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Biotech Stock Roundup: BIIB, GSK's Q2 Earnings, KOD Faces Setback & More
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It was a busy week for the biotech sector, with a focus on earnings and important regulatory and pipeline updates. Among these, Biogen’s (BIIB - Free Report) second-quarter results grabbed the spotlight as the biotech major announced a restructuring program.
Recap of the Week’s Most Important Stories:
Biogen’s Q2 Earnings: Biogen reported better-than-expected second-quarter 2023 results as earnings and sales both beat estimates. Adjusted earnings per share of $4.02 easily beat the Zacks Consensus Estimate of $3.77 but declined 23% year over year due to lower revenues. Sales came in at $2.46 billion and beat the Zacks Consensus Estimate of $2.38 billion. However, sales too were down 5% on a reported basis (down 3% on a constant-currency basis) from the year-ago quarter, hurt by lower sales of multiple sclerosis (MS) drugs like Tecfidera and Tysabri.
The company, however, maintained its previously issued earnings and sales guidance for 2023. Total revenues are expected to decline at a mid-single-digit percentage in 2023 from the 2022 level. Adjusted earnings are expected in the range of $15.00 to $16.00 per share. Concurrently, Biogen announced a new restructuring program, which is likely to result in a headcount reduction of approximately 1,000 employees. The program is expected to generate roughly $1 billion in gross cost savings. Out of these savings, around $300 million are expected to be re-invested in new products and R&D activities, which should further save costs of $700 million by 2025.
GSK’s Q2 Earnings, Other Updates: GSK plc (GSK - Free Report) reported strong second-quarter 2023 results. Adjusted earnings of 97 cents per American depositary share topped the Zacks Consensus Estimate of 85 cents. Adjusted earnings rose 12% year over year on a reported basis and 16% at a constant exchange rate. Revenues increased 4% on a reported basis to $8.9 billion (£7.18 billion), beating the Zacks Consensus Estimate of $8.49 billion on the back of increasing HIV and Vaccine sales. GSK also raised its outlook for 2023. The company now expects sales to increase 8% to 10% for 2023 from the previous guidance of 6% to 8%.
Earlier, GSK announced that the European Medicines Agency's Committee for Medicinal Products for Human Use recommended marketing authorization for cabotegravir long-acting (LA) injectable and tablets for HIV prevention.
Pipeline Updates From Gilead: Gilead Sciences, Inc. (GILD - Free Report) presented new encouraging data reinforcing the efficacy, safety and tolerability profile of HIV treatment lenacapavir, including patient-reported outcomes (PRO) from the phase II/III CAPELLA study. The participants (n=64/72) reported favorable scores at week 52 and with relative consistency over the time period. Separately, data from the CAPELLA and the mid-stage CALIBRATE studies showed weekly oral lenacapavir, in combination with an optimized background regimen (OBR), led to high rates of virologic suppression and high, efficacious concentrations of lenacapavir in the blood in study participants even when the administration of subcutaneous lenacapavir was interrupted.
Earlier, the company announced that it is discontinuing the phase III ENHANCE study, a trial investigating the potential of magrolimab as a treatment for higher-risk myelodysplastic syndromes (MDS). The study evaluated the combination of magrolimab and azacitidine as a first-line treatment for higher-risk myelodysplastic syndromes (HR-MDS). Magrolimab is a novel immunotherapy developed in several hematologic cancers and solid tumor malignancies. The study enrolled more than 500 patients who were randomized to receive magrolimab in combination with azacitidine or azacitidine monotherapy.
The decision to discontinue the ENHANCE study was based on a planned analysis that indicated futility in achieving the study's primary endpoints, which were focused on complete response and overall survival. Secondary endpoints included duration of response, transfusion independence, progression-free survival and time to transformation to acute myeloid leukemia, among others. While the safety data were consistent with the known profile of magrolimab and typical adverse events seen in this patient population, the study was discontinued due to futility based on a planned analysis. Hence, Gilead will now focus on ongoing trials of magrolimab in solid tumors and two pivotal studies — ENHANCE-2 in acute myeloid leukemia (AML) with TP53 mutations and ENHANCE-3 in first-line, unfit AML.
