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This week, companies like Pfizer (PFE - Free Report) , Allergan and Teva (TEVA - Free Report) reported second quarter results. While Pfizer reported a mixed quarter, Allergan topped expectations. Teva, however, had a tough quarter. Meanwhile, Bristol-Myers (BMY - Free Report) announced immune-oncology (IO) focused deals including an acquisition.
Recap of the Week’s Most Important Stories
A Look at Q2 Earnings Results: Big companies like Pfizer, Allergan and Teva reported second quarter results this week. Pfizer surpassed earnings estimates but missed on revenues raising concerns about the company’s top-line growth prospects. While Prevnar and Enbrel sales declined during the quarter, Pfizer is facing two key loss of exclusivities (LOEs) in the U.S. -- Viagra later this year and Lyrica at the end of 2018 (Read more: Pfizer Surpasses Q2 Earnings Estimates, Misses Sales).
Teva’s shares fell 24% on a dismal quarter with the company missing on earnings and sales reflecting the performance of the U.S. generics business and the continued deterioration in Venezuela. The generics business was hit by accelerated price erosion and lower volume mainly due to customer consolidation, higher competition, and delayed new product launches. Teva lowered its outlook for the year and slashed its dividend as well. The company also expects to exit 45 markets across the globe by year end and will be cutting its headcount by about 7,000 since the closing of the Actavis Generics business deal. Teva has lost 34.5% of its value year to date versus the 7.6% decline of its industry.
J&J, AbbVie Drug Gets FDA Nod for cGVHD: Johnson & Johnson (JNJ - Free Report) and AbbVie’s BTK inhibitor Imbruvica gained FDA approval for its first non-cancer indication -- chronic graft versus host disease (cGVHD) in adults after failure of one or more systemic lines of therapy. This makes Imbruvica the first and only approved treatment for this patient population. This marks the sixth indication for Imbruvica in the U.S. J&J stock has gained 15.8% year to date, outperforming the 10.9% rally of the industry it belongs to.
Bristol-Myers in Acquisition Deal Worth Up to $2.3B: Bristol-Myers announced that it will be acquiring IFM Therapeutics, a venture-backed biotech company working on treatments that modulate novel targets in the innate immune system to treat cancer, autoimmunity and inflammatory disorders.
With this acquisition, Bristol-Myers will gain full rights to IFM’s preclinical STING (stimulator of interferon genes) and NLRP3 agonist programs that are focused on cancer. The STING agonist program includes a lead asset while the NLRP3 agonist program includes a potential first-in-class pipeline candidate.
This acquisition, scheduled to close in the third quarter, will strengthen Bristol-Myers’ immune-oncology (IO) pipeline. The deal will see Bristol-Myers shelling out $300 million upfront while additional payments of up to $1.01 billion will be made for each of the first products from the two programs on the achievement of certain milestones.
Additional milestone payments could be made for further products resulting from these programs.
Bristol-Myers signed another IO focused deal this week -- the company signed a clinical collaboration agreement with Clovis Oncology under which its immunotherapy Opdivo will be evaluated in combination with Clovis’ PARP inhibitor Rubraca in mid- and late-stage studies for different types of tumors.
Meanwhile, Opdivo’s label was expanded in the U.S. this week for the treatment of adult and pediatric (12 years and older) patients with microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) metastatic colorectal cancer (mCRC) that has progressed following treatment with a fluoropyrimidine, oxaliplatin, and irinotecan. Accelerated approval was granted on the basis of overall response rate (ORR) and duration of response.
However, we note that Merck’s Keytruda gained approval earlier this year for patients with MSI-H or dMMR in a wider patient population -- Merck’s label includes patients with solid tumors that have progressed following prior treatment and who have no satisfactory alternative treatment options as well as colorectal cancer patients whose disease has progressed following treatment with certain chemotherapy drugs.
J&J RA Drug Fails to Get FDA Advisory Panel Support: J&J’s investigational rheumatoid arthritis (RA) treatment, Plivensia (sirukumab), an IL-6 inhibitor, failed to get the support of the FDA’s Arthritis Advisory Committee on safety concerns. The company is looking to get Plivensia approved for the treatment of adult patients with moderately to severely active RA who have had an inadequate response or are intolerant to one or more disease modifying anti-rheumatic drugs (DMARDs). RA is a common, chronic, life-long, autoimmune disease that affects about 1.3 million people in the U.S. Although the FDA is not required to do so, it usually follows the advice of its advisory panels. Considering the safety concerns raised by the panel, the agency could well ask for additional information before granting approval.
