupixent $5.2B profit share versus Sanofi $17.8B global sales, the 3.4x booking trap, and rNPV on the economic share alone.
Biotech Cash Runway Explained
Cash runway formula for pre-profit biotech: liquidity divided by quarterly operating cash outflow, the 4- and 8-quarter reference points, and why net loss is the wrong denominator.
Platform vs Single-Asset Biotech
How programmes that share one technology fail together: a worked example of correlated pipeline risk, the sum-of-programmes floor, and what FDA platform designation does and does not do.
Pharma Concentration Risk
Largest-product revenue share as a risk screen: FY2025 ladder from Pfizer Eliquis 12.7% to Lilly tirzepatide 56.0%, with 25–30% and 40% concentration screens.
See it applied
These company profiles apply the concepts from this guide to real public companies.