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Pharma Stock Roundup: JNJ's Q1 Earnings, Coronavirus Product Development Efforts

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Kinjel Shah
·6 min read
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J&J JNJ set in motion the first-quarter earnings season for the Pharma sector. It posted strong first-quarter results, beating estimates for both earnings and sales. However, J&J lowered its financial outlook for 2020 for coronavirus-related uncertainty. Meanwhile, Lilly LLY, Pfizer PFE, AstraZeneca AZN, Sanofi SNY and Glaxo GSK provided updates on their plans to make therapies/vaccines to treat coronavirus disease, COVID-19.  The FDA approved AstraZeneca’s Koselugo (selumetinib) for the treatment of a rare genetic condition.

Recap of the Week’s Most Important Stories:

J&J Beats on Q1 Earnings& Sales, Cuts View: J&J kicked off the first-quarter earnings season for the Pharma sector. It posted strong first-quarter results, beating estimates for both earnings and sales and raised its quarterly dividend. Its blockbuster drugs, Imbruvica, Darzalex and Stelara pulled up sales of its Pharmaceuticals unit. Meanwhile, increased demand for basic medicines and products like Tylenol analgesics and Listerine mouthwash increased sales of its Consumer Healthcare segment. However, widespread decline in elective surgical procedures due to the coronavirus outbreak led to a decline in sales at its Medical Devices unit.

However, as expected, J&J lowered its adjusted earnings and sales outlook for 2020 for coronavirus-related uncertainty and costs related to investments that the company is making to combat the disease.

FDA Approves AstraZeneca’s Koselugo, To Begin Coronavirus Study on Calquence: The FDA granted approval to AstraZeneca and Merck’s MRK MEK 1/2 inhibitor Koselugo (selumetinib) for the treatment of pediatric patients with neurofibromatosis type 1 (NF1) related plexiform neurofibromas (PN), a rare and debilitating  genetic condition. The approval was based on positive data from the SPRINT Stratum 1 phase II study. A marketing authorization application seeking approval of Koselugo for the same indication has already been submitted in Europe.

AstraZeneca also announced that it will initiate a study (CALAVI) to evaluate the effect of its leukemia drug, Calquence on the exaggerated immune response of patients hospitalized with COVID-19 infection. The goal of the study is to demonstrate that adding Calquence to best supportive care reduces the need to place patients on ventilators and reduces mortality rates. Early clinical data from studies on Calquence, a BTK inhibitor, demonstrated that the protein BTK regulates inflammation and thus it appears that Calquence may reduce the severity of COVID-19-induced respiratory distress. This is the basis for initiating the CALAVI clinical study. The study will soon open for enrolment of patients in the United States as well as several European countries.

Calquence is approved to treat previously treated mantle cell lymphoma (MCL) and chronic lymphocytic leukemia indication (in frontline as well as relapsed/recurrent disease setting).

Meanwhile, an Independent Data Monitoring Committee (IDMC) recommended earlier-than- expected unblinding on AstraZeneca’s phase III ADAURA label expansion study on its successful EGFR inhibitor, Tagrisso. The study, which tested Tagrisso for adjuvant treatment of early-stage EGFR-mutated non-small cell lung cancer (NSCLC), showed statistically significant and clinically meaningful benefit in this patient population. Tagrisso is presently marketed for first-line EGFR mutated advanced NSCLC.  The study will continue to assess the secondary endpoint of overall survival.

Lilly’s Olumiant to Be Studied for Severe Coronavirus: Lilly announced that the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), will evaluate its JAK inhibitor, Olumiant (baricitinib), as a potential treatment for hospitalized patients diagnosed with COVID-19.The drug will be evaluated in one of the arms of NIAID's Adaptive COVID-19 Treatment study, which will evaluate Olumiant, now marketed for rheumatoid arthritis, as a potential treatment for hospitalized patients diagnosed with COVID-19. The study will first begin this month in the United States and then expand to additional sites in Europe and Asia. Data from the studies are expected in two months’ time.

Alongside, Lilly announced that it will advance LY3127804, its monoclonal antibody that inhibits Angiopoietin 2 (Ang2), to phase II studies in pneumonia patients hospitalized with COVID-19 who are at a higher risk of progressing to acute respiratory distress syndrome (ARDS).  Ang2 is found in high levels in ARDS patients and the study will test if LY3127804 can inhibit the effects of Ang2 and reduce the progression to ARDS or the need for mechanical ventilation in COVID-19 patients. The phase II studies will begin later this month.

Pfizer to Begin Clinical Study on COVID-19 Vaccine in April: Pfizer and BioNTech said that they expect to initiate clinical studies on their COVID-19 vaccine candidate by the end of this month. The companies will jointly conduct clinical studies on the vaccine candidate, initially in the United States and Europe and then increase manufacturing capacity to supply the vaccine globally. The vaccines candidate is presently in pre-clinical testing. Pfizer said it has potential to supply millions of vaccine doses by the end of 2020 if they receive the necessary regulatory approvals. Thereafter, they can rapidly scale up capacity to produce hundreds of millions of doses in 2021. For the collaboration, Pfizer will make an upfront payment of $185 million to BioNTech, which includes an equity investment of approximately $113 million in the Germany-based company.

Meanwhile, Pfizer is also working to develop an investigational antiviral compound to treat COVID-19. It has identified anti-viral compounds that showed activity against SARS-CoV-2 in preclinical screening. The company plans to start a potential clinical study of the lead molecule in the third quarter 2020, 3-4 months earlier than expected.

Sanofi & Glaxo Come Together for COVID-19 Vaccine: Meanwhile, two of the world’s biggest vaccine companies, Sanofi and Glaxo signed a letter of intent to combine their innovative technologies to develop an adjuvanted COVID-19 vaccine. The vaccine candidate is expected to enter clinical studies in the second half of 2020. The vaccine, if successfully developed, will be available in the second half of 2021.

Sanofi also signed an agreement with Luminostics, a California-based startup for developing a breakthrough COVID-19 smartphone-based self-testing solution based on the latter’s proprietary technology.

The NYSE ARCA Pharmaceutical Index rose 4.1% in the last four trading sessions.

Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return
Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

 

Here is how the seven major stocks performed in the last four trading sessions.

Last week, all the stocks were in the green with AstraZeneca recording the highest increase (10%).

In the past six months, Lilly has risen the most (42.4%) while Merck declined the most (2%).

(See the last pharma stock roundup here: JNJ & SNY’s Coronavirus Product Development, Other Updates)

What's Next in the Pharma World?

Watch out for Roche, Sanofi and Lilly’s earnings and regular pipeline and regulatory updates next week.

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Johnson & Johnson (JNJ) : Free Stock Analysis Report
 
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