Pharma Stock Roundup: LLY, NVO, BAYRY Q2 Earnings, SNY's TBIO Buyout, FDA Updates
This week Sanofi SNY agreed to buy Translate Bio, which specializes in messenger RNA technology, for $3.2 billion. Lilly LLY announced mixed second-quarter results. The FDA approved AstraZeneca’s AZN new lupus drug Saphnelo and also gave a priority review designation to Roche’s RHHBY supplemental biologics license application (sBLA) for its blockbuster lung cancer medicine, Tecentriq.
Recap of the Week’s Most Important Stories
Q2 Earnings Season Continues: Lilly’s second-quarter results were mixed as it missed estimates for earnings but beat the same for sales. Sales improved sequentially from the first quarter, reflecting a recovery from the impact of the pandemic as revenues from all key products grew in the quarter. However, lower revenues from Lilly’s COVID-19 antibody sales due to weak demand hurt sales in the quarter. Lilly tightened its previously issued sales forecast for 2021 while maintaining its earnings guidance range for 2021.
Novo Nordisk NVO beat estimates for both earnings and sales. Sales rose 17% at constant exchange rate (CER), driven by Diabetes and Obesity care sales. Sales in the Diabetes and Obesity Care segment sales grew 17% at CER. Sales in the Biopharm segment were up 13% at CER year over year. Sales are expected to rise 10%-13% at CER in 2021, higher than 6-10% expected previously.
Bayer BAYRY also beat estimates for both earnings and sales in the second quarter. Total sales rose 12.9% after adjusting for currency and portfolio effects (Fx & portfolio adjusted). In the agricultural business (Crop Science), sales rose 10.6% (Fx & portfolio adjusted) while in the prescription medicines (Pharmaceuticals) unit, sales rose 16.2%. Sales of self-care products (Consumer Health) rose 12.8%. Bayer also raised its sales growth expectations to 6% on a Fx & portfolio adjusted basis, up from 3% previously.
Sanofi to Buy Translate Bio $3.2B: Sanofi announced a definitive agreement to acquire its current partner for some pipeline candidates, Translate Bio, for $38.00 per share in cash, which represents a total equity value of approximately $3.2 billion. The acquisition, if successfully closed will allow Sanofi to leverage Translate Bio’s mRNA technology platform to develop therapeutics and vaccines and also accelerate development of their existing partnered pipeline programs. The transaction has been approved by the boards of both the companies.
Sanofi and Translate Bio formed a collaboration in 2018 to develop mRNA vaccines. The deal was further expanded in 2020 to make mRNA vaccines for several infectious diseases. The companies are also jointly developing a mRNA vaccine for COVID-19, which is in phase I/II study. Data from the study is expected in the third quarter.
A phase III study evaluating Libtayo combined with chemotherapy was stopped early based on a recommendation by the Independent Data Monitoring Committee (IDMC). The decision was taken as the study demonstrated significant improvement in overall survival in patients with first-line advanced non-small cell lung cancer. The Libtayo combination reduced the risk of death by 29% by increasing the median overall survival from 13 to 22 months.
FDA Approves AstraZeneca’s Lupus Drug: The FDA granted approval to AstraZeneca’s anifrolumab to treat moderate-to-severe systemic lupus erythematosus (SLE), the most common form of lupus. The drug will be marketed by the trade name of Saphnelo. The approval was based on data from two TULIP phase III studies and the MUSE phase II study.
FDA’s Priority Tag to Roche’s Tecentriq in Adjuvant Lung Cancer: The FDA granted priority review designation to Roche’s sBLA seeking approval for its blockbuster medicine, Tecentriq as an adjuvant therapy following surgery and chemotherapy in patients with non-small cell lung cancer (NSCLC) whose tumours express PD-L1≥1%. The FDA is expected to give its decision on the sBLA on Dec 1. The sBLA is being reviewed under the FDA’s Real-Time Oncology Review pilot programme and is based on results of the phase III IMpower010 study. Tecentriq is already approved for various forms of lung cancer.
FDA Lifts Clinical Hold on Novartis’s SMA Candidate: The FDA lifted the partial clinical hold placed on Novartis’ OAV-101 intrathecal (IT) clinical studies for spinal muscular atrophy (SMA) patients in October 2019. As a result, studies on the candidate may proceed. The decision to lift the hold was based on data from Novartis’ nonclinical toxicology study. Novartis now expects to begin a global pivotal phase III study, STEER, on OAV-101 IT in treatment-naïve patients with SMA type II aged between 2 and 18 years old.
Bayer Buys Vividion Therapeutics: Bayer announced the acquisition of private biotech Vividion Therapeutics for an upfront payment of $1.5 billion. Vividion will also be entitled to milestone payments of up to $500 million. The acquisition expands Bayer’s small molecule capabilities. Vividion’s proprietary discovery platform can identify drug candidates that can target proteins that are presently undrugabble and is presently developing therapies against cancers and immune disorders.
Pfizer’s Alopecia Areata Candidate Meets Goal in Study: Pfizer’s PFE phase IIb/III ALLEGRO study on JAK3 inhibitor, ritlecitinib for severe alopecia areata met the primary efficacy endpoint of improving scalp hair regrowth. The data showed that patients treated with ritlecitinib 30 mg or 50 mg once-daily for 24 weeks, with or without a four-week initial treatment of 200 mg once-daily, experienced 20% or less scalp hair loss.
Merck’s Keytruda Melanoma Study Meets Goal: Merck’s phase III KEYNOTE-716 study evaluating Keytruda as an adjuvant therapy for patients with stage II resected high-risk melanoma, met its primary endpoint of recurrence-free survival (RFS). Interim data from the study showed that treatment with Keytruda led to a statistically significant and clinically meaningful improvement in RFS compared with placebo as an adjuvant therapy in this patient group. Based on these data Merck filed a new supplemental biologics license application (sBLA) seeking approval of Keytruda for the adjuvant treatment of adult and pediatric (12 years and older) patients with stage IIB or IIC melanoma following complete resection. The FDA accepted and granted priority to the BLA review, with a decision expected on Dec 4.
The NYSE ARCA Pharmaceutical Index rose 2.1% in the last five trading sessions.
Large Cap Pharmaceuticals Industry 5YR % Return
Large Cap Pharmaceuticals Industry 5YR % Return
Here’s how the eight major stocks performed in the last five trading sessions.
Image Source: Zacks Investment Research
In the last five trading sessions, Lilly rose the most (7.7%) while AbbVie’s stock declined the most (3.2%).
In the past six months, Pfizer has recorded the maximum gain (29.4%) while Merck has seen the least gain (0.8%)
(See the last pharma stock roundup here: Q2 Earnings of MRK, PFE & Others, FDA Approvals for GSK, ABBV)
What's Next in the Pharma World?
Watch out for regular pipeline and regulatory updates next week.
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Sanofi (SNY) : Free Stock Analysis Report
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Roche Holding AG (RHHBY) : Free Stock Analysis Report
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Novo Nordisk AS (NVO) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
Bayer Aktiengesellschaft (BAYRY) : Free Stock Analysis Report
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