Wall Street analysts have a fondness for crystal ball gazing, summoning all their algorithmic powers to predict whether a company's future will be marked by fortunes or a busted bottom line. But earnings seasons often showcase the limits of their clairvoyance.
The third quarter was no exception. Though some industry trends carried on in normal fashion, such as companies touting their ability to roll out new products while still protecting legacy brands, there were a few surprises to both executives and investment banks.
Below, BioPharma Dive identifies a handful of the brands that had the most unexpected performance from July through September.
Dupixent (dupilumab) had a better quarter than expected. Sales of the Sanofi and Regeneron Pharmaceuticals drug totaled €225 million ($261 million), about $10 million higher that consensus, according to Cowen & Co.
And though it stumbled a little bit earlier this year, a recent regulatory victory should help shore up future success. Days before Sanofi and Regeneron reported their respective earnings, Dupixent — which the Food and Drug Administration originally approved for eczema — locked down an additional indication for asthma.
Laura Chico of investment bank Raymond James noted in early November that Regeneron executives believe Dupixent would be relevant to the roughly 250,000-300,000 patients who are dependent on oral corticosteroids. She anticipates Dupixent revenue from the U.S. asthma market will reach $25 million in 2018, $369 million in 2019 and $1 billion in 2020.
Roche Pharmaceuticals is confident a new wave of products — including hemophilia drug Hemlibra (emicizumab), multiple sclerosis medicine Ocrevus (ocrelizumab) and immuno-oncology treatment Tecentriq (atezolizumab) — will be able to offset rough water expected elsewhere in its portfolio due to biosimilar competition.
Investors, however, appear more cautious. And perhaps rightfully so.
Recent earnings showed European sales of Herceptin (trastuzumab), Roche's blockbuster breast cancer drug and second-best seller, fell 21% during the third quarter. Daniel O'Day, CEO of Roche, explained about 60% of the decline was due to price reductions while 40% was from lower volume, and neither of those was entirely attributable to the launch of two Herceptin copycats.
Nevertheless, it's an ominous sign for Herceptin as well as Roche's Rituxan (rituximab) and Avastin (bevacizumab), two other key products under pressure from biosimilars. The company anticipates further Herceptin erosion in Europe in quarters to come.
Humira (in Europe)
AbbVie has gone to great lengths to protect Humira (adalimumab), the world's top-selling drug and the source of roughly 60% of the North Chicago, Illinois-based company's net revenue.
While biosimilar competition to Humira appears several years off in the U.S., AbbVie got its first taste of it in Europe in mid-October. As expected, it was a bitter taste.
Now having to factor in European biosimilars, AbbVie expects 2018 Humira international sales to reach $6.3 billion this year — reflecting a modest year-over-year increase of 4%. Conversely, AbbVie projects a nearly 11% increase for U.S. Humira sales this year as well as double-digit earnings growth from its portfolio in 2019.
"Certainly over the next couple of quarters we're going to be watching that very closely," Credit Suisse analyst Vamil Divan told BioPharma Dive in early October, speaking about Humira erosion in Europe.
Worldwide revenue for Repatha (evolocumab) looked "a little weak" during the third quarter, Mizuho analyst Salim Syed wrote in an Oct. 30 note. At $120 million, the revenue was below the investment bank's projection of $164 and third party consensus of $163 million.
The downtick followed several quarters of modest but steady sales increases. Repatha, along with Sanofi and Regeneron Pharmaceuticals' fellow PCSK9 drug Praluent (alirocumab), haven't lived up to the commercial hopes of Wall Street when they gained U.S. approval in 2015.
Repatha and Praluent both showed strong efficacy in reducing cholesterol, but their price tags didn't sit well with payers. While their manufacturers at first resisted this criticism, they've recently lowered prices in order to secure insurance coverage and formulary access.
"Although the lower price may impact Repatha sales near term, as plans update we expect to see a positive impact on volume growth as this important therapy becomes more accessible and affordable for many more patients," Murdo Gordon, Amgen's head of commercial operations, said on the company's earnings call in late October.
Rubraca (rucaparib) hasn't exactly been a revenue boon in the roughly two years since Clovis Oncology brought it to market.
To be fair, neither have AstraZeneca's Lynparza (olaparib) and Tesaro's Zejula (niraparib), its two main competitors. But those rivals are drawing in more revenue; third quarter sales of $169 million for Lynparza were in-line with analysts' expectations, while sales of $63 million for Zejula exceeded them.
Clovis' drug, meanwhile, fetched a disappointing $23 million.
CEO Patrick Mahaffy tried to explain what was causing the headwinds on the company's earnings call. He said penetration into second-line maintenance setting for ovarian cancer has been "relatively flat" for PARP inhibitors, adding too that Rubraca currently commands only about 20% of the overall PARP market.
Clovis has been working on building out Rubraca's label to make it more competitive. Still, some have criticized the company's inability to break through these market challenges.
"PARP inhibitors are important drugs. It’s amazing that Clovis and Tesaro haven’t been able to make more of this lately," Brad Loncar, head of Loncar Investments and biopharma investor, wrote in an Oct. 30 tweet.
Facing obstacles in core therapeutic areas of respiratory and HIV, GlaxoSmithKline was quick to tout the near-term growth prospects of its new shingles vaccine Shingrix when the product came to market about a year ago.
So far, Shingrix has delivered. Sales from July through September hit $375 million, well above the $229 million consensus estimates cited by Cowen. The vaccine has done so well, in fact, that GSK has found it difficult to maintain an adequate supply.
It's a good problem to have, given that revenue from GSK's pharmaceuticals and consumer healthcare units was essentially flat year over year, under an annual equivalent rate. The British drugmaker now expects 2018 earnings per share growth to be in the upper range of previous guidance — between 8% and 10% — mostly due to the better-than-expected demand for Shingrix.
Full-year sales of the vaccine should fall in the range of $900 million to nearly $1 billion, according to company leadership.
Analysts expected Eli Lilly's Type 2 diabetes drug to do well, and it did. Revenue for the quarter sat at $816 million, a 55% increase year over year. Driving the growth were higher demand in the U.S. and volume in the rest of the world.
What's remarkable about Trulicity (dulaglutide), however, is that it's doing well even against the well-documented challenges facing the diabetes drug market. To that point, two of Lilly's other key growth products, Jardiance (empagliflozin) and Basaglar (insulin glargine), came in below analysts' estimates for the three-month period.
Trulicity also just scored a huge trial win, showing Type 2 diabetes patients who took the drug experienced significantly reduced major adverse cardiovascular events — a composite consisting of non-fatal stroke, non-fatal heart attack and cardiovascular death. The data could ultimately lead to a label expansion that would help Trulicity stand apart from fellow GLP-1 receptor agonists like Novo Nordisk's Victoza (liraglutide) and AstraZeneca's Byetta/Bydureon (exenatide).
"This is clearly positive news and should ease concerns about Trulicity's ability to compete in the rapidly-growing GLP-1 market," Credit Suisse's Divan wrote in a Nov. 6 investor note.