Pharma Q2 Results Preview: Pfizer, Teva, Shire, Sanofi And Novo Nordisk


What Did Ian Read Learn From Trump?

Pfizer Inc. CEO Ian Read may have as much insight as anyone in the pharma world into US President Donald Trump’s thinking on drug pricing and potential policy steps, after talking to the president on the phone and visiting him at the White House in July.

You can bet analysts and investors will want to hear what Read learned from his meeting with Trump and why he felt it was the right decision to walk back price increases on dozens of drugs after Trump called out  Pfizer via Twitter.

Pfizer’s action on drug prices has set something of a sweep across the industry, which has largely followed Pfizer with promises to hold off on increasing drug prices for the remainder of the year – although the companies for the most part already took one or two rounds of price hikes earlier this year. A key question for Read is why. Did he decide to walk back on the price increases to avoid public embarrassment, or was there an opportunity to win leverage with Trump on another issue impacting the pharmaceutical industry?

There will certainly be other important things to hear about during Pfizer’s second quarter sales and earnings call July 31. The breast cancer treatment Ibrance (palbociclib) is a huge growth-driver for the company, but the first overall survival data to read out were disappointing compared to the impressive progression-free survival data that have been seen. The data could raise some questions about the impact on the evolving use of Ibrance to treat first-line advanced breast cancer. On the other hand, Pfizer and partner Eli Lilly & Co. also announced positive Phase III data on the NGF-inhibitor tanezumab for pain, which could be a blockbuster opportunity if safety can be managed.

Another topic investors will be interested in talking about is the restructuring announced in July that will move biosimilars, sterile injectables and anti-infectives under the innovative medicines umbrella.

Teva: Copaxone Pricing And Fremanezumab Timing

The two big questions investors probably want answers to during Teva Pharmaceutical Industries Ltd.‘s Aug. 2 earnings call are around the impact of generics on the multiple sclerosis franchise Copaxone (glatiramer) and the timing of US FDA’s review of the migraine drug fremanezumab.

Sales of Teva’s big branded product Copaxone have taken a hit in the first part of the year following the launch of Mylan NV‘s generic version of the 40 mg dose in October 2017. Sales of the drug in North America declined 40% in the first quarter, but the impact came from price, not volume. Mylan has since taken a big price reduction on its product and now investors are wondering how Teva plans to respond and what the impact could be on the second half of the year.

One big potential growth opportunity for Teva has been the anti-CGRP antibody fremanezmab for migraine, but even that has run into trouble in the form of a manufacturing issue at its third-party manufacturer Celltrion Inc. Teva’s application with FDA originally had a June 16 user fee date, which could have put fremanezumab on par to launch with Amgen Inc./Novartis AG‘s Aimovig, which was approved by FDA in May. The delay could be a big setback as Lilly is also awaiting FDA action on its CGRP product galcanezumab in October.

Teva warned investors in May that fremanezumab could be delayed until the end of the year.

Shire Call To Focus On Takeda Merger Fallout

On its previous quarterly earnings call in late April, Shire PLC avoided the topic of Takeda Pharmaceutical Co. Ltd.’s bid to acquire it, but that should change now that the two companies agreed to tie the knot May 8 in a deal valued at roughly $62m. ( (Also see «Takeda, Shire Finally Seal £46bn Deal» – Scrip, 8 May, 2018.)) In a complete inversion, Shire’s second quarter earnings call on July 31 seems likely to focus on little but the issues surrounding its pending combination with the Japanese pharma.

A number of questions persist after the several-month courtship reached its conclusion, including what role Shire CEO Flemming Ornskov will have in the merged company and whether Takeda might divest some of its own assets or Shire’s to streamline the resulting firm. Prior to the merger agreement, Takeda offloaded its ophthalmology business to joint venture Scohia Pharma Inc., raising the question of how dry eye drug Xiidra (lifitegrast) and the nascent eye care business Ornskov has been building will fit into the new company’s future plans.

