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The fourth-quarter earnings season entered its last lap this week, with Eli Lilly (LLY - Free Report) and AstraZeneca (AZN - Free Report) announcing their fourth-quarter and full-year 2023 results. Novo Nordisk (NVO - Free Report) , Merck (MRK - Free Report) and Novartis (NVS - Free Report) made M&A announcements.
Recap of the Week’s Most Important Stories
Lilly & AstraZeneca Announce Q4 Earnings: Lilly’s fourth-quarter results were better than expected as it beat estimates for earnings as well as sales. The company witnessed strong sales growth of Mounjaro, Verzenio, Jardiance and Taltz, which made up for the decline in the sales of Trulicity in the quarter.
Total revenues rose 28% year over year, driven by exceptionally strong demand for Lilly’s FDA-approved tirzepatide medicines, diabetes drug Mounjaro and the newly launched weight loss medicine, Zepbound. Mounjaro recorded sales of $2.21 billion during the quarter, much higher than $1.41 billion in the previous quarter. Zepbound, which was approved in November 2023 and launched in December, recorded sales of $175.8 million in the fourth quarter.
Lilly also issued an upbeat guidance for 2024 despite the expectation of continued supply constraints for incretin-based products like Trulicity and Mounjaro this year. The company expects that demand for these products will outpace supply in 2024, even though it is investing in manufacturing capacity to increase the supply.
AstraZeneca’s fourth-quarter results were rather weak, as it missed estimates for both earnings and sales. Earnings rose 7% at constant exchange rates (CER), while revenues rose 8%. Sales of Tagrisso rose 6%, while those of Imfinzi were up 52%. Farxiga sales rose 35% and Lynparza product revenues increased 8% year over year. However, revenues of all these key drugs missed expectations. Price reductions for some drugs in emerging markets hurt the top line in the quarter.
However, the company’s sales and earnings growth expectations for 2024 were quite encouraging. AstraZeneca expects both total revenue and earnings to increase at a low double-digit to low teens percentage in 2024 at CER.
Novo Nordisk to Buy Three Catalent Manufacturing Sites: Novo Nordisk said it is acquiring three fill-finish sites from its subsidiary, Novo Holdings A/S, in connection with the latter’s proposed acquisition of Catalent through a merger. Catalent is a New Jersey-based global contract development and manufacturing organization (CDMO). Novo Nordisk will acquire the three manufacturing sites located in Anagni (Italy), Brussels (Belgium) and Bloomington (Indiana, United States) for an upfront payment of $11 billion.
The acquisition of Catalent’s three manufacturing sites is expected to gradually increase Novo Nordisk's filling capacity from 2026 for diabetes and obesity medicines, which are seeing huge demand.
Novartis to Buy MorphoSys AG: Novartis announced an agreement to acquire Germany’s cancer biotech MorphoSys AG for 68 euros per share or an aggregate of EUR 2.7 billion in cash. The acquisition will strengthen Novartis’ oncology pipeline by adding MorphoSys AG’s late-stage pipeline candidate, pelabresib, a BET inhibitor for myelofibrosis (MF), a rare blood cancer. Recent data from a phase III study showed that pelabresib in combination with ruxolitinib met its primary endpoint of spleen volume reduction in JAK inhibitor-naive MF patients. The acquisition will also add MorphoSys AG’s early-stage candidate, tulmimetostat, a dual inhibitor of EZH2 and EZH1 for solid tumors or lymphomas. The transaction is approved by the board of directors of both companies and is expected to close in the first half of 2024.
Merck to Buy Elanco’s Aqua Unit for $1.3B: Merck announced a definitive agreement to acquire Elanco Health’s aqua business for $1.3 billion in cash. Elanco’s aqua business comprises medicines and vaccines, nutritionals and supplements for aquatic species, two manufacturing facilities in Canada and Vietnam, as well as a research facility in Chile. The acquisition of Elanco’s aqua business is a strategic fit for Merck Animal Health’s broad portfolio of veterinary medicines, vaccines and technology solutions. The acquisition is expected to close in mid-year 2024.
The NYSE ARCA Pharmaceutical Index rose 2.76% in the last five trading sessions.
Image: Bigstock
Pharma Stock Roundup: AZN & LLY's Q4 Earnings, NVO, NVS & MRK's M&A Deals
The fourth-quarter earnings season entered its last lap this week, with Eli Lilly (LLY - Free Report) and AstraZeneca (AZN - Free Report) announcing their fourth-quarter and full-year 2023 results. Novo Nordisk (NVO - Free Report) , Merck (MRK - Free Report) and Novartis (NVS - Free Report) made M&A announcements.
