A quick guide to Q3 biotech earnings
Earnings season is upon us, with third quarter biotech sales to be reported out over the next few weeks. While the second quarter was relatively strong for most companies in the space, prescription data has been volatile over the last three months and could mean weaker revenues. Yet, the big biotechs have a ton of cash in their war chests and deal-making has been strong — expect that to continue as companies snap up more assets before the year closes out.
Here's a look at what to watch for when companies announce earnings this season:
Vertex, October 25
In September, Vertex revised its guidance projections, lowering 2016 revenue estimates for its cystic fibrosis treatment Orkambi (lumacaftor/ivacaftor), from a previously-expected $1.1 billion to a range of $950 million to $990 million, noting sales projections were too optimistic.
Analysts and investors will be looking for commentary on why Orkambi isn't selling. The company recently got approval for an expanded patient population — adding a pediatric indication for the drug. Expect Vertex to give further details on how this could bolster sales.
Biogen, October 26
With George Scangos out and a replacement CEO yet to be identified, corporate strategy will be top of mind for investors. Expect Biogen to talk up how it plans to move forward as it transitions out of the hemophilia business. Analysts expect the multiple sclerosis drug Tysabri (natalizumab) to have strong sales, but the blockbuster Tecfidera (dimethyl fumarate) will likely continue its downward spiral.
Biogen has been the focus of much speculation recently as a takeout target, but its base MS franchise might not be as attractive as it once was. The company will talk up its Alzheimer's disease candidate aducanumab and investors will be hoping for further details from early-stage trials that were published last month.
Celgene, October 27
Celgene is known for making a lot of bets on smaller companies through a variety of different deal structures that bolster its pipeline, while also having strong drugs in its arsenal like the blood cancer therapy Revlimid (lenalidomide).
Yet, analysts expect the plaque psoriasis drug Otezla (apremilast) to have a weak quarter and for the cancer drug Abraxane (protein-bound paclitaxel) to face more competition from immune-therapies.
Expect Celgene to talk about growing competition in the cancer space, as well as updates on its autoimmune disease candidate ozanimod, which it picked up in its $7.2 billion buy of Receptos in 2015.
Alkermes, October 27
The biotech has been pushing its alcohol and drug abuse treatment Vivitrol as a tool for the criminal justice system and sales are expected to tick upward.
Meanwhile, it's been launching its schizophrenia treatment Aristada (aripiprazole lauroxil). The company is expected to give further updates on the launch now that it's been a year since the drug was approved — in particular, updates on formulary decision that were made this summer.
Analysts, meanwhile, will be looking for further commentary on the major depressive disorder treatment ALKS-5461, as well as other candidates in the pipeline.
Gilead, November 1
There's been plenty of speculation about what Gilead is going to do now that its hepatitis C drugs worked so well that it's running out of patients to treat. Some investors were calling for the company to divest the franchise, but Gilead quickly squashed those rumors.
Expect the hepatitis C franchise to continue its decline, even as the HIV franchise grows. Yet, the most important chatter will be about the big biotech's business development plans. Gilead has a pile of cash and needs to start making acquisitions to make up for declining sales. It will be interesting to see if Gilead decides to make one behemoth acquisition to fill the pipeline or several smaller bolt-on deals.
Regeneron, November 1
While the company's PCSK9 inhibitor has been a colossal disappointment, investors are still ravenously following the drug in hopes that sales of Praluent (alirocumab) will tick up. There will be talk about whether there has been more acceptance of the drug on payer formularies.
Regeneron's eye care treatment Eylea has been performing well. Analysts expect the drug to bring in nearly $3.5 billion for the year. Look for commentary on how the drug is doing with diabetic macular edema patients.
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