Biopharma in Charts aims to complement BioPharma Dive's daily news coverage with a data-driven look at a few of the top trends affecting the industry. This edition focuses on key takeaways from fourth quarter earnings, including strong returns from cancer drugs, growth drivers living up to the name, and the impact of a new U.S. tax code.
Faster growth is forecast in 2018 for the biopharma industry, thanks to the recent overhaul to the U.S. tax code and attendant expectations of an uptick in M&A. So far, that narrative seems to have materialized — many pharmas expect materially lower tax rates this year and splashy buys by Celgene Corp. and Sanofi SA build confidence in a dealmaking boom.
Beneath those macro changes, though, 2018 will also serve as a test of many companies' plans for newer drugs to supplant aging biologics. Whether they're successful might prove just as impactful to investor sentiment around the industry.
Merck & Co.'s Keytruda (pembrolizumab) and Bristol-Myers Squibb Co.'s Opdivo (nivolumab) have largely run away with the cancer immunotherapy market. Over the past year, Keytruda's competitive advantage in first-line lung cancer has spurred rapid sales growth — bringing the drug neck and neck with Opdivo as a revenue generator. And readouts this year from rivals like Roche AG and AstraZeneca plc could shake up the space once again.
Johnson & Johnson watched revenues from its oncology portfolio increase 25% in 2017, a strong performance that helped the big pharma's total pharmaceutical sales tick over the $36 billion mark for the year. Multiple myeloma drug Darzalex (daratumumab) and blood cancer med Imbruvica (ibrutinib) proved essential to the portfolio growth, sporting revenue increases around 100% and 50%, respectively, over multiple quarters last year.
AbbVie Inc. wowed Wall Street with a unexpectedly rosy tax outlook for 2018, forecasting an effective rate of just 9%, less than half the level paid in recent years. A lower tax bill will drive higher earnings, while fueling speculation over potential deals.
The North Chicago, Illinois-based pharma might have set expectations too high, however. More modest cuts to estimated 2018 tax rates from peers have disappointed investors made bullish by AbbVie's guidance.
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Roche AG has relied heavily on revenues from its trio of blockbuster biologics: Rituxan (rituximab), Herceptin (trastuzumab) and Avastin (bevacizumab). While the drugs' run of commercial success looks to continue for some time, biosimilar competition has begun to bite.
The company is prepared for steady erosion, starting in Europe and then spreading to the U.S. Key to its plans are the newer medicines Ocrevus (ocrelizumab), Tecentriq (atezolizumab) and Perjeta (pertuzumab). Ocrevus, in particular, is already pacing to become a blockbuster in its first 12 months on the market.
Celgene investors have pushed for innovation given that more than half of the biotech's revenue comes from a single product, Revlimid (lenalidomide). Otezla, which received Food an Drug Administration approval in 2014, has provided some relief in that department, but Celgene is banking on new CAR-T therapies and myelofibrosis treatments for future growth.
Eli Lilly, despite its investment in neuroscience and oncology, remains best known as a diabetes drugmaker. Pricing pressures in the U.S. have crimped growth from the company's insulin portfolio and weighed heavily on rivals Sanofi SA and Novo Nordisk A/S.
Lilly has fared somewhat better and hopes a crop of new drugs — including the GLP-1 antagonist Trulicity (dulaglutide) — can help offset flagging performance from Humalog (insulin lispro). Competition will be fierce, and investors remain skeptical.