This week Merck
MRK, Bristol Myers BMY, Sanofi ( SNY Quick Quote SNY - Free Report) , Glaxo GSK and Novo Nordisk NVO reported fourth-quarter earnings and sales. In a surprising move, Merck announced plans to spin off its Women Health products, legacy drugs and biosimilars into a new company. Merck, Bristol-Myers, Sanofi and AbbVie ABBV provided pipeline and regulatory updates. Recap of the Week’s Most Important Stories: : Earnings Update Bristol Myers beat estimates for both earnings and sales in the fourth quarter. While earnings rose almost 30%, total revenues increased 33%, mainly driven by the addition of Celgene’s products. The company expects earnings of $6.00-$6.20 per share and revenues in the range of $40.5 billion-$42.5 billion in 2020. Merck and Sanofi’s fourth-quarter results were mixed as both companies beat estimates for earnings but missed the same for sales.
While Merck’s earnings rose 12% year over year, sales rose 8%. Pharmaceutical segment sales rose 7% as higher sales in oncology and hospital business were offset by lower vaccines sales. In 2020, Merck expects revenues to be in the range of $48.8 billion – $50.3 billion, while earnings are expected to be in the range of $5.62–$5.77.
Sanofi, double-digit growth in the Specialty Care and Vaccines was offset by persistent sluggishness in Diabetes and Cardiovascular franchises and a weak performance in the Consumer HealthCare unit in the quarter. Sanofi expects earnings to grow approximately 5% at constant exchange rate (CER) in 2020. Glaxo missed on earnings and sales in the fourth quarter. Pharmaceuticals segment sales were down 4% at CER as the company’s established drugs continued to decline. However, the company’s new products from every segment performed well in the reported quarter, especially Shingrix. Glaxo expects earnings to decline in the range of 1% to 4% at CER in 2020.
Novo Nordisk’s earnings were in line while sales slightly missed estimates. Sales in the Diabetes and Obesity Care segment increased 7% at CER while that in the Biopharmaceuticals segment increased 2%. Novo Nordisk expects 3-6% sales growth at CER for 2020.
Along with the earnings release, Merck revealed plans to spin off its women's healthcare unit, biosimilar drugs and legacy products into an independent public company. The move is expected to allow it to focus on its core areas, oncology, vaccines, hospital and animal health. Merck expects the spinoff to be completed by the first half of 2021. Merck to Separate Into Two Companies:
Meanwhile, Merck’s supplemental new drug application, seeking approval for itsnew antibacterial injection
Recarbrio for another indication — hospital-acquired and ventilator-associated bacterial pneumonia (HABP/VABP) — was accepted by the FDA. With the FDA granting priority review to the application, a decision is expected on Jun 4. The application was based on data of the pivotal phase III RESTORE-IMI 2 study. Recarbrio is a fixed combination of relebactam with imipenem/cilastatin.
The FDA also approved updating the label of Merck’s insomnia drug Belsomra (suvorexant) C-IV to include data from a study evaluating Belsomra for the treatment of insomnia in people with mild-to-moderate Alzheimer’s disease dementia. Belsomra is presently approved to treat insomnia characterized by difficulties with sleep onset and/or sleep maintenance.
Sanofi’s investigational brain-penetrant BTK inhibitor, SAR442168 met the primary endpoint in a phase II study in relapsing multiple sclerosis. Data from the study showed that SAR442168 significantly reduced disease activity associated with multiple sclerosis as measured by magnetic resonance imaging (MRI). Sanofi claims that SAR442168 has the potential to address sources of multiple sclerosis damage in the brain and could transform the way the disease is treated. Sanofi plans to initiate four phase III studies on SAR442168 in relapsing and progressing forms of multiple sclerosis by mid-2020. Sanofi’s Multiple Sclerosis Candidate Meets Goal in Study: Bristol Myers withdrew an application in the European Union. The application sought approval of Bristol-Myers Withdraws Opdivo European Application in Lung Cancer: Opdivo plus Yervoy for the first-line treatment of advanced non-small cell lung cancer. The application, which was based on data from the CheckMate - 227 study, is also under review in the United States with a PDUFA date of May 15. The company does not plan to re-file the application in the EU. Glaxo announced a collaboration deal with Coalition for Epidemic Preparedness Innovations to make its established pandemic vaccine adjuvant platform technology accessible to the latter to develop a vaccine for the 2019-nCoV virus. Glaxo Signs Deal with CEPI to Make Vaccine to Fight Coronavirus:
Separately, the European Medicines Agency (EMA) accepted Glaxo’s marketing application seeking approval of belantamab mafodotin for the treatment of relapsed or refractory multiple myeloma. The application has been accepted for accelerated assessment by the EMA’s Committee for Human Medicinal Products (CHMP). A biologics license application (BLA) for belantamab mafodotin is under priority review in the United States.
AbbVie’s second phase III study evaluating Rinvoq (upadacitinib) for active psoriatic arthritis met the primary as well as key secondary endpoints. The study (SELECT-PsA 1) evaluated Rinvoq in active psoriatic arthritis adult patients who had an inadequate response to other bDMARDs. Top-line data from the study showed that both doses of Rinvoq (15 mg and 30 mg, once daily) met the primary endpoint of ACR20 response or at least a 20% reduction in the number of both tender and swollen joint counts, at week 12 versus placebo. After 12 weeks of treatment, ACR20 response was achieved in 71% of the patients receiving the 15 mg oral once-daily dose of Rinvoq and 79% of the patients taking the 30 mg dose versus 36% for patients in the placebo group. Also, the 30 mg dose of Rinvoq achieved superiority to Humira in terms of ACR20 response at week 12, whereas both doses achieved non-inferiority to Humira. Rinvoq was approved for the treatment of moderate-to-severe rheumatoid arthritis in the United States in August and in Europe in December last year. AbbVie Rinvoq Meets Goal in 2nd Psoriatic Arthritis Study:
The NYSE ARCA Pharmaceutical Index rose 2.2% in the last five trading sessions.
Large Cap Pharmaceuticals Industry 5YR % Return
Here is how the seven major stocks performed in the last five trading sessions.
Last week, Bristol-Myers recorded the maximum gain (5.2%) while Glaxo declined the most (6%).
In the past six months, Bristol-Myers has risen the most (41.9%) while Merck recorded the lowest gain (1.2%).
(See the last pharma stock roundup here:
LLY, PFE Q4 Results, JNJ’s Coronavirus Vaccine Initiative) What's Next in the Pharma World?
Watch out for fourth-quarter 2019 results of Allergan and AstraZeneca and regular pipeline and regulatory updates next week.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.7% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>