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Pharma, biotech companies bank on pipeline to overcome pandemic woes

This article is an overview of the financial results of Merck & Co., Bristol-Myers, Novo Nordisk and select other healthcare companies who have reported their earnings since July 30. The first and second editions are available here and here, respectively.

Healthcare companies are banking on existing therapies and new drug launches to recover from the impacts of the COVID-19 pandemic, executives said in earnings calls.

In a July 31 earnings call, Merck & Co. Inc. CFO Robert Davis said second-quarter sales were dented by about $1.6 billion due to the pandemic, but blockbuster cancer drug Keytruda helped cushion the drop in revenue with a 31% year-over-year growth to $3.4 billion. Davis also noted that cancer therapies Lynparza and Lenvima had limited impacts from the pandemic, thanks to their oral formulations.

SNL Image
Bristol-Myers Squibb CEO Giovanni Caforio

Source: Bristol-Myers Squibb

Keytruda's rival, Bristol-Myers Squibb Co.'s bestselling cancer drug Opdivo, saw a 9% year-over-year sales decline in the second quarter, but Opdivo-plus-Yervoy launches in first-line lung cancer makes CEO Giovanni Caforio and other executives optimistic that Opdivo will return to annual sales growth next year.

During an Aug. 6 call with analysts, Bristol-Myers Chief Commercial Officer Christopher Boerner said blood thinner Eliquis was less affected by the COVID-19 pandemic than others in the cardiovascular space. With a recent court decision on its patents, Eliquis — whose second-quarter sales rose 6% annually — remains protected from competitors until at least 2026.

Pipeline propelling sales

Denmark's Novo Nordisk A/S said its glucagon-like peptide-1 receptor agonists — a class of therapies used to treat type 2 diabetes — helped push up sales in the first half, despite a drag from insulin revenues amid fewer patients initiating treatment. Novo Nordisk, the world's oldest maker of diabetes medicines, is also looking at semaglutide with its filing for regulatory approval in treating obesity, set for the end of the year.

Regeneron Pharmaceuticals Inc., whose second-quarter sales recorded a 24% annual hike, saw a rebound in revenues of eye therapy Eylea in the U.S. in recent months with demand now approaching pre-pandemic levels following a decline in sales in early April.

SNL ImageAbbVie CEO Richard Gonzalez

Source: April Keogh

Sales of AbbVie Inc.'s Botox cosmetics product, which the company inherited from the $63 billion takeover of Allergan PLC, were hit by the coronavirus pandemic during the second quarter. However, other assets acquired through Allergan, including bipolar disorder drug Vraylar and migraine therapy Ubrelvy, helped the combined company cruise through the period.

Shifting gears on guidance

Zoetis Inc. raised its forecast for 2020 following "better-than-expected" second-quarter results and with positive growth in the penetration of larger animal clinics. Parsippany, N.J.-based Zoetis remains "excited" by the launch of its Simparica Trio — a chewable against flea and tick infestations on dogs — as prescriptions in veterinary clinics have been more robust and cannibalization of the product has been less than what the company expected.

German healthcare conglomerate Bayer AG, on the other hand, lowered its expectations for the full year as second-quarter pharmaceutical sales declined over 9% annually, primarily due to a reduction of elective treatments amid the pandemic, partially offset by sales of bestselling blood thinner Xarelto.

Stefan Oelrich, head of Bayer's pharmaceuticals division, said during an Aug. 4 earnings call that the company is "super excited about the progress of Nubeqa," despite a delay in new patient starts due to COVID-19. The therapy received approval in the EU and Japan for treating patients with prostate cancer earlier this year.

Although Alexion Pharmaceuticals Inc.'s second-quarter revenues increased 20% annually, CFO Aradhana Sarin said the company's sales guidance for the second half is a little more conservative due to uncertainty around COVID-19 and other factors. During a July 30 conference call, CEO Ludwig Hantson also highlighted that Alexion is on track to launch 10 treatments for rare diseases by 2023.

Betting big on biosimilars

Teva Pharmaceutical Industries Ltd. reaffirmed its 2020 revenue forecast, while the company focuses on its pipeline of biosimilars — therapies intended to be lower-cost versions of already approved biologic medicines. The Israeli drugmaker's recent collaboration with Iceland's Alvotech ehf. paves the way for a "string of launches" in the U.S. over the next 10 years, CEO Kåre Schultz said in an Aug. 5 earnings call.

Mylan Inc. is also relying on its global biosimilar franchise as one of its "key long-term growth opportunities," ahead of a transformation that will combine the company with Pfizer Inc.'s generics and off-patent drugs unit Upjohn Inc. to become Viatris.

Mylan's diverse pipeline, which includes a range of biosimilar drugs and generics, helped soften the negative impact of the pandemic on the British company's revenues in the first half, President and Executive Director Rajiv Malik said in an Aug. 6 earnings call.