Big Pharma AbbVie ( ABBV ) said Tuesday that a recently licensed drug candidate succeeded in a phase-two trial of Crohn’s disease, as the company seeks to refresh its blockbuster immunology franchise. In the late morning at the Digestive Disease Week conference in San Diego, AbbVie’s researchers presented results from an ongoing phase-two study of risankizumab, a drug AbbVie licensed from Boehringer Ingelheim during the first quarter, in Crohn’s disease. They said that after 12 weeks of treatment, 24% to 37% of patients were in remission — depending on the dose — compared with just 15% in the placebo group. The treated group also had fewer adverse events than the placebo group. Risankizumab is one of a newer group of drugs targeting interleukins, small proteins in cells associated with inflammation, among the proteins is TNF, or tumor necrosis factor. “These results are particularly encouraging because of the difficult-to-treat population within the study,” researcher Brian Feagan said in a statement. “Our patients had endoscopically confirmed moderate or more severe disease activity at study entry and the majority had previously failed treatment with one or more TNF antagonists.” The most popular TNF blocker happens to be Humira, AbbVie’s flagship drug treating Crohn’s disease as well as other immunological conditions like rheumatoid arthritis and psoriasis. Humira’s patents are under fire , however, and last week AbbVie’s stock tumbled when the patent board agreed to review a challenge to a methods patent brought by Coherus BioSciences ( CHRS ). Other drugs targeting interleukins include Novartis ‘ ( NVS ) Cosentyx, launched early last year for psoriasis, as well as Eli Lilly ‘s ( LLY ) Taltz, approved for psoriasis in March. Those drugs target interleukin (IL) 17, while risankizumab targets IL-23 through a novel mechanism of action. “The efficacy of this drug looks to be as good (as), or perhaps even better than IL-17,” Evercore ISI analyst John Scotti said in a video for clients recorded May 3. “And remember, Cosentyx peak sales in consensus right now are about $4 billion.” AbbVie stock was up 2.5% in afternoon trading on the stock market today , near 61, and shares in the past week have found support at the 50-day moving average line.
Hedge funds fled equities in the first quarter, with Apple ( AAPL ) and PepsiCo ( PEP ) the most-sold stocks, S&P Global Market Intelligence said in a report Wednesday . The top 10 hedge funds managed about $141 billion in equity holdings in Q1, down more than $18 billion from Q4 2015. The funds decreased the total number of stock positions held from 427 to 408, the fewest stock positions held since S&P Global Market Intelligence began tracking such data in 2014. It was the second consecutive quarter of equity sell-off by the large funds. Consumer discretionary and information technology stocks led the sell-off, with Apple ranked seeing the most selling for an individual stock last quarter. The major hedge funds sold $5.4 billion worth of Apple stock in Q1. Other top sells included PepsiCo ($1.8 billion), Amazon.com ( AMZN ) ($1.4 billion), Priceline ( PCLN ) ($1 billion) and Walgreen Boots Alliance ( WBA ) ($1 billion). The highest volume of buying among the top hedge funds occurred in Facebook ( FB ) stock, with a total of $2.3 billion in buys in the first quarter, S&P said. Other top buys included Broadcom ( AVGO ) ($1.5 billion), Alphabet ( GOOGL ) ($945 million), Eli Lilly ( LLY ) ($892 million) and Willis Towers Watson ( WLTW ) ($884 million). RELATED: As Growth Investors Flee Apple, Warren Buffett Sees Value Startup Bubble Bursting, Valuations Due For Reset, Analyst Says .
Big pharma Eli Lilly ( LLY ) issued mixed first-quarter earnings and guidance Tuesday, sending its stock down in early trading. Lilly’s earnings, excluding one-time items, shrank 5% from the year-earlier quarter to 83 cents a share, missing analysts’ consensus by 2 cents, according to Thomson Reuters. Revenue rose 5% to $4.87 billion, beating consensus by $45 million. Lilly added 5 cents to its 2016 EPS guidance range, now $2.68 to $2.78. It also raised its sales guidance slightly to $20.6 billion to $21.1 billion. At the same time, it shaved a percentage point off its gross-margin guidance, now 76%, as it also lifted its guidance for R&D and sales, general and administrative spending. Lilly stock was down nearly 2% in morning trading on the stock market today , below 77. Improved foreign-exchange rates were responsible for much of the upside, along with a 5-cent-a-share tax benefit in Q1. At the same time, the bottom line was hit by rising R&D expenses, including a $55 million milestone payment to biotech partner Incyte ( INCY ) upon the submission for approval of their jointly developed drug baricitinib. On the level of individual products, diabetes drug Humalog provided the biggest surprise, with its $606 million in Q1 sales falling 11% from the prior year and missing consensus by $100 million, according to Evercore ISI. Lilly said demand for the drug had actually increased, but so had rebates and discounts that Lilly negotiated with payers. Lilly said it does not expect the downtrend to continue the rest of the year. Revenue from a newer diabetes drug, Jardiance, doubled compared with last year, though since Lilly splits the take with partner Boehringer Ingelheim, it only received $38 million in Q1. U.S. sales beat expectations, and Lilly said it’s taking more share of the growing SGLT2 class of diabetes drugs, perhaps accounting for the underperformance of Johnson & Johnson ‘s ( JNJ ) SGLT2 drug Invokana, as shown in J&J’s Q1 report last week. Leerink analyst Seamus Fernandez wrote that while there were various upsides and downsides to the report, “we expect a limited impact as investor concerns about a significant Q1 miss diminish, and the focus shifts to abemaciclib data at ASCO (the American Society of Clinical Oncology meeting in June) and the conclusion of Expedition 3 (trial of solanezumab in Alzheimer’s disease) in Q4 2016,” he wrote in his research note.