Australia markets closed

Pharma Stock Roundup: JNJ's Q3 Earnings, RHHBY's Sales, FDA Nod to Lilly's Reyvow

Kinjel Shah

This week marked the start of the third-quarter earnings season for the pharma space with J&J JNJ releasing its earnings. Roche RHHBY reported sales results for the first nine months of the year. Meanwhile, the FDA granted approval to Lilly’s LLY Reyvow (lasmiditan) oral tablets for migraine as well as J&J/Bayer’s BAYRY oral anticoagulant, Xarelto and Roche’s flu treatment Xofluza for expanded patient populations.

Recap of the Week’s Most Important Stories

J&J Surprises in Q3: J&J beat third-quarter estimates for both earnings and sales and raised its guidance for the year.

Third-quarter earnings of $2.12 per share increased 3.4% from the year-ago period. Sales of $20.73 billion rose 1.9% from the year-ago quarter, reflecting an operational increase of 3.2%, which offset an unfavorable currency impact of 1.3%. Importantly, J&J’s Pharma segment recorded a surprising sales increase despite currency headwinds and the impact of biosimilar and generic competition on sales of some key drugs like Remicade and Zytiga.

Roche Reports Strong Sales: Roche recorded sales of CHF 46.1 billion in the first nine months of 2019, up 10% from the year-ago quarter. The strong sales performance was led by rising demand for new drugs amid biosimilar competition for legacy drugs. Consequently, the company also raised its sales guidance for 2019 for the third consecutive time this year.

Meanwhile, the FDA granted approval to its antiviral medicine Xofluza for patients at high risk of developing serious complications from influenza. People with chronic conditions like asthma, chronic lung disease, heart disease and diabetes are generally at a high risk of developing serious complications from influenza. Xofluza is currently marketed for the treatment of influenza types A and B.

Also, Roche’s phase III study comparing MabThera/Rituxan to mycophenolate mofetil (MMF) to treat patients with a rare autoimmune condition called pemphigus vulgaris met the primary endpoint. Data from the study showed that MabThera/Rituxan was superior to MMF, which is a commonly used, unapproved treatment for PV. Of the total patients, 40.3% in the MabThera/Rituxan arm achieved sustained complete remission (CR) from painful blistering without the use of steroids for 16 consecutive weeks or more compared to 9.5% of those treated with MMF.

FDA Approves Lilly’s New Migraine Tablet, Pancreatic Cancer Study Fails: The FDA granted approval to Lilly’s lasmiditan oral tablets to treat acute migraine, with or without aura, in adults. Lasmiditan will be marketed by the trade name of Reyvow and will be available in doses of 50 mg, 100 mg, and 200 mg, once launched. The new drug application for Reyvow was based on data from two phase III studies, SAMURAI and SPARTAN. Reyvow’s approval has boosted Lilly’s portfolio of pain medicines, which also includes the recently launched, Emgality.

Lilly’s late-stage study (SEQUOIA) evaluating its pipeline candidate, pegilodecakin plus Folfox to treat patients with metastatic pancreatic cancer did not meet primary endpoint of overall survival. Pegilodecakin, a PEGylated IL-10, was added to Lilly’s portfolio with the June 2018 acquisition of ARMO BioSciences for $1.6 billion. It is also being evaluated in mid-stage stage studies in combination with checkpoint inhibitor in non-small cell lung cancer.

FDA Approves New Use of J&J/Bayer’s Xarelto: J&J and Bayer announced that the FDA has approved their oral anticoagulant, Xarelto (rivaroxaban) for the prevention of venous thromboembolism or blood clots in hospitalized acute medically ill patients. The approval was based on data from two studies MAGELLAN and MARINER.

FDA’s Priority Review to AstraZeneca’s Breast Cancer Candidate: The FDA accepted and granted priority review to AstraZeneca’s AZN biologics license application seeking approval for its innovative antibody drug conjugate candidate, trastuzumab deruxtecan to treat patients with refractory HER2-positive metastatic breast cancer. The FDA decision is expected in the second quarter of 2020. AstraZeneca acquired joint development and commercialization rights to this promising cancer candidate from Japan’s Daiichi Sankyo in April this year.

Allergan Shareholders Approve Merger with AbbVie: Allergan’s AGN shareholders gave a green signal to its pending merger with AbbVie ABBV for a transaction value of nearly $63 billion. Allergan said that approximately 68.6% of shareholders eligible to vote at Allergan’s extraordinary general meeting of shareholders as well as a special court-ordered meeting of shareholders voted in favor of the transaction. Allergan announced the definitive transaction to be acquired by AbbVie in a cash-and-stock deal in June this year. The acquisition is expected to be closed by early 2020, if all necessary approvals are obtained.

The NYSE ARCA Pharmaceutical Index rose 2.4% in the last five trading sessions.

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 five trading sessions.

Last week, all stocks were in the green, except Merck which was flat. J&J was the biggest gainer (5.5%).

In the past six months, Bristol-Myers has risen the most (15.1%) while Pfizer lost the most (7.5%).

(See the last pharma stock roundup here: NVS’ New Eye Drug Gets FDA Nod, NVO, GSK, PFE Sign Deals)

What's Next in the Pharma World?

Watch out for third quarter results of Lilly, Novartis and AstraZeneca and regular pipeline and regulatory updates next week.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>

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
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Bayer Aktiengesellschaft (BAYRY) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
AstraZeneca PLC (AZN) : Free Stock Analysis Report
Allergan plc (AGN) : Free Stock Analysis Report
Roche Holding AG (RHHBY) : Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research