January is always a busy time for biopharma. With the latest J.P. Morgan Healthcare Conference now in the books, companies are shifting gears to report full-year results. Johnson & Johnson will, in typical fashion, lead the pack with its earnings presentation set for Wednesday.
Beyond the sales beats and misses, there's much uncertainty hanging over the sector. Election years typically make pharmaceutical companies even more sensitive to topics such as new regulations or pricing reform. And while J.P. Morgan usually sets the tone for the months ahead, this most recent iteration didn't have as clear a narrative as in year's past.
Still, it's likely that one of investor's favorite topics, dealmaking, will be a focal point on several calls. Analysts see an impetus for big biotechs such as Biogen and Gilead to use their cash reserves on M&A. Eli Lilly, meanwhile, recently signaled a desire to do at least three more deals this year.
Smaller companies such as Bluebird Bio and Global Blood Therapeutics shouldn't have deal expectations, but instead will face questions about the launch strategies for their own products.
Below, BioPharma Dive looks at five upcoming earnings calls that could offer notable updates.
Novartis' next wave of new drugs
The Swiss pharma won approvals for five new drugs in 2019, adding to its business therapies for spinal muscular atrophy, multiple sclerosis, breast cancer, macular degeneration and sickle cell disease.
Regulatory successes like those support company CEO Vas Narasimhan's ongoing efforts to shift Novartis from a sprawling conglomerate spanning consumer health and eye care to a more narrowly focused drugs business.
So far, that transition has been made easier by the blockbuster performance of Cosentyx and Entresto, two drugs that combined earned Novartis nearly $4 billion through the first nine months of 2019.
An earnings call on Jan. 29 will put a spotlight on the drugs Novartis hopes can follow. Sales of Zolgensma, in particular, will be closely watched by investors and analysts as the spinal muscular atrophy treatment is important for both Novartis and the broader gene therapy field.
Despite a price tag of $2.1 million, insurers have reimbursed for Zolgensma for all but one of the 100 or so infants who were eligible and received treatment through the end of last year. Investors will be looking for that to continue, particularly as crosstown rival Roche could soon debut a competing drug in the U.S.
Biogen's shot at an Alzheimer's first
In October, Biogen announced it would file an experimental Alzheimer's disease drug for approval sometime in early 2020. If approved, the drug, called aducanumab, would become the first commercially available treatment for what many researchers believe is the underlying cause of Alzheimer's, a title that would almost surely lead to billions of dollars in sales.
Biogen appears confident such a scenario will play out, detailing last week at the J.P. Morgan Healthcare Conference that it's already preparing a launch team for the drug and increasing manufacturing power to be ready for the demand. Investors, however, are likely to further press the Boston-area biotech about its discussions with regulators and whether those are compelling enough to counter what some see as very low chances of the drug's approval.
More bearish investors and researchers have pointed to the contrasting results seen across two large, identically designed studies of aducanumab. One study found Alzheimer’s patients who were on a high dose of the drug over enough months showed slower cognitive decline compared to patients given placebo. Yet the other found the opposite, with high-dose aducanumab actually performing worse than placebo.
Peter Bach, a researcher and oncologist at Memorial Sloan Kettering, argued in a recent opinion piece for STAT that regulators should reject aducanumab based on these mixed results, particularly because so many other drugs that work like Biogen's have failed in the clinic. Using one kind of statistical analysis, Bach wrote that the odds of the successful aducanumab trial being a false positive were around 40%.
While the industry watches for a filing and regulator response, Biogen's also trying to work through challenges to the rest of its business. A patent dispute is current threatening the biotech's top-selling drug at the same time its blockbuster Spinraza franchise faces new competition from Novartis and, perhaps soon, Roche.
Eli Lilly eyes some buys
Eli Lilly's chief financial officer told Reuters last week the company anticipates doing a deal worth $1 billion to $5 billion each quarter in 2020. There's already an example of what these deals may look like too, as Lilly kicked off the year with a $1 billion acquisition of California-based Dermira and its late-stage eczema drug.
Investors, of course, will want more tidbits about the target companies Lilly would be interested in.
Lilly CEO David Ricks seemed to offer a few hints at the J.P. Morgan conference. He noted, for example, how oncology and immunology have especially large numbers of promising assets.
"While we love diabetes and neuroscience, there are just fewer venture-backed ideas in that space," Ricks said.
Lilly's certainly able to do more dealmaking, as evidenced by a recent EY report that listed it among the top pharmaceutical companies with the firepower necessary to do big transactions. The Indianapolis pharma ended the third quarter with $1.56 billion in cash and cash equivalents.
Global Blood's first launch
Up until late last year, doctors in the U.S. had few treatment options for people suffering from sickle cell disease, an inherited blood disorder that affects about 100,000 Americans.
Approvals for Global Blood's Oxbryta and Novartis' Adakveo changed that, doubling the number of drugs cleared to treat sickle cell within the span of two weeks.
Earnings calls with executives from Novartis on Jan. 29 and Global Blood sometime thereafter will offer an early gauge of how sickle cell physicians are responding.
The two drugs might not directly compete with each other, as they work differently and target distinct symptoms of the disease. Oxbryta combats the anemia and blood cell destruction that can lead to organ damage, while Adakveo is designed to reduce the debilitating pain crises that are a hallmark of sickle cell.
For Global Blood, however, launching a new therapy at the same time as global pharmaceutical giant Novartis will put its sales strategy under the microscope.
The California biotech is fielding a team of 75 specialists that will target 5,500 healthcare professionals who work most commonly with sickle cell patients.
While Wall Street analysts forecast eventual billion-dollar sales for Oxbryta, expectations are for a modest launch initially. One uncertainty centers on how widely physicians will use the drug, which is approved for adult and pediatric patients older than 12 years of age. That corresponds to some 86,000 patients, but doctors could choose to focus first on the 22,000 with particularly low hemoglobin levels.
Global Blood priced Oxbryta at roughly $10,000 a month. While the company expects rebates and discounts will result in a net price that's 25% to 30% lower, insurer reactions to the high cost will be another test.
Bluebird's gene therapy gets off the ground
For the first time, Bluebird should have sales to discuss on its next corporate earnings call, having announced earlier this month the launch in Germany of its gene therapy Zynteglo for beta-thalassemia.
While Bluebird won approval for the drug — its first ever — last June, the biotech delayed a launch to iron out its manufacturing for the one-time treatment.
Sales aren't likely to be high, particularly as Zynteglo's use is limited to qualified treatment centers, the first of which is in southwestern city of Heidelberg. But it's the first commercial test for Bluebird and an early gauge of how its $1.8 million price will be received in the market.
Bluebird plans to submit Zynteglo for approval in the U.S. this year, and could also file its Lenti-D product for cerebral adrenoleukodystrophy. Partner Bristol-Myers Squibb, meanwhile, expects to soon ask the Food and Drug Administration for approval of the Bluebird-developed CAR-T ide-cel.