Second quarter earnings kick into full gear this week as nearly a dozen pharmas and biotechs report.
Broad challenges, such as the pronounced role drug pricing will play in the 2020 election cycle, will likely take up time on many of the corporate calls. But investors will also home in on company-specific issues.
Heavyweights like GlaxoSmithKline and Bristol Myers Squibb should be prepared to show how they intend to compete with rivals holding dominant positions in key markets. Meanwhile, smaller players like The Medicines Co. and Galapagos will have to defend strategies set to define the companies for years to come.
Below, BioPharma Dive explores five of the biggest questions expected to come up this week.
What is Biogen after aducanumab?
Biogen hasn't provided much guidance on next steps in the four months since it halted trials for its prized Alzheimer's disease drug. Even on that front, investors are still waiting for details about why the two late-stage studies didn't work out.
Aducanumab was considered by some the most valuable pipeline asset across all of pharma, due to the large unmet need and economic burden posed by Alzheimer's. Its apparent failure took a $20 billion chunk out of Biogen's market capitalization, and has left the company with a pipeline of still risky bets that don't have as big of payoffs.
Analysts will press Biogen about plans to lower that risk during its earnings presentation Tuesday. They've already questioned executives about diversifying through M&A, but the company hasn't done any transformational deals since its merger with Idec Pharmaceuticals in 2003.
Yet its Alzheimer's setbacks, coupled with competitive challenges to its multiple sclerosis and spinal muscular atrophy drugs, may spur Biogen to reconsider. If Biogen does change its strategy, analysts expect the company to go after a neuroscience biotech with at one asset that can expand its slim late-stage pipeline.
How receptive will doctors be to GSK's two-drug HIV pill?
Gilead crafted a dominant position in the HIV market with treatments that combine three and sometimes four active drugs.
But ViiV Healthcare, a U.K. company majority owned by GlaxoSmithKline, believes fewer drugs lead to fewer side effects, which doctors and patients would of course prefer. ViiV and GSK are now testing that theory with Dovato, a once-daily tablet that combines two drugs called lamivudine and dolutegravir.
Dovato gained U.S. approval in April, giving it now a few months to make market inroads. For the week ended July 12, Dovato had 204 new prescriptions and 356 total prescriptions, according to IMS data cited by RBC Capital Markets. Those numbers are up 51% and 43%, respectively, week over week.
The same week, new and total prescriptions for Gilead's Biktarvy — a mixture of bictegravir, emtricitabine and tenofovir alafenamide — sat at 8,910 and 26,968. RBC analysts noted how Dovato prescriptions are running at less than one-sixth the rate Biktarvy's were 11 weeks after its own launch, which affirms their view that Dovato is "unlikely to be a significant competitor" to the Gilead drug.
GSK will need to convince investors on Wednesday's earnings call that it can close this gap.
Can the Medicines Company's PCSK9 plan work?
Medicines Co. has bet it all on a cholesterol drug set to arrive third to market in a class persistently hamstrung by commercial challenges.
Wednesday's conference call will be Medicines Co. executives' last before the world finds out whether the biotech's plan has a chance. Data from three pivotal Phase 3 studies of its PCSK9 inhibitor inclisiran are due in the third quarter, with regulatory filings to follow if results look good.
Success will be relative, however, to results obtained in testing of Amgen's Repatha and Sanofi and Regeneron's Praluent, two on-market drugs that work similarly. Repatha and Praluent are dosed as frequently as once every two weeks, however, while inclisiran requires just two injections a year.
Even if inclisiran meets the bar set by Repatha and Praluent, it's not clear whether insurers would pay for that convenience. Both approved PCSK9 inhibitors have struggled to secure coverage, requiring price cuts from their respective makers.
Investors in Medicines Company might find themselves cheering on Amgen's lawyers, who are litigating a patent fight with Sanofi and Regeneron over PCSK9-targeting technology. A U.S. federal jury in February found their arguments convincing and, earlier this month, a German court granted an injunction blocking sales of Praluent there.
What's Galapagos' R&D worth?
Investors in Galapagos were likely already believers in the Belgian biotech's self-described "differentiated drug discovery platform."
Those in Gilead, which this month inked a $5.1 billion research deal with Galapagos, are probably taking a closer look.
Galapagos' earnings call on Friday will be the first since that partnership was announced, and could offer further details on how the company plans to invest the nearly $4 billion in upfront cash given by Gilead.
Galapagos CEO Onno van de Stolpe has said much will go toward the biotech's "Toledo" research, a semi-secret program aimed at inflammatory diseases. (Galapagos hasn't disclosed the biologic target, yet.) Onno and his team are currently planning as many as eight parallel Phase 2 studies to begin next year.
For its part, Gilead's made clear it sees the Galapagos deal as the foundation of a broader push into inflammation research. With a $5 billion price tag, it has to be.
What's left for Opdivo?
Bristol-Myers is still working to close its $74 billion deal for Celgene, putting the biotech's psoriasis drug Otezla up for sale in the process.
By absorbing Celgene, Bristol-Myers gains a pipeline of experimental drugs it hopes could eventually generate $15 billion in annual sales - revenue it will need to avoid a future overly reliant on its cancer immunotherapy Opdivo.
For years the leading immunotherapy by sales, Opdivo has now lost that title to Merck & Co.'s rival Keytruda, which has become the go-to option in lung cancer.
The next six to 12 months, though, should give investors in Bristol-Myers a better sense of how well Opdivo can compete. Results from three important Phase 3 studies are due between now and 2020 in first-line lung and kidney cancer - with survival data from the highly anticipated CheckMate-227 trial expected this summer.
Keytruda's set a high bar in both areas, however, putting pressure on Bristol-Myers to prove its drug's staying power.