Big-cap drugmakers Regeneron Pharmaceuticals ( REGN ) and Merck ( MRK ) were moving in opposite directions in Thursday trading after their Q1 earnings reports, though both companies raised guidance. Regeneron’s quarterly revenue rose 38% over the year-earlier period to $1.2 billion, beating analysts’ consensus by about $240 million, according to Thomson Reuters. Earnings of $2.57 a share were a penny short of estimates and down 11% from last year’s Q1. But on the crucial metric of U.S. sales of flagship drug Eylea, Regeneron reported 44% growth to $781 million, beating consensus by $11 million, and the company raised its full-year growth estimate to 20% to 25% vs. its previous 20%. The earnings miss stemmed from higher spending for selling, general and administrative costs, though spending guidance for the year remained unchanged. Also, cholesterol drug Praluent, which was launched last July, missed consensus again, but its numbers remained small ($13 million) as the company awaited the results of a cardiovascular outcomes trial of both Praluent and rival Amgen ‘s ( AMGN ) Repatha later this year. Regeneron said that payer coverage for Praluent is good so far, with 74% of the commercially insured and 91% of those on Medicare having access to the drug. Regeneron stock was up 5% in midday trading on the stock market today , near 380. Merck Reports Mixed Quarter Merck posted earnings of 89 cents a share, up 5% from the year-earlier period and beating consensus by 4 cents. Sales declined 1% to $9.31 billion, missing Wall Street’s number by $150 million. Merck stock was down 1.5% midday Thursday, near 54. Merck added a few cents to its 2016 EPS guidance range, now $2.65 to $3.77, and also raised the low end of its revenue guidance, now $39 billion to $40.2 billion. Echoing a number of global pharmas this earnings season, Merck cited improving foreign-exchange rates. The revenue shortfall was spread around a number of different drugs, including blockbuster diabetes drug Januvia and immunology drug Remicade. More interesting to analysts was up-and-coming cancer drug Keytruda, which missed estimates in the U.S. but beat slightly worldwide, especially after rival Bristol-Myers Squibb ‘s ( BMY ) Opdivo beat consensus last week. Bristol-Myers also moved up its reporting date for a trial of Opdivo as a first-line treatment for lung cancer to Q3 from its previously guided Q4, eroding the advantage for Merck, which expects to report results for a similar trial of Keytruda at midyear. Both drugs are now approved only for previously treated patients, so first-line approval could significantly expand the market. Merck also reported $50 million in sales for its hepatitis C drug Zepatier, which just launched in late January. Although that’s tiny compared with the $2.1 billion reported by market leader Gilead Sciences ( GILD ), both Gilead and AbbVie ( ABBV ) said on their earnings calls last week that Merck’s aggressive discounting had affected their own businesses. Nonetheless, RBC Capital Markets analyst Michael Yee wrote that this may not have been directly responsible for Gilead’s miss. “(Merck) suggested negotiations for important parity access remain ongoing, with the exception of the Veterans Administration (10% of the market), which they have good access on … but interestingly suggested many of the commercial payor access deals are for 2017 impact, since 2016 contracts were already completed,” Yee wrote in a research note. “So what Gilead said about their lower sales in U.S. (being) mostly due to just higher gross-to-net from healthier patients coming in (not so much from competition) could be true, realizing price competition is still ongoing and coming and needs to be watched.”
Big-cap drug stocks Bristol-Myers Squibb ( BMY ) and Celgene ( CELG ) were both rising after their Q1 earnings reports early Thursday, though Celgene initially dropped as it delivered a long-expected guidance cut. Bristol-Myers reported earnings of 74 cents a share, minus one-time items, up 4% from the year-earlier quarter and beating analysts’ consensus by nine cents, according to Thomson Reuters. Revenue rose 9% to $4.39 billion, about $140 million above Wall Street’s average estimate. Bristol-Myers added 20 cents to its full-year EPS guidance, now $2.40 to $2.60. It expects revenue to grow in the low double-digit range, which would be the first time since 1997 that annual sales gained that much. Recently launched cancer drug Opdivo beat sales estimates by a substantial margin — $704 million vs. analysts’ $587 million — up from just $40 million in the year-earlier quarter. Anti-clotting drug Eliquis also handily beat expectations, with sales more than doubling to $734 million. Bristol-Myers stock was up more than 3% in afternoon trading on the stock market today , near 72.50, its highest point since October 1999. Celgene Sales Lag Expectations, But EPS Beats Celgene, meanwhile, reported Q1 sales of $2.51 billion, a 21% gain on last year’s Q1 but almost $60 million below consensus. On the other hand, EPS beat estimates by five cents, rising 23% to $1.32. Celgene added 10 cents to its full-year earnings guidance, now $5.60-$5.70 a share, and raised the low end of its product-sales guidance to $10.75 billion-$11 billion. However, it trimmed its 2017 guidance to account for foreign-exchange headwinds. It now expects sales of $12.7 billion to $13 billion, vs. $13 billion-$14 billion previously. Celgene also cut its EPS target to $6.75-$7.00 from $7.25. The company affirmed its previously issued 2020 guidance. Celgene stock dropped in early trading but was up more than 2%, above 108, by early afternoon Thursday. Wall Street had anticipated the 2017 guidance cut. “Investors will be looking for an update on 2017 guidance following the $700 million to $800 million FX headwind on top-line revenues mentioned on their 4Q 2015 call,” wrote Evercore ISI analyst Mark Schoenebaum in a preview note Wednesday. “Celgene neither revised nor reaffirmed 2017 guidance at that time and may provide an update to their current guidance.” On the conference call with analysts Thursday, Celgene’s management said that on a constant-currency basis, financials are tracking to hit their original targets.
