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Pharma Stock Roundup: J&J's New '23 View After Kenvue Separation, Regulatory Updates
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This week, J&J (JNJ - Free Report) updated its financial guidance for 2023 after it completed the spin-out of its Consumer Health unit, Kenvue. The European Commission approved Merck’s (MRK - Free Report) blockbuster cancer drug Keytruda for the first-line treatment of certain types of patients with gastric cancer. AbbVie (ABBV - Free Report) filed applications in the United States and Europe seeking approval of its medicine, Skyrizi for a new indication, ulcerative colitis.
The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended marketing authorization for Pfizer (PFE - Free Report) and partner BioNTech’s Omicron XBB.1.5-adapted monovalent COVID-19 vaccine. Roche (RHHBY - Free Report) announced positive data from a phase III study evaluating its cancer drug Alecensa for people with ALK-positive early-stage lung cancer.
Recap of the Week’s Most Important Stories
J&J’s Updates 2023 Guidance After Final Kenvue Separation: J&J updated its financial guidance for 2023 after the final separation of its consumer health division, Kenvue. With the complete separation of the Consumer Health segment, J&J has become a two-sector company focused on the Pharmaceutical and MedTech fields. Kenvue will now operate as a separate and fully independent company.
This month, J&J made an exchange offer for shares of Kenvue that it owned to complete the separation. After completion of the exchange offer, J&J now has a 9.5% stake (approximately 180 million shares) in Kenvue’s common stock, which it may monetize in a tax-efficient manner in 2024.
J&J now expects revenues in the range of $83.2 billion-$84.0 billion compared with the earlier expectation of $98.8 billion to $99.8 billion. This new guidance excludes any revenues from the Consumer Health segment and now reflects sales from only the Pharmaceutical and MedTech units. Revenue growth is now expected in the range of 7%-8% versus the prior expectation of 6.5%-7.5%. The adjusted earnings per share guidance was lowered from a range of $10.70 -$10.80 to $10.00-$10.10. However, the earnings range implies growth in the range of 12%-13%, which is higher than the prior expectation of 5.5%-6.5%.
J&J submitted a supplemental new drug application (sNDA) to the FDA seeking full approval of Balversa for treating metastatic or unresectable urothelial carcinoma (UC). Balversa was approved by the FDA under the accelerated pathway in 2019 for FGFR-altered metastatic urothelial cancer. The latest sNDA is based on data from a cohort of the phase III THOR study, which was to be used as a confirmatory study to support continued approval of the drug in the UC indication. Data from this cohort of the THOR study showed that Balversa reduced the risk of death in patients by 36% versus chemotherapy.
J&J also filed a supplemental biologics license application (sBLA) to the FDA seeking approval of its drug Rybrevant in combination with chemotherapy for first-line treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) with EGFR exon 20 insertion mutations. The sBLA is based on data from the phase III PAPILLON study. The FDA had granted accelerated approval to Rybrevant in 2021 for patients with locally advanced or metastatic NSCLC with EGFR exon 20 insertion mutations whose disease progressed on or after platinum-based chemotherapy. PAPILLON is also a confirmatory study for this accelerated approval.
AbbVie Files Applications With FDA and EMA for Skyrizi for Ulcerative Colitis: AbbVie submitted regulatory applications to the FDA and EMA seeking approval of its drug Skyrizi (risankizumab) for moderately to severely active ulcerative colitis. Skyrizi is presently approved in the United States and Europe for Crohn's disease, psoriatic arthritis and psoriasis. The regulatory applications filed to the FDA and the EMA were based on data from two phase III studies, an induction study, INSPIRE, and a maintenance study, COMMAND. Data from these studies showed that Skyrizi, as an induction and maintenance treatment, achieved the primary endpoint of clinical remission (per Adapted Mayo Score) and key secondary endpoints
EU Approval for Merck’s Keytruda in First-Line Gastric Cancer: The European Commission approved the expanded use of Keytruda plus trastuzumab and chemotherapy as first-line treatment for HER2-positive advanced gastric or gastroesophageal junction adenocarcinoma in adults whose tumors express PD-L1 (Combined Positive Score [CPS] ≥1) in the European Union. The EU approval was based on positive progression-free data from the phase III KEYNOTE-811 study. Keytruda is already approved for similar use in the United States.
CHMP Nod for Pfizer/BioNTech’s Updated COVID Jab: The CHMP has given a positive opinion, recommending approval for Pfizer/BioNTech’s Omicron XBB.1.5-adapted monovalent COVID-19 vaccine. Pfizer and BioNTech expect a final decision from the European Commission soon. The companies are preparing to roll out the updated vaccine to applicable EU member states immediately after a decision from the EMA. The companies have commercially manufactured the updated COVID-19 vaccine (at risk) to ensure supply readiness for the upcoming fall and winter seasons when demand is likely to increase.
Roche’s Early-Stage Lung Cancer Study on Alecensa Meets Goal: Roche’s cancer drug Alecensa reduced the risk of disease recurrence or death as adjuvant therapy for patients with early-stage ALK-positive NSCLC in the phase ALINA study. The ALINA study met its primary endpoint by demonstrating a statistically significant and clinically meaningful improvement in disease-free survival compared with platinum-based chemotherapy at a prespecified interim analysis. However, at the time of this analysis, overall survival data were immature.
Alecensa is presently approved for ALK-positive advanced NSCLC. The latest data shows the potential of the drug to treat early-stage lung cancer disease as it reduced disease recurrence in the early setting.
The NYSE ARCA Pharmaceutical Index rose 0.07% in the last five trading sessions.
Image: Bigstock
Pharma Stock Roundup: J&J's New '23 View After Kenvue Separation, Regulatory Updates
This week, J&J (JNJ - Free Report) updated its financial guidance for 2023 after it completed the spin-out of its Consumer Health unit, Kenvue. The European Commission approved Merck’s (MRK - Free Report) blockbuster cancer drug Keytruda for the first-line treatment of certain types of patients with gastric cancer. AbbVie (ABBV - Free Report) filed applications in the United States and Europe seeking approval of its medicine, Skyrizi for a new indication, ulcerative colitis.
The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended marketing authorization for Pfizer (PFE - Free Report) and partner BioNTech’s Omicron XBB.1.5-adapted monovalent COVID-19 vaccine. Roche (RHHBY - Free Report) announced positive data from a phase III study evaluating its cancer drug Alecensa for people with ALK-positive early-stage lung cancer.
Recap of the Week’s Most Important Stories
J&J’s Updates 2023 Guidance After Final Kenvue Separation: J&J updated its financial guidance for 2023 after the final separation of its consumer health division, Kenvue. With the complete separation of the Consumer Health segment, J&J has become a two-sector company focused on the Pharmaceutical and MedTech fields. Kenvue will now operate as a separate and fully independent company.
This month, J&J made an exchange offer for shares of Kenvue that it owned to complete the separation. After completion of the exchange offer, J&J now has a 9.5% stake (approximately 180 million shares) in Kenvue’s common stock, which it may monetize in a tax-efficient manner in 2024.
J&J now expects revenues in the range of $83.2 billion-$84.0 billion compared with the earlier expectation of $98.8 billion to $99.8 billion. This new guidance excludes any revenues from the Consumer Health segment and now reflects sales from only the Pharmaceutical and MedTech units. Revenue growth is now expected in the range of 7%-8% versus the prior expectation of 6.5%-7.5%. The adjusted earnings per share guidance was lowered from a range of $10.70 -$10.80 to $10.00-$10.10. However, the earnings range implies growth in the range of 12%-13%, which is higher than the prior expectation of 5.5%-6.5%.
J&J submitted a supplemental new drug application (sNDA) to the FDA seeking full approval of Balversa for treating metastatic or unresectable urothelial carcinoma (UC). Balversa was approved by the FDA under the accelerated pathway in 2019 for FGFR-altered metastatic urothelial cancer. The latest sNDA is based on data from a cohort of the phase III THOR study, which was to be used as a confirmatory study to support continued approval of the drug in the UC indication. Data from this cohort of the THOR study showed that Balversa reduced the risk of death in patients by 36% versus chemotherapy.
J&J also filed a supplemental biologics license application (sBLA) to the FDA seeking approval of its drug Rybrevant in combination with chemotherapy for first-line treatment of patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) with EGFR exon 20 insertion mutations. The sBLA is based on data from the phase III PAPILLON study. The FDA had granted accelerated approval to Rybrevant in 2021 for patients with locally advanced or metastatic NSCLC with EGFR exon 20 insertion mutations whose disease progressed on or after platinum-based chemotherapy. PAPILLON is also a confirmatory study for this accelerated approval.
AbbVie Files Applications With FDA and EMA for Skyrizi for Ulcerative Colitis: AbbVie submitted regulatory applications to the FDA and EMA seeking approval of its drug Skyrizi (risankizumab) for moderately to severely active ulcerative colitis. Skyrizi is presently approved in the United States and Europe for Crohn's disease, psoriatic arthritis and psoriasis. The regulatory applications filed to the FDA and the EMA were based on data from two phase III studies, an induction study, INSPIRE, and a maintenance study, COMMAND. Data from these studies showed that Skyrizi, as an induction and maintenance treatment, achieved the primary endpoint of clinical remission (per Adapted Mayo Score) and key secondary endpoints
EU Approval for Merck’s Keytruda in First-Line Gastric Cancer: The European Commission approved the expanded use of Keytruda plus trastuzumab and chemotherapy as first-line treatment for HER2-positive advanced gastric or gastroesophageal junction adenocarcinoma in adults whose tumors express PD-L1 (Combined Positive Score [CPS] ≥1) in the European Union. The EU approval was based on positive progression-free data from the phase III KEYNOTE-811 study. Keytruda is already approved for similar use in the United States.
CHMP Nod for Pfizer/BioNTech’s Updated COVID Jab: The CHMP has given a positive opinion, recommending approval for Pfizer/BioNTech’s Omicron XBB.1.5-adapted monovalent COVID-19 vaccine. Pfizer and BioNTech expect a final decision from the European Commission soon. The companies are preparing to roll out the updated vaccine to applicable EU member states immediately after a decision from the EMA. The companies have commercially manufactured the updated COVID-19 vaccine (at risk) to ensure supply readiness for the upcoming fall and winter seasons when demand is likely to increase.
Roche’s Early-Stage Lung Cancer Study on Alecensa Meets Goal: Roche’s cancer drug Alecensa reduced the risk of disease recurrence or death as adjuvant therapy for patients with early-stage ALK-positive NSCLC in the phase ALINA study. The ALINA study met its primary endpoint by demonstrating a statistically significant and clinically meaningful improvement in disease-free survival compared with platinum-based chemotherapy at a prespecified interim analysis. However, at the time of this analysis, overall survival data were immature.
Alecensa is presently approved for ALK-positive advanced NSCLC. The latest data shows the potential of the drug to treat early-stage lung cancer disease as it reduced disease recurrence in the early setting.
The NYSE ARCA Pharmaceutical Index rose 0.07% in the last five trading sessions.
Large Cap Pharmaceuticals Industry 5YR % Return
Large Cap Pharmaceuticals Industry 5YR % Return
Here’s how the eight major stocks performed in the last five trading sessions.
Image Source: Zacks Investment Research
In the last five trading sessions, Lilly rose the most (up 1.1%), while Pfizer declined the most (2.2%).
In the past six months, Lilly has risen the most (75.9%), while Pfizer has declined the most (12.9%).
(See the last pharma stock roundup here: PFE Gets Nod for RSV Vaccine, J&J Finalizes Kenvue Separation)
What's Next in the Pharma World?
Watch out for regular pipeline and regulatory updates next week.