Image Source: e-Magine Art
Some big news in the world of biotech and pharmaceuticals has come out this week, starting Monday October 21, that we want to get out in front of our members. In alphabetical order by ticker symbol: BIIB, BMY, MRK, NVS.
By Callum Turcan
Biogen Inc (BIIB) reported third quarter 2019 earnings on Tuesday October 22 that easily beat both top and bottom line estimates. That was partially due to strong sales at its SPINRAZA offering, which is used to treat spinal muscular atrophy. Shares of BIIB rocketed higher during the trading session as investors priced in the upside that Biogen’s Aducanumab treatment could generate, with the company announcing that it was going to ask the US FDA to approve the experimental treatment for Alzheimer’s. That marked a complete 180 from Biogen’s previous comments that noted Aducanumab wasn’t effective.
The company is now stating that new and improved analysis from a larger dataset from previously conducted (but discontinued) studies indicates that Aducanumab was more effective than first thought (determined through the results from the Clinical Dementia Rating-Sum of Boxes survey), which is why the company seeks to resurrect this possible treatment. Biogen notes that its analysis indicates Aducanumab reduced clinical decline at patients with certain forms of Alzheimer’s on multiple fronts, particularly when the treatment was given in the form of larger doses (that was really the key here).
Bristol-Myers Squibb Company (BMY) reported on October 22 that its CheckMate -9LA Phase 3 trial, which is evaluating the combination of OPDIVO and YERVOY, along with two cycles of chemotherapy, to treat non-small cell lung cancer met its primary endpoint of “superior overall survival” (compared to patients who were treated with just chemotherapy). This news saw shares of BMY jump higher during the trading session that day. According to the US National Library of Medicine’s website, Bristol-Myers is targeting an estimated study completion date in November 2020. The company noted that it was very excited about these results (which could give its oncology treatment sales a huge boost in the foreseeable future) and would provide more information on its CheckMate -9LA trial in the near-future.
Merck & Co (MRK) was down on aforementioned BMY news on October 22 as investors priced in the potential for greater competition to Merck’s top selling KEYTRUDA drug, which is also used to treat cancer. When Merck reported its second quarter 2019 results back in July, the pharmaceutical giant noted that KEYTRUDA sales clocked in at over $2.6 billion worldwide. Furthermore, that represented a whopping 58% year-over-year increase in KEYTRUDA revenue, a growth rate that rises to 63% when excluding foreign currency movements (as the US dollar has been strong of late, those foreign currency movements posed a headwind to Merck’s overseas KEYTRUDA sales). On an annualized basis, KEYTRUDA has already exceeded the $10.0 billion revenue mark, highlighting the significance of this offering and why any new competitive threat is likely to scare investors (at least to a degree).
Novartis AG (NVS) reported third quarter 2019 earnings on October 22, with both its top and adjusted bottom (on a non-GAAP basis) lines beating consensus estimates. Its outperformance was in part due to strong sales of its COSENTYX medication in the US and abroad (sales were up 31% year-over-year in the US and 20% year-over-year internationally on a constant currency basis), which is used to treat moderate to severe plaque psoriasis. Management raised Novartis’ full-year outlook on the back of its strong results, with the pharmaceutical giant now targeting high single-digit revenue growth in 2019 on a constant currency basis. Core operating income on a constant currency basis is expected to increase in the mid to high-teens on an annual basis this year. Shares of NVS were trading modestly higher during the trading session after publishing its results.
Pharmaceuticals (Big) Industry – ABT ABBV AMGN AZN BMY LLY GSK MRK NVS NVO PFE SNY
Pharmaceuticals (Biotech/Generic) Industry – ALXN AGN BHC BIIB BMRN GILD MYL REGN TEVA VRTX ZTS
Related: XLV, IBB, XBI, FBT, BIB, PBE
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Callum Turcan does not own shares in any of the securities mentioned above. Some of the companies written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.