On slate for Thursday are quarterly earnings reports from Amazon ( AMZN ), LinkedIn ( LNKD ), Baidu ( BIDU ) and Gilead Sciences ( GILD ) after the close. Before the market open, investors will get their first look at first-quarter economic growth. Amazon The e-commerce giant is expected to earn 58 cents a share in Q1, swinging to a profit from a 12-cent loss last year. Revenue is projected to climb 23% to $27.99 billion. Last quarter, Amazon fell well short of earnings estimates and came up light on revenue, sending shares down as much as 32% from their high in the following weeks. But its cloud computing division, Amazon Web Services, is a bright spot. It hauled in $2.4 billion in revenue for the quarter, up 69% year over year. Shares are flirting with being within the lower boundary of a buy range from a cup-with-handle base with a 603.34 buy point, which it initially broke out of a few weeks ago. Amazon fell 1.7% to 606.57 after falling to 601.28 intraday. LinkedIn The professional social network’s earnings are projected to grow 5% to 60 cents ex items, a sharp drop from the 54% growth that it saw in the prior quarter. Revenue is expected to jump 30% to $828.5 million. Shares dropped 44% on LinkedIn’s last quarterly report, which showed weak Q1 guidance. LinkedIn stock has climbed off of its low, reached in the following days, and is now trading 54% below its 52-week high. Facebook Social networking leader Facebook ( FB ) crushed Q1 earnings and revenue projections late Wednesday, sending shares up 9% in late trade. If Facebook’s positive action continues into Thursday’s session, the stock will likely be in buy range from a cup-with-handle base with a 117.09 buy point. Baidu China Internet giant Baidu is projected to see Q1 EPS ex items fall 11% to 5.96 RMB (92 cents). Revenue is estimated to rise 24% to 15.83 billion RMB ($2.4 billion). Baidu’s mobile ecosystem is strong, according to ITG Research analyst Henry Guo. He said this week that his firm’s data indicates “that Baidu’s Mobile Search app dominates the mobile search market with more than 23% installation penetration among Chinese mobile users, well ahead of its key competitors Sogou Search (1.7%) and Qihoo 360 Technology ( QIHU ) Search (0.2%).” Baidu is trading just below buy range from a cup-with-handle base that it broke out of recently. It’s trading 13% below its 52-week high. Gilead Sciences The biotech’s earnings are estimated to rise 6% to $3.13 a share, slower than last quarter’s 37% growth. Revenue is seen rising 7% to $8.1 billion, also a deceleration from the prior quarter. Comparisons are getting tougher after Gilead earnings and sales skyrocketed on hepatitis C treatments. Gilead retook its 200-day line last week but breached that level in Wednesday’s session. Shares are trading 18% below their 52-week high. Fellow big-cap biotech Amgen ( AMGN ) also reports quarterly results Thursday, with analysts expected a 5% EPS gain. Amgen, which fell 1.1% to 161 on Thursday is near a buy point at 165.33 in cup-shaped base. Before the market open, biotechs Alexion Pharmaceuticals ( ALXN ) and Celgene ( CELG ) report, along with big pharma Bristol-Myers Squibb ( BMY ) and AbbVie ( ABBV ) makes a rival hepatitis C treatment. Q1 GDP After Q4’s OK but not great 1.4% gain, coupled with ongoing issues regarding a strong dollar, weak energy sector and sluggish manufacturing, weak growth is expected in Q1. Wall Street expects a scant 0.7% annualized gain.