Pfizer Drug Gets Advisory Panel Support: Pfizer’s supplemental new drug applications (sNDAs) for its JAK inhibitor, Xeljanz (5 mg twice daily) and Xeljanz XR (11 mg once daily), for the treatment of adult patients with active psoriatic arthritis (PsA), got the support of the FDA’s Arthritis Advisory Committee. The advisory panel voted 10 to 1 in favor of approving the proposed dose of Xeljanz for the PsA indication. A decision from the FDA should be out by Dec 2017. Xeljanz, currently approved for RA, brought in sales of $587 million in the first half of 2017.
Priority Review for AstraZeneca BTK Inhibitor: AstraZeneca’s (AZN - Free Report) investigational BTK inhibitor, acalabrutinib, was granted priority review by the FDA. The company is looking to get the drug approved for use in patients with relapsed/refractory mantle cell lymphoma (MCL) who have received at least one prior therapy. A response from the agency is expected in the first quarter of 2018. Acalabrutinib was also given Breakthrough Therapy Designation (BTD) for this indication.
AstraZeneca’s Imfinzi also got BTD this week for the treatment of patients with locally-advanced, unresectable non-small cell lung cancer (NSCLC) whose disease has not progressed following platinum-based chemoradiation therapy.
Positive Data on Lilly Migraine Drug: Lilly (LLY - Free Report) presented late-stage data on its investigational migraine drug, lasmiditan, saying that it met the primary endpoint as well as key secondary endpoints. The results were consistent with results presented from an earlier late-stage study. Lilly expects to file for FDA approval in the second half of 2018.
The NYSE ARCA Pharmaceutical Index declined 0.6% over the last four trading sessions. Among major stocks, Pfizer was up 1.8% while Lilly lost 1.4%. Over the last six months, J&J was up 18.9% while AstraZeneca gained 12.3% (See the last pharma stock roundup here: J&J, NVS' Q2 Earnings, Merck Drug Gets Tentative FDA Nod).
What's Next in the Pharma World?
Watch out for the usual pipeline and regulatory updates.
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Pharma Stock Roundup: Mixed 2Q Results from Pfizer, Bristol-Myers Announces IO Deals
This week, companies like Pfizer (PFE - Free Report) , Allergan and Teva (TEVA - Free Report) reported second quarter results. While Pfizer reported a mixed quarter, Allergan topped expectations. Teva, however, had a tough quarter. Meanwhile, Bristol-Myers (BMY - Free Report) announced immune-oncology (IO) focused deals including an acquisition.
Recap of the Week’s Most Important Stories
A Look at Q2 Earnings Results: Big companies like Pfizer, Allergan and Teva reported second quarter results this week. Pfizer surpassed earnings estimates but missed on revenues raising concerns about the company’s top-line growth prospects. While Prevnar and Enbrel sales declined during the quarter, Pfizer is facing two key loss of exclusivities (LOEs) in the U.S. -- Viagra later this year and Lyrica at the end of 2018 (Read more: Pfizer Surpasses Q2 Earnings Estimates, Misses Sales).
Meanwhile, Allergan topped both earnings and sales estimates and raised its outlook as well (Read more: Allergan Q2 Earnings & Sales Top, Restasis Sales Down).
Teva’s shares fell 24% on a dismal quarter with the company missing on earnings and sales reflecting the performance of the U.S. generics business and the continued deterioration in Venezuela. The generics business was hit by accelerated price erosion and lower volume mainly due to customer consolidation, higher competition, and delayed new product launches. Teva lowered its outlook for the year and slashed its dividend as well. The company also expects to exit 45 markets across the globe by year end and will be cutting its headcount by about 7,000 since the closing of the Actavis Generics business deal. Teva has lost 34.5% of its value year to date versus the 7.6% decline of its industry.
J&J, AbbVie Drug Gets FDA Nod for cGVHD: Johnson & Johnson (JNJ - Free Report) and AbbVie’s BTK inhibitor Imbruvica gained FDA approval for its first non-cancer indication -- chronic graft versus host disease (cGVHD) in adults after failure of one or more systemic lines of therapy. This makes Imbruvica the first and only approved treatment for this patient population. This marks the sixth indication for Imbruvica in the U.S. J&J stock has gained 15.8% year to date, outperforming the 10.9% rally of the industry it belongs to.
Bristol-Myers in Acquisition Deal Worth Up to $2.3B: Bristol-Myers announced that it will be acquiring IFM Therapeutics, a venture-backed biotech company working on treatments that modulate novel targets in the innate immune system to treat cancer, autoimmunity and inflammatory disorders.
