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Pharma Stock Roundup: MRK & Others Post Q1 Results, LLY Drug Shines in Obesity Study

This week, the first-quarter earnings season picked up pace with several drugmakers like Merck MRK, Eli Lilly LLY, AstraZeneca AZN, AbbVie, Novartis and Sanofi SNY announcing their quarterly results. Lilly also announced exceedingly positive late-stage data from a study in obesity as it fast approaches potential approval for its diabetes drug Mounjaro for the obesity indication. J&J JNJ is looking to raise as much as $3.5 billion in the initial public offer (IPO) of its Consumer Health segment, Kenvue.

Recap of the Week’s Most Important Stories

Earnings Update: Merck’s first-quarter results were better than expected as it beat estimates for earnings as well as sales. Strong sales of key products, Keytruda and Gardasil vaccine drove the top line in the quarter. While sales of blockbuster cancer drug, Keytruda sales rose 24%, excluding Fx impact, sales of HPV vaccine, Gardasil rose 43%. Merck also raised its full-year sales and profit outlook, citing strong global underlying demand for its key products.

Lilly reported mixed results for the first quarter of 2023, missing earnings per share estimates while beating the same for revenues. Excluding revenues from COVID-19 antibodies, its sales rose 10% on the back of volume growth from Mounjaro, Trulicity, Verzenio and Jardiance. Lilly raised its previously issued revenue and earnings guidance for 2023.

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AbbVie’s first-quarter 2023 earnings and sales beat estimates. AbbVie’s sales declined 9.7% year over year. This is because sales of the flagship drug Humira declined almost 25% due to the recent loss of exclusivity in the United States. Key new drugs Skyrizi and Rinvoq underperformed in the quarter. AbbVie raised its earnings guidance for 2023. The company now expects adjusted EPS in the range of $10.72-$11.12, compared with the previously provided range of $10.62-$11.02

AstraZeneca’s first-quarter results were mixed as it beat estimates for earnings but missed the same for sales. Higher sales of key medicines like Tagrisso, Imfinzi, Lynpaza and Farxiga were offset by a steep decline in sales of AstraZeneca’s COVID products. Excluding, COVID products, total revenues increased 15% and product sales increased 16%. AstraZeneca maintained its financial guidance for 2023. It expects total revenues to increase in the low-to-mid single-digit percentage in 2023 at CER, including its COVID products. Excluding COVID products, total revenues are expected to increase in the low double-digit percentage.

Sanofi’s quarterly results were mixed as it beat estimates for earnings but missed the same for sales. Dupixent continued its strong performance in the quarter with sales rising 39.7% at a constant exchange rate. Sanofi maintained its adjusted earnings growth guidance of a low single-digit range at CER in 2023.

Novartis beat estimates for both earnings and sales. Sales in the Innovative Medicines unit rose 7% at constant currency, driven by the continued strong performance of Entresto, Pluvicto, Kesimpta and Kisqali, partly offset by generic competition mainly for Gilenya. Sales in the Sandoz division rose 8%, driven by a strong performance in Europe. The planned spin-off of the Sandoz unit remains on track for the second half of 2023. The company raised its financial guidance for 2023. Sales are now expected to grow in the mid-single digits, up from the previous guidance of low-to-mid-single digits. Core operating income is expected to grow in a high-single-digit range, up from the previous guidance of growth in the mid-single-digit range in 2023.

Lilly’s Second Obesity Study on Tirzepatide Shows Positive Outcome: Lilly’s tirzepatide, its dual GIP and GLP-1 receptor agonist, showed “superior weight loss” in the 72-week phase III SURMOUNT-2 study. In the study, for the efficacy primary endpoint, treatment with a higher dose of tirzepatide, 15 mg, led to up to 15.7% (34.4 lb. or 15.6 kg) weight reduction in obese or overweight adults with type II diabetes. Moreover, 86.4% of the participants given tirzepatide 15 mg experienced at least 5% body weight reduction, which was the study’s other co-primary endpoint, compared to 30.5% in the placebo arm.

Tirzepatide also met all key secondary objectives in the study. SURMOUNT-2 is the second phase III study on tirzepatide to show superior weight loss reduction in obese or overweight patients. In the first study, SURMOUNT-1, treatment with tirzepatide led to up to 22.5% (52 lb or 24 kg) weight loss in obese or overweight adults with at least one comorbidity, who did not have diabetes. Results of the SURMOUNT-1 study were announced last year

Eli Lilly intends to complete its rolling submission of a new drug application (NDA) for tirzepatide in obesity in the coming weeks, following positive data from the SURMOUNT-2 study. Lilly presently markets tirzepatide by the name of Mounjaro for type II diabetes.

Lilly announced a definitive agreement to divest Baqsimi, its nasally administered glucagon for treating severe hypoglycemia in diabetes patients, to Amphastar Pharmaceuticals. Global sales of Baqsimi were $139.3 million in 2022.

J&J Kicks Off Kenvue IPO Roadshow: J&J kicked off a roadshow for the IPO of its consumer health business. J&J plans to separate its Consumer Health segment into a new publicly-traded company to be called Kenvue. J&J is offering 151.2 million of its common stock at a price between $20.00 and $23.00 per share. J&J expects to raise as much as $3.5 billion in the IPO. Kenvue has applied to list its common stock on the New York Stock Exchange under the symbol “KVUE.” Kenvue’s valuation is expected to be approximately $43 billion.

The European Commission granted marketing authorization to J&J’s Akeega, which is a combination of Zejula (niraparib) and abiraterone acetate, plus prednisone in the form of a dual action tablet, for the first-line treatment of adult patients with metastatic castration-resistant prostate cancer with BRCA1/2 mutations. The approval of Akeega is based on results from the phase III MAGNITUDE study.

The NYSE ARCA Pharmaceutical Index declined 1.65% in the last five 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’s how the eight major stocks performed in the last five trading sessions.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

In the last five trading sessions, Lilly rose the most (up 4.1%), while AbbVie declined the most (8%).

In the past six months, Novartis has risen the most (26.5%), while Pfizer has declined the most (16.8%).

(See the last pharma stock roundup here: JNJ Beats on Q1 Earnings, MRK to Buy RXDX & Other Updates)

What's Next in the Pharma World?

Watch out for the Q1 results of Pfizer and Novo Nordisk and regular pipeline and regulatory updates next week.

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