Investors will be curious to hear how Xiidra’s launch is progressing after the drug posted solid growth to $61m during the first quarter, but missed consensus estimates of $90m badly. The performance of the Dublin-based firm’s leading franchises in hemophilia and hereditary angioedema also will be leading topics. The three-drug HAE portfolio produced stagnant sales of $369m during the first quarter, up 1%, but Shire has pointed to the promise of antibody candidate lanadelumab, under regulatory review in the US, Europe and Japan, as holding the potential to shake up that market.

 Sanofi: Topics Include M&A and Viable Growth

Sanofi, which reports second quarter results on July 31, has had an interesting start to 2018 with its €3.9bn purchase of Belgium’s Ablynx NV and the completed $11.6bn acquisition of Biogen Inc.‘s rare blood diseases focused spin-out Bioverativ Inc. Analysts will now be looking for clues about whether the French drug maker has similar interest in Bioverativ’s hemophilia partner, Swedish Orphan Biovitrum AB.

Management is also likely to be quizzed on what Sanofi plans to do with the proceeds from the €1.9bn sale of its European generics unit Zentiva BV to private equity firm Advent International Corp., which was completed last month.

But the broader picture of what will drive growth at Sanofi going forward will also come under scrutiny, Datamonitor Healthcare analyst Zara Fulton said.

«Sanofi is under pressure to demonstrate its long-term growth potential, and investors will want to hear about progress on promising late-stage candidates, including Cablivi (caplacizumab) and cemiplimab,» its Regeneron Pharmaceuticals Inc.-partnered anti-PD-1 candidate, which has been filed on both sides of the Atlantic for cutaneous squamous cell carcinoma (CSCC), Fulton noted.

«Investors should be concerned about erosion of Sanofi’s recently acquired hemophilia franchise by Roche’s Hemlibra (emicizumab), and by BioMarin Pharmaceutical Inc.’s gene therapy valoctocogene roxaparvovec in a couple of years.»

Fulton said that at more than eight times expected product revenue for 2018, the ‘expensive Bioverativ buyout’ seems out of place next to Sanofi’s other recent takeover of innovative biologics-focused company Ablynx. Still, the deal is set to provide a near-term boost to Sanofi’s product revenue from the biotech’s current leading market position in hemophilia, through Eloctate (recombinant Factor VIII) for hemophilia A and Alprolix (recombinant Factor IX) for hemophilia B.

«Bioverativ’s hemophilia products have a strong market presence now, but the treatment landscape in hemophilia is rapidly changing, and these products will likely not represent the standard of care beyond the short to medium term,» she told Scrip.

Global reimbursement negotiations regarding Dupixent (dupilumab) for atopic dermatitis and PCSK9 inhibitor Praluent (alirocumab) will also be a focus at the Sanofi half-year update. The drugs will help drive modest top-line growth over the next 10 years, as Sanofi looks to deal with biosimilars of its big-selling diabetes therapy Lantus (insulin glargine) entering the market.

Novo Nordisk Has To Answer On Oral Semaglutide And M&A

When diabetes heavyweight Novo Nordisk AS reports second-quarter results on Aug 8, investors will be focused on the mass of Phase III oral semaglutide data that were released during the quarter, and seek added insights that management might offer about the trials.

«Oral semaglutide showed dominance compared to Boehringer Ingelheim GMBH/Lilly’s SGLT-2 inhibitor Jardiance on weight loss and HbA1c reduction in these trials and I expect investors will question the implications of these results on the potential market opportunity,» said Datamonitor Healthcare analyst Oliver Spray.

Further questions are likely to arise surrounding oral semaglutide’s high nausea and discontinuation rates in the higher dose – and how this may play out in terms of market positioning. Whether oral semaglutide will be positioned alongside injectables or alongside other orals, as well as pricing, will be a key issue, Spray said.

«Other likely topics for the earnings call will be: an update on the launch of Novo Nordisk’s new weekly GLP-1 Ozempic (semaglutide) and market dynamics between it and Lilly’s Trulicity, updates on US-based pricing for insulin therapies following announcements from HHS Secretary Alex Azar that prices are too high and manufacturers are under investigation,» the analyst told Scrip.

Investors will also likely ask for an update on Novo’s M&A plans after it failed to buy Ablynx in January.





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