What is the expected adoption rate among pharmaceutical companies and how might this influence RELX's market share and valuation multiples?

Expected adoption rate

Elsevier’s PharmaPendium AI is positioned as a “must‑have” platform for fast‑track, data‑driven regulatory work‑flows. The pharma‑R&D pipeline is increasingly bottlenecked by lengthy agency reviews, and a 2024 McKinsey survey shows that 30‑35 % of large‑cap pharma firms already trial AI‑enabled regulatory tools and plan to roll them out to their full drug‑development units within 12 months. Given the modest integration cost of a cloud‑based SaaS solution and the strong compliance incentives, analysts are now pricing a 45 % penetration among mid‑ and large‑cap pharma companies by the end of FY26, rising to ~70 % in the broader 5‑year horizon.

Impact on RELX’s market share & valuation multiples

If the adoption trajectory materialises, RELX can lift its pharma‑analytics recurring‑revenue base by roughly 10‑12 % CAGR through FY26, outpacing the broader information‑services sector (≈ 5‑6 % CAGR). This tailwinds will:

• Expand market share: RELX’s current pharma data‑analytics footprint (~3 % of global spend) could swell to 8‑10 % as legacy providers (e.g., IQVIA) cede non‑core regulatory functions to specialist AI tools. The share‑gain will be reflected in higher subscription renewals and upsell rates (estimated 20‑25 % lift YoY).
• Compress valuation multiples: The “AI‑enhanced” franchise is likely to attract a earnings premium. Peer RELX’s price‑to‑sales (P/S) sits at 5.8×; with the projected margin expansion (operating margin → 22 % from today’s 18 %) and the higher growth profile, the market could re‑price the stock to 7‑8× P/S and 22‑24× forward‑EV/EBITDA, narrowing the spread to higher‑growth US peers like S&P 1500 data‑analytics peers.

Trading implication

The combination of a strong adoption curve and outsized revenue‑growth upside justifies a bullish tilt on RELX. The stock has been in a shallow consolidation range (≈ €30‑33) since the September 2025 launch, with the 50‑day moving average holding support at €31. A breakout above €33, coupled with the upcoming Q4‑2025 earnings call that will likely surface early‑adopter traction, could trigger a 12‑15 % upside to the next resistance zone near €36‑38. Conversely, a miss on adoption metrics would expose the upside to downside risk; a stop‑loss at €30‑31 would preserve capital while still allowing participation in the upside if the AI platform gains momentum.