What's next for biopharma Q3 earnings
As the industry rolls into the second week of pharma and biotech earnings, discussion of biosimilars is top of mind. Roche was one of the first companies to talk about the affects of the copycat biologics on major blockbusters. Expect to hear more commentary from big biotech Amgen, Inc. on the topic — the company is in the unique position to have several products in jeopardy of competition, as well as biosimilars of its own.
This will be a big week for immuno-oncology as well, with Bristol-Myers Squibb Co., Merck & Co., AbbVie Inc. and Celgene Corp. reporting third quarter results over the next few days. Market share in lung cancer and new indications will be part of every call.
(BioPharma Dive previewed earnings for Eli Lilly & Co., Biogen Inc. and Novartis AG, which all report on Tuesday, October 24. Those look-aheads can be found here.)
Here's what you can expect from next week:
Amgen (October 25)
Let's start with the positive. Amgen and Novartis AG's Aimovig (erenumab) has a target action date of May 17, 2018, which puts it at the forefront of an emerging class of migraine medications that inhibit the calcitonin gene-related peptide (CGRP). Should the drug gain approval, it would be a welcome source of growth for Amgen’s neuroscience portfolio and bottom lines.
Amgen executives shed some light on the early commercialization preparations for Aimovig during its last quarterly earnings call, but investors will likely want to check in on the progress. Anthony Hooper, EVP of global commercial operations, at the time said his company was in talks with payers.
Another bright spot was the company's presence in cancer. A recent deal with CytomX Therapeutics Inc. pushed it deeper into immuno-oncology, while the Food and Drug Administration’s approval of Mvasi (bevacizumab-awwb) hands Amgen and Allergan plc a biosimilar version of Roche AG's Avastin (bevacizumab).
The PCSK9 market, however, is problematic. The cholesterol-lowering drugs have yet to take off, and Amgen has faced a good deal of push back for the high price tag on Repatha (evolocumab). What's more, the company has been in a multi-year, back-and-forth legal battle with Sanofi SA and Regeneron Pharmaceuticals Inc. over their PCSK9 drug Praluent (alirocumab). Amgen will be pressed to address its game plan for how to eventually make Repatha worth all the effort.
GlaxoSmithKline (October 25)
In July, GlaxoSmithKline plc CEO Emma Walmsley unveiled a major revamp of the British pharma’s approach to R&D, culling more than 30 clinical and pre-clinical programs.
At the core of the company’s new focus is a desire to more narrowly focus resources on the most promising candidates across four main therapeutic areas: respiratory, HIV, oncology and inflammation. "We have to make sure we can back our winners," explained Walmsley on a July conference call.
Investors should get a glimpse of what this commitment will look like when GSK reports third quarter earnings on Wednesday. Last month, the Food and Drug Administration approved Trelegy Ellipta (fluticasone furoate/umeclidinium/vilanterol), the company’s three-in-one inhaler for chronic lung disease and one of three priority assets flagged by Walmsley.
A fast launch for the triple therapy will be an important buffer against inbound generic competition to GSK’s flagship Advair brand, as well as a key test of how well the drugmaker can forge a new franchise in respiratory.
The two other near-term priority assets — a shingles vaccine called Shingrix and a two-drug HIV regimen — are on the horizon too. Regulatory reviews of Shringrix are ongoing in the U.S. and EU and an approval decision for the combination of GSK's Tivicay (dolutegravir) and J&J's Edurant (rilpivirine) could come this year.
Bristol-Myers Squibb (October 26)
Despite setbacks for the blockbuster PD-1 inhibitor Opdivo (nivolumab), Bristol-Myers Squibb is still dominating the immuno-oncology market. While Merck & Co.'s Keytruda (pembrolizumab) will likely limit the second-line non-small cell lung cancer (NSCLC) market for the drug, Bristol-Myers still has a strong standing in the space, so expect this market to move closer to a 50/50 split.
There will definitely be questions for the company about the regulatory holds put on PD-1/L1 inhibitors in the multiple myeloma space and what this means for the class.
Expect the company to have a lengthy discussion of opportunity in the lung cancer market, as well as expectations for the Opdivo/Yervoy (ipilimumab) combination.
Eliquis (apixaban) will be another drug on investors' radar. The anti-thrombotic has gone from about 9% market share in mid-2013 to more than 50% by August 2017, overtaking Johnson & Johnson's Xarelto (rivaroxaban), and the drug still has plenty of upward momentum.
Beyond both of these core areas, pipeline prospects and business development plans will be top of mind for analysts and investors — particularly, whether there is any truth to a potential take-out by Pfizer. Bristol-Myers has said previously that it's looking for deals in its four key areas: oncology, immunoscience, fibrosis and cardiovascular.
Celgene (October 26)
Celgene's seemingly ever-present task is to show there's more to the company than just Revlimid (lenalidomide).
The treatment for mantle cell lymphoma and multiple myeloma has hit blockbuster status every year since it was first approved in 2013, solidifying Celgene's position as as a top-tier blood cancer drugmaker. Just last quarter, Revlimid had net sales of more than $2 billion.
While Celgene has other formidable cancer products in Pomalyst (pomalidomide) and Abraxane (paclitaxel), as well as the blockbuster inflammation drug Otezla (apremilast), investors have pushed the company for pipeline and portfolio diversification.
To its credit, Celgene made big strides toward that goal in recent months. The big biotech received FDA approval for Idhifa (enasidenib), a first-of-its-kind medicine for relapsed or refractory acute myeloid leukemia patients who have a mutations in a type of enzyme called isocitrate dehydrogenase-2. It also inked deals with Forma Therapeutics Inc. and Nimbus Therapeutics Inc. focused respectively on drugs targeting proteostasis and the immune system.