Recap of the Week’s Most Important Stories
Lilly & AstraZeneca Announce Q4 Earnings: Lilly’s fourth-quarter results were better than expected as it beat estimates for earnings as well as sales. The company witnessed strong sales growth of Mounjaro, Verzenio, Jardiance and Taltz, which made up for the decline in the sales of Trulicity in the quarter.
Total revenues rose 28% year over year, driven by exceptionally strong demand for Lilly’s FDA-approved tirzepatide medicines, diabetes drug Mounjaro and the newly launched weight loss medicine, Zepbound. Mounjaro recorded sales of $2.21 billion during the quarter, much higher than $1.41 billion in the previous quarter. Zepbound, which was approved in November 2023 and launched in December, recorded sales of $175.8 million in the fourth quarter.
Lilly also issued an upbeat guidance for 2024 despite the expectation of continued supply constraints for incretin-based products like Trulicity and Mounjaro this year. The company expects that demand for these products will outpace supply in 2024, even though it is investing in manufacturing capacity to increase the supply.
AstraZeneca’s fourth-quarter results were rather weak, as it missed estimates for both earnings and sales. Earnings rose 7% at constant exchange rates (CER), while revenues rose 8%. Sales of Tagrisso rose 6%, while those of Imfinzi were up 52%. Farxiga sales rose 35% and Lynparza product revenues increased 8% year over year. However, revenues of all these key drugs missed expectations. Price reductions for some drugs in emerging markets hurt the top line in the quarter.
However, the company’s sales and earnings growth expectations for 2024 were quite encouraging. AstraZeneca expects both total revenue and earnings to increase at a low double-digit to low teens percentage in 2024 at CER.
Novo Nordisk to Buy Three Catalent Manufacturing Sites: Novo Nordisk said it is acquiring three fill-finish sites from its subsidiary, Novo Holdings A/S, in connection with the latter’s proposed acquisition of Catalent through a merger. Catalent is a New Jersey-based global contract development and manufacturing organization (CDMO). Novo Nordisk will acquire the three manufacturing sites located in Anagni (Italy), Brussels (Belgium) and Bloomington (Indiana, United States) for an upfront payment of $11 billion.
The acquisition of Catalent’s three manufacturing sites is expected to gradually increase Novo Nordisk's filling capacity from 2026 for diabetes and obesity medicines, which are seeing huge demand.
Novartis to Buy MorphoSys AG: Novartis announced an agreement to acquire Germany’s cancer biotech MorphoSys AG for 68 euros per share or an aggregate of EUR 2.7 billion in cash. The acquisition will strengthen Novartis’ oncology pipeline by adding MorphoSys AG’s late-stage pipeline candidate, pelabresib, a BET inhibitor for myelofibrosis (MF), a rare blood cancer. Recent data from a phase III study showed that pelabresib in combination with ruxolitinib met its primary endpoint of spleen volume reduction in JAK inhibitor-naive MF patients. The acquisition will also add MorphoSys AG’s early-stage candidate, tulmimetostat, a dual inhibitor of EZH2 and EZH1 for solid tumors or lymphomas. The transaction is approved by the board of directors of both companies and is expected to close in the first half of 2024.
Merck to Buy Elanco’s Aqua Unit for $1.3B: Merck announced a definitive agreement to acquire Elanco Health’s aqua business for $1.3 billion in cash. Elanco’s aqua business comprises medicines and vaccines, nutritionals and supplements for aquatic species, two manufacturing facilities in Canada and Vietnam, as well as a research facility in Chile. The acquisition of Elanco’s aqua business is a strategic fit for Merck Animal Health’s broad portfolio of veterinary medicines, vaccines and technology solutions. The acquisition is expected to close in mid-year 2024.
The NYSE ARCA Pharmaceutical Index rose 2.76% 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 (11.4%), while AstraZeneca declined the most (5.0%).
In the past six months, Lilly has risen the most (41.2%), while Pfizer has declined the most (22.8%).
(See the last pharma stock roundup here: PFE, MRK, NVO & SNY’s Q4 Earnings, FDA Updates)
What's Next in the Pharma World?
Watch for regular pipeline and regulatory updates next week.