Celgene Corp., Biogen Inc., Bristol-Myers Squibb Co. and AbbVie Inc. are all scheduled to report earnings this week.
second-quarter results are dropping during an uncertain time in the biopharmaceutical industry. Companies are facing several potential changes in health policy, including a proposal to shift the risk of Medicare Part D catastrophic coverage from patients and the federal government to health plans and manufacturers.
Read: Health stocks under pressure in wake of Trump plan to issue executive order on drug pricing and Trump administration preparing executive order on health-cost disclosure, regional hospital monopolies
Biopharma companies, many of which rely on just one or two drugs for a big chunk of revenue, are also facing increasingly fierce generic competition. Investors want to know how these companies will grow their pipelines as the patents expire on their biggest sellers. Some companies have decided to buy up other drugmakers developing promising products. AbbVie, whose best-selling Humira is facing increasing competition in Europe, announced in June that it was acquiring Botox-maker Allergan Plc
Bristol-Myers announced in January that it would be buying Celgene Corp., and Biogen recently closed its acquisition of gene-therapy company Nightstar Therapeutics.
Here’s what investors should expect:
Biogen is scheduled to report second-quarter earnings before the opening bell on Tuesday. The drugmaker, which suffered a devastating trial failure of an investigational Alzheimer’s drug in March, is expected to report earnings of $7.53 a share, a 30% increase from $5.80 a share in the year-earlier quarter, according to analysts polled by FactSet.
Analysts expect sales to come in at $3.475 billion, compared with $3.357 billion in the year-earlier quarter. Biogen’s best-selling drug, multiple-sclerosis drug Tecfidera, should bring in $1.098 billion, slightly more than $1.087 billion a year ago.
Shares of Biogen have fallen 23% so far this year, plunging nearly 30% in late March to $216.71 a share when the company announced it was abandoning its late-stage trials of aducanumab, an investigational Alzheimer’s drug many thought would be the Biogen’s next blockbuster medication. The stock is now trading at around $231 a share.
“Biogen’s long-term growth prospects remain mixed,” analysts at Cowen wrote in a Thursday note to clients. They think the company’s second-quarter results should at least meet consensus figures, but are uneasy about increasing competition in the spinal muscular atrophy and multiple sclerosis spaces. Tecfidera is up against a substantial patent threat from Mylan NV
and Biogen’s second-best seller Spinraza, an SMA drug, could lose market share to Roche Holding Ltd’s
investigational drug risdiplam and Novartis AG’s
Bristol-Myers Squibb and Celgene
Most recent news about Bristol-Myers has been about its pending acquisition of biotech Celgene Corp.
The merger was announced in January, but closing has been delayed due to anti-competitive concerns raised by the U.S. Federal Trade Commission.
The drugmaker is now looking to sell off one of Celgene’s star products, the anti-inflammatory drug Otezla, which it hopes will address federal regulators’ concerns. Otezla brought in $1.6 billion in sales in 2018 and was projected to bring in more than $2 billion by 2020. The loss of such a sales generator will be a blow, but the sale could also provide a significant infusion of cash to the combined company. RBC Capital Markets recently estimated that Otezla could be worth around $8 billion in a sale.
Bristol-Myers, scheduled to announce second-quarter results on Thursday before the market opens, is expected to report earnings of $1.07 a share, up from $1.01 a share in the year-earlier quarter. Analysts polled by FactSet expect sales to rise to $6.109 billion from $5.704 billion a year ago, with the company’s best-selling drug Eliquis expected to contribute $1.972 billion compared with $1.650 billion a year ago. Sales of Opdivo, another blockbuster drug, should rise to $1.815 billion from $1.627 billion a year ago.
Bristol-Myers stock has fallen 16.6% so far this year, partially due to investors’ anxiety over the Celgene acquisition. In contrast, shares of Celgene have soared 40.7% so far this year. The company, scheduled to announce second-quarter earnings after the market closes Monday, is expected to report earnings of $2.63 per share, up from $2.16 per share a year ago, according to analysts polled by FactSet. Sales should come in at $4.235 billion, up from $3.814 billion in the year-earlier quarter, with Revlimid, Pomalyst and Otezla leading the way. Revlimid is the company’s best-selling drug, and FactSet analysts expect it will bring in revenue of $2.701 billion, an increase from $2.453 billion a year ago.
AbbVie is scheduled to report second-quarter earnings on Friday. The company has received a lot of attention lately, thanks to its June announcement that it would be buying Allergan Plc
AbbVie’s stock plunged after the news, as analysts wondered how beneficial such a purchase would be for the company. Shares have fallen 25.7% so far this year.
Analysts polled by FactSet are expecting second-quarter earnings of $2.21 a share, compared with $2.00 a share a year ago. Sales are expected to fall to $8.097 billion from $8.258 billion, mostly due to lower sales of best-selling medication Humira, a biologic drug that treats autoimmune conditions like rheumatoid arthritis. Analysts predict Humira sales of $4.812 billion, a 7.2% drop from $5.185 billion in the year-earlier quarter.
Sales of Humira made up 61% of the company’s revenue in 2018. AbbVie has warned investors that sales will likely drop by $2 billion this year due to competition from lower-cost biosimilars in Europe from rivals like Mylan and Amgen Inc.
“On the Q2 earnings conference call, we expect the company to discuss the ongoing commercial trends for Humira, Imbruvica, and Venclexta including share dynamics in their disease indications and treatment lines,” analysts led by SVB Leerink’s Geoffrey Porges wrote in a note last week. They also said they wanted to hear about how the launches of psoriasis treatment Skyrizi, approved in April, and endometriosis drug Orilissa, approved last July, were coming along.
But the biggest question they have has to do with what AbbVie will do with Allergan, and what may have to be sold off to push the deal through.
“We will be eager to hear what AbbVie will discuss regarding their acquisition of Allergan, and potential divestitures that may be required by the FTC,” SVB Leerink analysts wrote.
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