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Pharma Stock Roundup: Bristol-Myers, Merck Top Estimates, Merck Wins Key FDA Nod
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Third quarter earnings season is in full flow with several large-cap pharma companies like Lilly (LLY - Free Report) , Merck (MRK - Free Report) , Bristol-Myers (BMY - Free Report) , Novartis and others reporting results this week. While companies like Merck and Bristol-Myers surpassed expectations, others like Lilly fell short.
Merck’s Keytruda Gets Highly-Awaited FDA Nod for 1st Line Lung Cancer Setting: In addition to reporting strong third quarter results, Merck got a boost with the earlier-than-expected FDA approval of its anti-PD-1 therapy Keytruda for the first-line non-small cell lung cancer (NSCLC) setting. This is a very important milestone for Merck as the company looks set to enjoy a head-start in this setting.
Keytruda sales should improve sharply with the first-line NSCLC indication. Keytruda’s label was also updated to include KEYNOTE-010 data which means that patients expressing any level of PD-L1 are eligible for Keytruda in a second-line NSCLC setting. Merck is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AstraZeneca’s Durvalumab on Partial Clinical Hold: AstraZeneca’s (AZN - Free Report) durvalumab was placed on partial clinical hold by the FDA for head and neck squamous cell carcinoma (HNSCC). This means that new patients cannot be enrolled in studies evaluating only durvalumab or durvalumab in combination with tremelimumab or other medicines for HNSCC. The hold does not affect studies evaluating durvalumab for other types of cancer.
The FDA’s decision to place a partial clinical hold was based on AstraZeneca’s decision to pause enrolment of new HNSCC patients while a detailed analysis of adverse events related to bleeding observed in a couple of phase III studies was being conducted. The analysis has been submitted by the company to the agency.
Meanwhile, AstraZeneca reported positive data from a late-stage study evaluating Lynparza as maintenance treatment for women with BRCA-mutated metastatic ovarian cancer.
Allergan Announces Another Acquisition: Allergan’s acquisition spree continues with the company announcing its intention to acquire Motus Therapeutics, a wholly-owned subsidiary of Rhythm Holding Company. The announcement was made following the positive top-line results from a phase IIb study on relamorelin, Motus' ghrelin agonist, for the treatment of gastroparesis in patients with type I and type II diabetes.
With Allergan exercising its option to acquire Motus, the company will pay the exercise price of $200 million at closing to Rhythm Holding. Rhythm Holding will also be eligible to get a contingent payment on the first commercial sale of relamorelin. Allergan had earlier paid $47 million related to the option-to-acquire Motus and the relamorelin phase IIb study. The acquisition is expected to complete by year end.
Over the last five trading days, the NYSE ARCA Pharmaceutical Index declined 1.6% with AstraZeneca losing 7.9% while Bristol-Myers gained 3.2%. Over the last six months, Bristol-Myers declined 26% while Merck was up 8.8% (See the last pharma stock roundup here: Another Strong Quarter from J&J, Lilly Cancer Drug Approved).
What's Next in the Pharma World?
Companies like Pfizer (PFE - Free Report) and Allergan will be reporting earnings results in the coming days.
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Pharma Stock Roundup: Bristol-Myers, Merck Top Estimates, Merck Wins Key FDA Nod
Third quarter earnings season is in full flow with several large-cap pharma companies like Lilly (LLY - Free Report) , Merck (MRK - Free Report) , Bristol-Myers (BMY - Free Report) , Novartis and others reporting results this week. While companies like Merck and Bristol-Myers surpassed expectations, others like Lilly fell short.
Recap of the Week’s Most Important Stories
A Look at Earnings Results: Quite a few of the large-cap pharma companies posted better-than-expected third quarter results. While Glaxo (GSK - Free Report) surpassed earnings expectations (Read more: Glaxo Beats Q3 Earnings Estimates, Keeps 2016 View), Bayer topped earnings and revenue estimates and raised its outlook as well (Read more: Bayer Beats on Q3 Earnings, Lifts 2016 Guidance). Merck also topped estimates and raised its outlook (Read more: Merck Beats on Q3 Earnings & Revenues, Lifts View). Bristol-Myers also delivered a “beat and raise” quarter (Read more: Bristol-Myers Beats on Q3 Earnings, Ups 2016 View). Meanwhile, Lilly’s results fell short of expectations (Read more: Lilly Misses on Q3 Earnings, Sales; Animal Health Hurts) with results being impacted by Humalog and Animal Health.
Merck’s Keytruda Gets Highly-Awaited FDA Nod for 1st Line Lung Cancer Setting: In addition to reporting strong third quarter results, Merck got a boost with the earlier-than-expected FDA approval of its anti-PD-1 therapy Keytruda for the first-line non-small cell lung cancer (NSCLC) setting. This is a very important milestone for Merck as the company looks set to enjoy a head-start in this setting.
Keytruda sales should improve sharply with the first-line NSCLC indication. Keytruda’s label was also updated to include KEYNOTE-010 data which means that patients expressing any level of PD-L1 are eligible for Keytruda in a second-line NSCLC setting. Merck is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AstraZeneca’s Durvalumab on Partial Clinical Hold: AstraZeneca’s (AZN - Free Report) durvalumab was placed on partial clinical hold by the FDA for head and neck squamous cell carcinoma (HNSCC). This means that new patients cannot be enrolled in studies evaluating only durvalumab or durvalumab in combination with tremelimumab or other medicines for HNSCC. The hold does not affect studies evaluating durvalumab for other types of cancer.
The FDA’s decision to place a partial clinical hold was based on AstraZeneca’s decision to pause enrolment of new HNSCC patients while a detailed analysis of adverse events related to bleeding observed in a couple of phase III studies was being conducted. The analysis has been submitted by the company to the agency.
Meanwhile, AstraZeneca reported positive data from a late-stage study evaluating Lynparza as maintenance treatment for women with BRCA-mutated metastatic ovarian cancer.
Allergan Announces Another Acquisition: Allergan’s acquisition spree continues with the company announcing its intention to acquire Motus Therapeutics, a wholly-owned subsidiary of Rhythm Holding Company. The announcement was made following the positive top-line results from a phase IIb study on relamorelin, Motus' ghrelin agonist, for the treatment of gastroparesis in patients with type I and type II diabetes.
With Allergan exercising its option to acquire Motus, the company will pay the exercise price of $200 million at closing to Rhythm Holding. Rhythm Holding will also be eligible to get a contingent payment on the first commercial sale of relamorelin. Allergan had earlier paid $47 million related to the option-to-acquire Motus and the relamorelin phase IIb study. The acquisition is expected to complete by year end.
Performance
Large Cap Pharmaceuticals Industry Price Index
Large Cap Pharmaceuticals Industry Price Index
Over the last five trading days, the NYSE ARCA Pharmaceutical Index declined 1.6% with AstraZeneca losing 7.9% while Bristol-Myers gained 3.2%. Over the last six months, Bristol-Myers declined 26% while Merck was up 8.8% (See the last pharma stock roundup here: Another Strong Quarter from J&J, Lilly Cancer Drug Approved).
What's Next in the Pharma World?
Companies like Pfizer (PFE - Free Report) and Allergan will be reporting earnings results in the coming days.
Confidential: Zacks' Best Investment Ideas
Would you like to see a hand-picked "all-star" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand. Click for his selected trades right now >>