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4 Large Cap Pharma Stocks in Focus on Robust Cancer Pipeline

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Cancer research is one space, which investors interested in the pharma/biotech sector keenly follow. Cancer is second only to heart disease when it comes to claiming lives.

The traditional cancer treatments include surgery, radiation and chemotherapy. However, targeted therapy, immunotherapy, gene therapy, photodynamic therapy (PDT) and other new novel therapies are slowly making their way into clinics to improve, supplement or replace traditional cancer treatments. Advances in new treatments have attracted investors’ attention and made cancer a hot investing area lately.

According to a report by the American Cancer Society, more than 1.7 million new cancer cases are expected to be diagnosed in 2018, which creates significant need for effective cancer medication. Allied Market Research estimates the global cancer drugs market to be more than $111 billion by 2020.

It goes without saying that all big pharma companies are gearing up to develop and bring innovative cancer treatments to market as well as expand the labels of their marketed oncology drugs. These pharma/biotech giants have significant financial resources at their disposal and have even collaborated to pool their resources and technology.

 

 

Here we discuss four pharma giants, which possess the industry’s strongest oncology pipeline portfolios.

AstraZeneca (AZN - Free Report)

AstraZeneca is working on strengthening its oncology product portfolio and has several candidates in its pipeline. Oncology sales now comprise more than 25% of total product sales for AstraZeneca and rose 37% in the first half of 2018.

While sales of most of its legacy cancer medicines, Faslodex, Zoladex, Arimdex and others are declining, its new cancer medications like Lynparza and Tagrosso are generating strong sales. The United Kingdom based drug giant’s target is to launch at least six new oncology medicines between 2014 and 2020, with Lynparza, Tagrisso, Imfinzi and Calquence already in the market.

An interesting candidate in the company’s immuno-oncology pipeline is Imfinzi (durvalumab) being evaluated for multiple cancers, either alone or in combination with other regimens. Imfinzi is presently marketed in the United States for second line advanced bladder and early stage lung cancer (NSCLC). Other phase III oncology candidates in AstraZeneca’s pipeline include moxetumomab pasudotox (leukemia.), selumetinib (neurofibromatosis type 1) and savolitinib (kidney cancer).

Lynparza, presently marketed in partnership with Merck (MRK - Free Report) for advanced ovarian cancer and breast cancer, is also in different studies for a range of tumor types including prostate and pancreatic cancers as well as earlier-line settings for ovarian cancer.

Tagrisso is also being evaluated in earlier-line settings for lung cancer. AstraZeneca gained approval for Tagrisso in first-line EGFR-mutated NSCLC in the United States in April and in the EU in June.  The label expansion can drive sales of this important cancer drug higher in the future quarters.

AstraZeneca carries a Zacks Rank #3 (Hold). So far this year, AstraZeneca’s shares have moved up 12.1%, comparing favorably to a 5.4% increase for the industry.

 

 

Pfizer (PFE - Free Report)

Pfizer’s newest immunotherapy, Bavencio, is being considered a significant top-line driver for this New York-based pharma giant.

Bavencio is already approved in metastatic Merkel cell carcinoma in the United States, Europe and Japan. It has also received accelerated approval for second-line treatment of locally advanced or metastatic urothelial carcinoma in the United States. Pfizer is focusing on continuously growing and expanding Bavencio into new indications and markets globally.

Two leukemia treatments — Besponsa for relapsed/refractory acute lymphoblastic leukemia (ALL) and Mylotarg for newly diagnosed CD33-positive acute myeloid leukemia (AML) — were approved in the United States in 2017 and have started adding to sales.

Importantly, Pfizer has four potential medicines under FDA’s priority review – dacomitinib, glasdegib, lorlatinib and talazoparib. Decisions on all these medicines are expected later this year. Approvals for these medicines can further strengthen Pfizer’s oncology franchise.

