No venue prices the a16z Blog thesis that Big Pharma can rival Big Software, so there are no current odds, no volume and no move to track. The limit is that this is an investor thesis, not a resolvable event. Not financial advice. Markets move fast.
Can drugmakers really be worth as much as software giants? A16z says yes, and AI will widen the prize.
A blockbuster drug is a therapy projected to top $1B in yearly sales. A16z counts more than 300 such drugs globally, per its Nov. 13 post, and pegs the top 30 pharma companies at roughly $5T in market cap. Nine pharma companies top $200B, per a16z, against 16 software companies at that size, with Eli Lilly (NYSE:LLY) over $1T after tirzepatide.
Pharma is a hits business that pays like an annuity.
The top 25% of drugs generate about 85% of revenues, per a16z, and the top 10 pharma companies draw roughly 50% of revenue from their top three assets. Merck (NYSE:MRK) drew 54% of 2025 revenue from Keytruda, per a16z, while Lilly drew 63% from its GLP portfolio. Patents last 20 years from filing, which leaves 10 to 14 years after launch, per a16z, and Dupixent shows the curve with nearly $18B in 2025 sales after a 2017 launch and U.S. patent expiry expected in 2031.
Lilly’s injectable GLP-1 portfolio did close to $17B in Q3 2026 alone, nearly matching Anthropic’s revenue that quarter, per a16z. Analysts expect Lilly’s GLP-1 portfolio to exceed $100B in annual sales by 2030, per a16z. Yet FDA approvals still run only 40 to 50 novel drugs per year, per a16z, with less than 5% of candidates reaching approval and a risk-adjusted present-value cost near $2B over 13 years.
That math forces R&D chiefs, medicinal chemists and clinical operations teams to change how they spend. AI-native biotech startups want target search, molecule ranking, protocol design, recruitment and FDA drafting done with models before wet-lab spend. Contract research organizations face the overflow, with a16z sizing the global CRO market at $90B today, split as $30B in discovery and preclinical plus $60B in clinical trials.
So will investors ever pay for a discovery engine? A discounted cash flow is a valuation that prices expected future cash from approved drugs. A16z says Big Pharma trades at 8 to 20 times forward earnings, or 3 to 7 times revenue, with little credit for early pipelines because Humira at AbbVie fell from $20B in 2022 to $4B in 2025 after loss of exclusivity. Scrutiny is growing around AI biology work, as WIRED reported Tabula Bioscience was also involved in research cited by Radical without disclosure in its announcement last month. Regulated steps like chronic toxicology studies still set a hard floor on speed, per a16z.
Watch whether AI-native biotech startups can replace patent-cliff revenue themselves instead of selling to Big Pharma. A16z launched The Biotech Ecosystem Fund with Eli Lilly to back that infrastructure bet.