Setback for Kodiak Sciences: Shares of Kodiak Sciences (KOD - Free Report) plunged after it announced that it will discontinue the development of the ophthalmology treatment tarcocimab. The decision was based on data from GLEAM and GLIMMER studies, which are identically designed, randomized, double-masked, active comparator-controlled studies evaluating the efficacy, durability and safety of tarcocimab tedromer in 460 and 457 treatment-naïve subjects with DME, respectively.
Results showed that the studies did not meet their primary efficacy endpoints of showing non-inferior visual acuity gains for tarcocimab dosed every eight to 24 weeks after three monthly loading doses compared to the leading drug Eylea (aflibercept) given every eight weeks after five monthly loading doses. Further, an unexpected increase in cataracts was observed over time in the tarcocimab arms of both GLEAM and GLIMMER. Kodiak's initial evaluation suggests that this contributed meaningfully to the failure of each study.
Nevertheless, the other study, DAYLIGHT, evaluating the efficacy and safety of a high-intensity dosing regimen of tarcocimab tedromer in 557 treatment-naïve subjects with wet AMD met the primary endpoint of non-inferior visual acuity gains for tarcocimab dosed monthly compared to aflibercept dosed every eight weeks following three monthly loading doses. The failure puts a question mark on Kodiak’s journey ahead.
Performance
The Nasdaq Biotechnology Index has lost 0.95% in the past five trading sessions. Among the biotech giants, Incyte has gained 3.42% during the period. Over the past six months, shares of MRNA have lost 36.88%. (See the last biotech stock roundup here: Biotech Stock Roundup: BBIO, ARGX Soar on Study Results, APLS Down on Safety Issues).
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What's Next in Biotech?
Stay tuned for more earnings and pipeline updates.
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Biotech Stock Roundup: BIIB, GSK's Q2 Earnings, KOD Faces Setback & More
It was a busy week for the biotech sector, with a focus on earnings and important regulatory and pipeline updates. Among these, Biogen’s (BIIB - Free Report) second-quarter results grabbed the spotlight as the biotech major announced a restructuring program.
Recap of the Week’s Most Important Stories:
Biogen’s Q2 Earnings: Biogen reported better-than-expected second-quarter 2023 results as earnings and sales both beat estimates. Adjusted earnings per share of $4.02 easily beat the Zacks Consensus Estimate of $3.77 but declined 23% year over year due to lower revenues. Sales came in at $2.46 billion and beat the Zacks Consensus Estimate of $2.38 billion. However, sales too were down 5% on a reported basis (down 3% on a constant-currency basis) from the year-ago quarter, hurt by lower sales of multiple sclerosis (MS) drugs like Tecfidera and Tysabri.
The company, however, maintained its previously issued earnings and sales guidance for 2023. Total revenues are expected to decline at a mid-single-digit percentage in 2023 from the 2022 level. Adjusted earnings are expected in the range of $15.00 to $16.00 per share. Concurrently, Biogen announced a new restructuring program, which is likely to result in a headcount reduction of approximately 1,000 employees. The program is expected to generate roughly $1 billion in gross cost savings. Out of these savings, around $300 million are expected to be re-invested in new products and R&D activities, which should further save costs of $700 million by 2025.
GSK’s Q2 Earnings, Other Updates: GSK plc (GSK - Free Report) reported strong second-quarter 2023 results. Adjusted earnings of 97 cents per American depositary share topped the Zacks Consensus Estimate of 85 cents. Adjusted earnings rose 12% year over year on a reported basis and 16% at a constant exchange rate. Revenues increased 4% on a reported basis to $8.9 billion (£7.18 billion), beating the Zacks Consensus Estimate of $8.49 billion on the back of increasing HIV and Vaccine sales. GSK also raised its outlook for 2023. The company now expects sales to increase 8% to 10% for 2023 from the previous guidance of 6% to 8%.