Perhaps most importantly, the company released more positive data showing its highly anticipated immunomodulator ozanmiod provided significant benefit to patients with Crohn’s disease and ulcerative colitis.
Gilead (October 26)
Executives at Gilead Sciences Inc. finally put analysts' perennial question on M&A to rest with a surprising $12 billion acquisition of CAR-T developer Kite Pharma Inc.
While management may relish not having to brush off impatient queries on its business development plans, analysts will likely press execs on how cell therapy fits with the company’s expertise in HIV and hepatitis C.
The recent approval of Kite's CAR-T treatment, now known as Yescarta (axicabtagene ciloleucel), will give that discussion more immediate energy. While Yescarta's cost is now known, analysts will want to know if the company has plans to roll out any outcomes-based pricing arrangements — as Novartis AG did with its CAR-T therapy Kymriah (tisagenlecleucel).
How Gilead expects payers to receive Yescarta's $373,000 list price will also likely be a key topic for discussion.
Even if Gilead sees rapid success with Yescarta, CAR-T will not disguise the ongoing adjustments the company faces as sales of its hepatitis C medicines wane. The rapid declines seen recently likely won't remain as steep in upcoming quarters, but where the franchise bottoms out will have a large impact on Gilead’s revenue growth.
Non-hep C products are expected to account for a greater share of net product sales than hep C drugs this year, meaning HIV and hepatitis B will be of increasing importance, as will other liver diseases like non-alcoholic steatohepatitis (NASH).
AbbVie (October 27)
AbbVie's Humira (adalimumab) continues to be the best-selling drug in the world, but is facing new competitive threats as biosimilars of Humira and other TNF inhibitors enter the market. Expect AbbVie to continue to tell investors that it's not worried. Meanwhile, analysts don’t believe the competition will begin to erode revenues until at least 2019. A settlement with Amgen, Inc. will delay that company's biosimilar from commercialization until Jan. 31, 2023, for example.
But AbbVie is already focused on what comes next,developing a JAK 1 inhibitor as a follow-on to Humira. Upadacitinib, as the new drug is known, is currently in Phase 3 for rheumatoid arthritis and a filing is expected next year. The drug also has trials ongoing in psoriatic arthritis, Crohn's disease and atopic dermatitis — look for the company to give an update on progress.
While everyone has been focused on Humira the last few years, AbbVie has been quietly building and moving along its pipeline, including a growing presence in oncology. Now led by Imbruvica (ibrutinib), which is on its way to annual sales of nearly $5 billion in the next five years, there are a growing number of prospects in the oncology pipeline. Imbruvica is also in development for several other indications that AbbVie could give an update on.
The company has partnerships with other big pharmas on a few of its pipeline candidates, including Empliciti (elotuzumab) with Bristol-Myers Squibb and Venclexta (venetoclax) with Roche's Genentech. Both will help build AbbVie’s presence in oncology, but represent much smaller revenue opportunities than Imbruvica.
Merck & Co. (October 27)
While Merck & Co. can tout its clear success in the near-term due to its leading position in first-line lung cancer amongst the checkpoint inhibitor crowd, that win will only take the company so far.
The next big hurdle for its PD-1 inhibitor Keytruda (pembrolizumab) will be its effectiveness when used in combination. The company currently has more than 300 combination trials ongoing to test the drug in as many types of cancer with as many other agents as possible. But Merck starts behind competitor Bristol-Myers Squibb, which already has an approved immuno-oncology agent to pair its PD-1 inhibitor with, in the form of an Opdivo-Yervoy combo.
While all eyes are on Keytruda and the immunotherapy market, Merck’s best-selling franchise is still the diabetes medication Januvia (sitagliptin). The drug brought in more than $6 billion in 2016, but revenues are expected to decline slightly this year as Januvia faces increased competition. Expect some commentary from management on how Merck intends to defend this important franchise — whether it be through more combination products, more deals like the recent KalVista agreement, or through patent litigation.
Don't expect Merck to announce any big deals though: this big pharma takes its time with M&A and tends to opt for smaller bolt-ons that can add value to its existing franchises.
Shire (October 27)
Shire has a lot on its plate.
First, the Irish pharma has been working to defend its hemophilia business as innovator drugs look poised to storm the market. It took aim at one of its biggest threats, Roche AG, back in July through an injunction claiming the Swiss pharma had painted a misleading picture of both the effectiveness its drug emicizumab and Shire’s Feiba (Anti-Inhibitor Coagulant Complex).
Emicizumab isn’t approved yet, but it’s close, and serves the same population as Feiba: hemophilia patients with inhibitors. Though another approved drug in that space wouldn’t cripple Shire by any means — Feiba sales are expected to account for roughly 5% of the company’s 2017 revenue — there are many other new treatments waiting in the wings that could steal market share. To that end, Shire predicts 50% erosion in the inhibitor market for Feiba by 2022. The company doesn’t have a ton of hemophilia drugs in its pipeline either, so navigating the impeding competition will continue to be a focus.
Shire also teased at a potential spin off of its neuroscience unit during its last quarter earnings call. Updates on whether strategic reviews have taken place and, if so, what conclusions they drew wouldn’t be surprising. Analysts will also be looking to see how goes the launch of the Mydayis (mixed salts of single-entity amphetamine), the company’s latest attention deficit hyperactivity disorder treatment, particularly as revenues diminish for Adderall XR (mixed salts of a single-entity amphetamine product).