Second-quarter results of pharma bigwigs like Lilly LLY, Glaxo GSK and Allergan hogged the limelight this week. Other than that, the FDA approved AbbVie’s ABBV pipeline candidate elagolix for management of pain associated with endometriosis and Pfizer’s PFE biosimilar version of Amgen’s neutropenia drug, Neupogen. Lilly said it will separate its Animal Health unit, Elanco into a new independent public company via an initial public offering (IPO).
Recap of the Week’s Most Important Stories
Strong Earnings Performance by Pharma Bigwigs: Lilly beat estimates for both earnings and sales and also raised its outlook for 2018 for the second time this year. While Lilly’s earnings per share rose 35% year over year, sales increased 9% in the quarter. Pharmaceutical revenues rose 10% in the quarter.
Glaxo, Allergan, AstraZeneca AZN and Bristol-Myers BMY all beat estimates for earnings and sales. While Allergan raised its guidance for both earnings and sales, Glaxo and Bristol Myers upped their earnings expectations. AstraZeneca maintained its previously issued earnings and sales outlook. AstraZeneca expects to deliver a better performance in the second half of the year.
Meanwhile, Allergan’s board authorized a new $2.0 billion share buyback plan that will be deployed over the next twelve months.
AbbVie’s Elagolix Gets FDA Approval: The FDA approved AbbVie’s pipeline candidate elagolix for management of pain associated with endometriosis, a common gynecologic disorder. The product, to be marketed by the trade name of Orilissa, is expected to be available in U.S. retail pharmacies early next month.
In April, the FDA had extended the review period of its NDA for elagolix by three months as it required time to review additional information provided by AbbVie related to the results of liver function tests. Elagolix is also in late-stage development for reducing heavy menstrual bleeding in premenopausal women with uterine fibroids. (Read more: AbbVie Secures FDA Approval for Endometriosis Drug Elagolix)
Lilly Plans IPO for Animal Health Unit: Lilly announced that the strategic review of its Elanco Animal Health unit is now complete. It has been decided that it will establish Elanco as an independent publicly traded company via an initial public offering (IPO) and subsequent separation. Lilly said it will initially pursue an IPO of a minority stake of less than 20% in the separated Elanco unit. For this, it will soon file a registration statement with the SEC. This IPO process is expected to be concluded by the second half of this year. Lilly’s remaining ownership in Elanco is expected to be divested through a “tax-efficient transaction” probably by next year.
Lilly management said they considered many options, including retention, sale or IPO after initiating the strategic review in October 2017. Management is confident that the IPO and subsequent separation of Elanco is the best option as it will maximize the after-tax value for Lilly shareholders and also allow the company to focus on its core pharmaceuticals business.
Merck’s Keytruda Succeeds in Head & Neck Cancer Study: Merck MRK announced that a pivotal phase III KEYNOTE-048 study evaluating Keytruda as a monotherapy for first-line treatment of recurrent or metastatic head and neck squamous cell carcinoma (HNSCC), met the primary endpoint. Interim data from the study showed that Keytruda significantly improved overall survival rates in such patients whose tumors expressed PD-L1 compared to the current standard of care for first-line HNSCC – cetuximab in combination with cisplatin or carboplatin. The co-primary endpoint of progression-free-survival (PFS) was not reached at the time of the interim analysis by the independent Data Monitoring Committee (DMC). (Read more: Merck's Keytruda Improves Survival in Head/Neck Cancer Study)
Meanwhile, Keytruda was approved in China for the treatment of adult patients with unresectable or metastatic melanoma following failure of one prior line of therapy. This makes Keytruda the only PD-L1 inhibitor approved in China for advanced melanoma.
Pfizer’s Biosimilar Neupogen Gets FDA Nod: Pfizer gained FDA approval for Nivestym, its biosimilar version of Amgen’s neutropenia drug, Neupogen. Nivestym, which is expected to be launched at a discount to the wholesale acquisition cost (WAC) of branded drug, is indicated to reduce the risk of infections in cancer patients receiving chemotherapy. Nivestym becomes Pfizer’s fourth biosimilar product to be approved by the FDA. Novartis’ generic arm Sandoz and Teva already market biosimilar versions of Neupogen.
Pfizer also said that it is investing $465 million to build a sterile injectable manufacturing facility in Michigan. The estimated 400,000-square-foot production facility will create an estimated 450 new jobs in the area over the next several years. This investment is part of Pfizer’s plan to invest $5 billion in capital projects in the United States.
FDA Action on Glaxo’s Products: Glaxo gained FDA approved for Krintafel (tafenoquine), a single-dose medicine to prevent the relapse of P. vivax malaria. This first single dose medicine for malaria can be given to patients aged 16 years and older who are already receiving appropriate antimalarial therapy for the infection.
Glaxo announced that an FDA advisory committee recommended against approving label expansion of its asthma drug Nucala for a new indication – chronic obstructive pulmonary disease (COPD). Glaxo is looking to get Nucala approved as an add-on treatment to inhaled corticosteroid-based maintenance treatment for the reduction of exacerbations in COPD patients with guided by blood eosinophil counts. The committee recommended that risk-benefit profile of Nucala, demonstrated in studies, was not adequate to support approval
Glaxo also announced that it is investing $300 million in a genetic-testing company 23andMe. The company signed a four-year collaboration with 23andMe to discover novel drug targets using human genetics.
The NYSE ARCA Pharmaceutical Index rose 2.7% in the last five trading sessions.
Here is how the seven major stocks performed in the last five trading sessions:
.jpg)
All the stocks recorded increases, except Glaxo, which declined 0.8%. Lilly recorded the highest increase of 6.4%.
In the past six months, Lilly has been the biggest gainer (8.6%) while Bristol-Myers declined the most (10.1%).
(See the last pharma stock roundup here: Pharma Stock Roundup: JNJ & NVS’ Q2 Earnings, FDA Approvals)
What's Next in the Pharma World?
Watch out for the earnings results of Pfizer and other pipeline and regulatory updates next week
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment