Lilly, Roche, Merck & Co, Astrazeneca, Wyeth, Bristol-Myers

February 01, 2008 Results round up: Lilly, Roche, Merck & Co, AstraZeneca, Wyeth, Bristol-Myers

Amy Brown

Eli Lilly

Stronger than expected demand for across the board for Eli Lilly's drugs meant sales beat forecasts, with a 14% increase to $18.71bn, against consensus of $18.22bn.

Adjusted earnings per share climbed 17% to $3.54, in line with forecasts, and the company reassured investors by reiterating guidance for 2008. Excluding special items, earnings should rise to $3.85 to $4 per share, up 9-13%, driven by growing demand for drugs including Cymbalta, Cialis and Byetta.

Longer term, Lilly faces the US patent expiry of its five top selling drugs, accounting for 60% of sales, between 2010. Hence pipeline progress will be the key focus for the remainder of the year.

Blood thinner prasugrel, which if successful could be a significant remedy to Lilly’s woes, has a PDUFA date set for October 24, so pivotal news is some way off.

Nearer term, an FDA advisory committee on the long-acting intramuscular injection Zyprexa Adhera, which has raised some safety concerns, meets on February 6. A decision on approval from the EU is due in the first half of the year. Also in the first half, the FDA should provide an update to Symbyax for treatment-resistant depression, for which there are no drugs approved.

The potential of a further sizeable settlement in ongoing Zyprexa litigation, with a $1bn bill having been reported, will also dog the company this year.

Lilly shares have not moved significantly since 2007 results were reported, but lost 3.7% in total so far this year. The stock gained 2.5% in 2007.

Roche

Roche beat profit forecasts on the back of strong sales of cancer drugs, and said it would ramp up spending on R&D this year. It maintained guidance for 2008, saying it expects high single-digit sales increases this year, with both pharmaceuticals and diagnostics outpacing the market.

Core earnings per share rose 20% to SFr11.85, against forecasts of $11.37, while sales climbed 10% to SFr46.13bn, in line with expectations.

In terms of pipeline progress, CETP-inhibitor R1658 will move into phase III, and a decision on whether to move GLP-1 agonist R1583 into pivotal trials will be taken imminently.

Focus this year will remain on progress of expanding indications of already marketed drugs. In particular Avastin, which has been and will be filed in further indications, with an FDA decision on its approval in metastatic breast cancer is due on February 22.

Roche shares have advanced 5.4% since announcing results, and gained a total of 2.2% so far this year. The stock lost 10% in 2007. For a more in detailed review of Roche, see EP Vantage story ‘Roche shows size doesn’t matter’, January 30.

Merck & Co

Merck maintained guidance for 2008 despite the troubles with Vytorin which are likely to plague the drug maker this year. The company said there are about 50 civil class-action lawsuits pending already, alleging consumer fraud.

Adjusted earnings are seen rising to $3.28 to $3.38 per share this year, up from the $3.20 reported for 2007. That beat forecasts, mostly on the back of cost cuts. Annual sales of $24.2bn, up 7%, met expectations. Key products performed in line, except cervical cancer vaccine Gardasil, which missed forecasts in the final quarter.

For the remainder of the year, Vytorin will top the agenda for the US drug maker, with the outcome of reviews by the FDA and New York Attorney General key events.

Other pipeline news of interest will be the filing of MK-0524B for hyperlipidaemia, phase III results from obesity pill taranabant, and potentially a filing, and an update on the over-the-counter statin Mevacor, which received a non-approvable letter earlier this month.

Further on the horizon are US product approvals for Cordaptive for lipid disorders and Claritin and Singulair combination pill for allergic rhinitis, expected around the end of June.

Merck shares have lost 4% since announcing 2007 results, and 21% in total this year. The stock advanced 33% last year.

AstraZeneca

AstraZeneca reported a decline in annual profits, as expected, hurt in part by generic competition to key drugs, which is only set to exacerbate throughout the year.

Earnings fell 3% to $3.74 a share, as sales advanced 12% to $29.56. Earnings per share excluding restructuring and synergy costs were $4.38, and the company forecast a range of $4.40 to $4.70 this year. Considering the restructuring efforts on going, that disappointed some.

With the unlikely but potential launch of generic versions to stomach acid drug Nexium and anti-psychotic Seroquel, things could go horribly wrong for AstraZeneca this year. The group also flagged the possibility of large tax bill from the US government, and upped reserves to cover it.

Nexium is already being hurt by generic versions of similar drugs, and sales fell 2% last year, and 4% in the US. Further pressure is just round the corner with the recent launch of multiple copycat versions of Protonix, another close competitor.

To fill its pipeline AstraZeneca predicted that it would bring on average two new medicines to the market a year from 2010, earlier than a previous forecast of 2013. Pipeline events this year include the anticipated US filing of Numax for respiratory syncytial virus in the first quarter, and phase III results from Saxagliptin in diabetes and a Crestor combination pill.

Shares in AstraZeneca have fallen 2.3% since the results, and lost 4.3% so far this year. The stock lost 21% in 2007.

Wyeth

Wyeth forecast a significant hit from the loss of heartburn drug Protonix this year, and predicted that sales would be flat and earnings would fall 1% to 5%, to $3.35 to $3.49 per share.

Following the launch of Teva’s generic version of the drug, Wyeth announced this week that it would start selling its own generic. Sun Pharma have since also decided to launch a generic version 'at risk'. Sales of the drug climbed 6% to $1.91bn last year, but will fall dramatically in the coming months.

Total group sales grew 10% to $22.4bn and adjusted earnings per Share increased 12% to $3.52, as forecast.

The earlier than anticipated loss of Protonix will heighten focus on Wyeth’s pipeline, which has suffered a number of delays and set backs over the last year.

The FDA should rule on MNTX for opioid induced bowel disorder by April 30, and Viviant for osteoporosis, which has already had an approvable letter, in the first half of the year. Progress on Pristiq, which received an approvable letter for depression and is also being developed for menopausal symptoms, should also come in April.

Wyeth shares have edged slightly higher since the results, but fallen 9.5% so far this year. The stock lost 13% last year.

Bristol-Myers Squibb

Bristol-Myers Squibb provided the curve ball of the weekly earnings, by announcing a $127m write down of securities exposed to sub-prime mortgages.

The actual results beat forecasts, boosted by higher than expected sales of Plavix, which has returned to growth after being hit by the temporary sale of generics. Sales jumped 177% to $1.37bn. Total group revenues rose 12% to $19.34bn. Adjusted earnings per share climbed to $1.38 from $1.01 last year, and the company provided guidance of $1.60-$1.70 for 2008.

Like its peers, the focus this year will be on pipeline progress, with an update on discussions with the FDA on ipilimumab in melanoma due.

Investors will also be waiting for phase III results from Saxagliptin, the DPP-IV diabetes drug being jointly developed with AstraZeneca, and further down the line, results from phase III trials of rheumatoid arthritis drug Orencia in ulcerative colitis, Crohn’s and Lupus will be available.

BMS shares initially fell on the results, but have recovered losses, for a 10% decline so far this year. Last year, despite climbing and falling significantly, the stock ended up little changed.