Earlier, GSK announced that the European Medicines Agency's Committee for Medicinal Products for Human Use recommended marketing authorization for cabotegravir long-acting (LA) injectable and tablets for HIV prevention.
GSK currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pipeline Updates From Gilead: Gilead Sciences, Inc. (GILD - Free Report) presented new encouraging data reinforcing the efficacy, safety and tolerability profile of HIV treatment lenacapavir, including patient-reported outcomes (PRO) from the phase II/III CAPELLA study. The participants (n=64/72) reported favorable scores at week 52 and with relative consistency over the time period. Separately, data from the CAPELLA and the mid-stage CALIBRATE studies showed weekly oral lenacapavir, in combination with an optimized background regimen (OBR), led to high rates of virologic suppression and high, efficacious concentrations of lenacapavir in the blood in study participants even when the administration of subcutaneous lenacapavir was interrupted.
Earlier, the company announced that it is discontinuing the phase III ENHANCE study, a trial investigating the potential of magrolimab as a treatment for higher-risk myelodysplastic syndromes (MDS). The study evaluated the combination of magrolimab and azacitidine as a first-line treatment for higher-risk myelodysplastic syndromes (HR-MDS). Magrolimab is a novel immunotherapy developed in several hematologic cancers and solid tumor malignancies. The study enrolled more than 500 patients who were randomized to receive magrolimab in combination with azacitidine or azacitidine monotherapy.
The decision to discontinue the ENHANCE study was based on a planned analysis that indicated futility in achieving the study's primary endpoints, which were focused on complete response and overall survival. Secondary endpoints included duration of response, transfusion independence, progression-free survival and time to transformation to acute myeloid leukemia, among others. While the safety data were consistent with the known profile of magrolimab and typical adverse events seen in this patient population, the study was discontinued due to futility based on a planned analysis. Hence, Gilead will now focus on ongoing trials of magrolimab in solid tumors and two pivotal studies — ENHANCE-2 in acute myeloid leukemia (AML) with TP53 mutations and ENHANCE-3 in first-line, unfit AML.
Setback for Kodiak Sciences: Shares of Kodiak Sciences (KOD - Free Report) plunged after it announced that it will discontinue the development of the ophthalmology treatment tarcocimab. The decision was based on data from GLEAM and GLIMMER studies, which are identically designed, randomized, double-masked, active comparator-controlled studies evaluating the efficacy, durability and safety of tarcocimab tedromer in 460 and 457 treatment-naïve subjects with DME, respectively.
Results showed that the studies did not meet their primary efficacy endpoints of showing non-inferior visual acuity gains for tarcocimab dosed every eight to 24 weeks after three monthly loading doses compared to the leading drug Eylea (aflibercept) given every eight weeks after five monthly loading doses. Further, an unexpected increase in cataracts was observed over time in the tarcocimab arms of both GLEAM and GLIMMER. Kodiak's initial evaluation suggests that this contributed meaningfully to the failure of each study.
Nevertheless, the other study, DAYLIGHT, evaluating the efficacy and safety of a high-intensity dosing regimen of tarcocimab tedromer in 557 treatment-naïve subjects with wet AMD met the primary endpoint of non-inferior visual acuity gains for tarcocimab dosed monthly compared to aflibercept dosed every eight weeks following three monthly loading doses. The failure puts a question mark on Kodiak’s journey ahead.
Performance
The Nasdaq Biotechnology Index has lost 0.95% in the past five trading sessions. Among the biotech giants, Incyte has gained 3.42% during the period. Over the past six months, shares of MRNA have lost 36.88%. (See the last biotech stock roundup here: Biotech Stock Roundup: BBIO, ARGX Soar on Study Results, APLS Down on Safety Issues).
Image Source: Zacks Investment Research
What's Next in Biotech?
Stay tuned for more earnings and pipeline updates.