With this acquisition, Bristol-Myers will gain full rights to IFM’s preclinical STING (stimulator of interferon genes) and NLRP3 agonist programs that are focused on cancer. The STING agonist program includes a lead asset while the NLRP3 agonist program includes a potential first-in-class pipeline candidate.
This acquisition, scheduled to close in the third quarter, will strengthen Bristol-Myers’ immune-oncology (IO) pipeline. The deal will see Bristol-Myers shelling out $300 million upfront while additional payments of up to $1.01 billion will be made for each of the first products from the two programs on the achievement of certain milestones.
Additional milestone payments could be made for further products resulting from these programs.
Bristol-Myers signed another IO focused deal this week -- the company signed a clinical collaboration agreement with Clovis Oncology under which its immunotherapy Opdivo will be evaluated in combination with Clovis’ PARP inhibitor Rubraca in mid- and late-stage studies for different types of tumors.
Meanwhile, Opdivo’s label was expanded in the U.S. this week for the treatment of adult and pediatric (12 years and older) patients with microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) metastatic colorectal cancer (mCRC) that has progressed following treatment with a fluoropyrimidine, oxaliplatin, and irinotecan. Accelerated approval was granted on the basis of overall response rate (ORR) and duration of response.
However, we note that Merck’s Keytruda gained approval earlier this year for patients with MSI-H or dMMR in a wider patient population -- Merck’s label includes patients with solid tumors that have progressed following prior treatment and who have no satisfactory alternative treatment options as well as colorectal cancer patients whose disease has progressed following treatment with certain chemotherapy drugs.
J&J RA Drug Fails to Get FDA Advisory Panel Support: J&J’s investigational rheumatoid arthritis (RA) treatment, Plivensia (sirukumab), an IL-6 inhibitor, failed to get the support of the FDA’s Arthritis Advisory Committee on safety concerns. The company is looking to get Plivensia approved for the treatment of adult patients with moderately to severely active RA who have had an inadequate response or are intolerant to one or more disease modifying anti-rheumatic drugs (DMARDs). RA is a common, chronic, life-long, autoimmune disease that affects about 1.3 million people in the U.S. Although the FDA is not required to do so, it usually follows the advice of its advisory panels. Considering the safety concerns raised by the panel, the agency could well ask for additional information before granting approval.
Pfizer Drug Gets Advisory Panel Support: Pfizer’s supplemental new drug applications (sNDAs) for its JAK inhibitor, Xeljanz (5 mg twice daily) and Xeljanz XR (11 mg once daily), for the treatment of adult patients with active psoriatic arthritis (PsA), got the support of the FDA’s Arthritis Advisory Committee. The advisory panel voted 10 to 1 in favor of approving the proposed dose of Xeljanz for the PsA indication. A decision from the FDA should be out by Dec 2017. Xeljanz, currently approved for RA, brought in sales of $587 million in the first half of 2017.
Priority Review for AstraZeneca BTK Inhibitor: AstraZeneca’s (AZN - Free Report) investigational BTK inhibitor, acalabrutinib, was granted priority review by the FDA. The company is looking to get the drug approved for use in patients with relapsed/refractory mantle cell lymphoma (MCL) who have received at least one prior therapy. A response from the agency is expected in the first quarter of 2018. Acalabrutinib was also given Breakthrough Therapy Designation (BTD) for this indication.
AstraZeneca’s Imfinzi also got BTD this week for the treatment of patients with locally-advanced, unresectable non-small cell lung cancer (NSCLC) whose disease has not progressed following platinum-based chemoradiation therapy.
Positive Data on Lilly Migraine Drug: Lilly (LLY - Free Report) presented late-stage data on its investigational migraine drug, lasmiditan, saying that it met the primary endpoint as well as key secondary endpoints. The results were consistent with results presented from an earlier late-stage study. Lilly expects to file for FDA approval in the second half of 2018.
Lilly is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance
Large Cap Pharmaceuticals Industry 5YR % Return
Large Cap Pharmaceuticals Industry 5YR % Return
The NYSE ARCA Pharmaceutical Index declined 0.6% over the last four trading sessions. Among major stocks, Pfizer was up 1.8% while Lilly lost 1.4%. Over the last six months, J&J was up 18.9% while AstraZeneca gained 12.3% (See the last pharma stock roundup here: J&J, NVS' Q2 Earnings, Merck Drug Gets Tentative FDA Nod).
What's Next in the Pharma World?
Watch out for the usual pipeline and regulatory updates.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>