Meanwhile, Pfizer is also working on expanding the label of its key breast cancer drug Ibrance and prostate cancer drug, Xtandi. In July, Pfizer gained European approval for Trazimera, its biosimilar version of Roche’s (RHHBY - Free Report) cancer drug, Herceptin. This is Pfizer’s first approved oncology biosimilar. The biosimilar is yet to gain approval in the United States and a regulatory application is under review.

Pfizer also carries a Zacks Rank #3 (Hold). So far this year, Pfizer’s shares have moved up 14.5%.

 

 

AbbVie (ABBV - Free Report)

AbbVie believes that oncology will be its major growth driver over the next 10 years. Its key cancer drug and also what it calls a “pipeline in a molecule” is Imbruvica, currently approved for nine indications across six different cancer types. Imbruvica has multi-billion dollar potential. Several studies on Imbruvica are ongoing to evaluate the drug alone or in combination in different patient segments. AbbVie expects Imbruvica peak sales of more than $7 billion and revenues of about $5 billion in 2020.

With the 2016 acquisition of drugmaker, Stemcentrx, AbbVie added Rova-T to its portfolio, which is currently in registrational phase III studies for first and second-line small cell lung cancer (SCLC). A phase I, eight-arm "basket study" on Rova-T in neuroendocrine tumors is also ongoing.

AbbVie is also studying another key cancer drug, Venclyxto/Venclexta to expand the label to address the broader relapsed/refractory CLL patient population, expand into earlier lines of therapy, and broaden into other hematologic malignancies like multiple myeloma and AML. Regulatory applications seeking approval for the combination of Venclexta plus Rituxan in relapse/refractory chronic lymphocytic leukemia were approved in the United States in June. Label expansion for this indication should expand the patient population for Venclexta significantly and boost its commercial potential. Also, in July, AbbVie filed U.S. regulatory application for Venclexta in first-line AML while data from the phase III program in multiple myeloma is expected in 2019.

AbbVie also carries a Zacks Rank #3 (Hold). So far this year, AbbVie’s shares have remained flat.

 

 

Bristol-Myers (BMY - Free Report)

Bristol-Myers PD-1 inhibitor, Opdivo, has been performing impressively. The company is working on expanding the label of Opdivo further, alone or in combination therapies with Yervoy and other anti-cancer agents.

Further, Bristol-Myers’ cancer portfolio includes multiple myeloma drug, Empliciti and leukemia drug, Sprycel, which contribute significantly to the top line. In addition, Bristol-Myers is evaluating other immune system pathways for the treatment of cancer. These pathways may help the company bring to market potentially transformational immunotherapies — in combination or as monotherapy — to help fight different types of cancers.

Bristol-Myers carries a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. So far this year, Bristol-Myers’ shares have declined 0.9%

 

 

Others Not Far Behind

Merck is also conducting numerous studies to evaluate its revolutionary anti-PD-1 therapy, Keytruda for more than 30 types of cancer in more than 800 studies, including more than 400 combination studies.

Roche dominates the breast cancer space. There is strong demand for its HER2 franchise drugs like Herceptin, Perjeta and Kadcyla. Apart from its strong breast cancer franchise, Roche’s oncology portfolio also boasts of lung cancer drugs like Avastin and Tarceva and immuno-oncology drugs like Tecentriq. Label expansion efforts are ongoing for all these cancer drugs.

Swiss drugmaker Novartis’s (NVS - Free Report) oncology portfolio was significantly boosted by the approval of breast cancer drug, Kisqali and CAR-T cell therapy Kymriah in 2017. Novartis also boasts many experimental cancer drugs in its R&D pipeline including a couple of biosimilar versions of popular cancer drugs.

Lilly has a well laid out oncology strategy, which involves building on key treatments like Cyramza, Lartruvo and Verzenioas foundational agents while focusing on developing new standard-of-care changing therapies and combination regimens, including immuno-therapies.

Conclusion

Competition in the cancer market is fierce and not all pipeline candidates will be successful. However, pharma biggies have enough late-stage cancer programs in their portfolios and there are chances of quite a few rollouts in the coming years.

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