Tag Archives: biotech

Regeneron Up As Eylea Beats Views; Merck Down As Lead Drugs Slip

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.”

IBD 50: Ligand Pharma Beats Q1 Estimates, Buys Device Royalties

Ligand Pharmaceuticals ( LGND ), an  IBD 50 stock, rose early Wednesday after the small biopharma beat Q1 estimates and announced an acquisition that helped lift its guidance. Ligand reported earnings  excluding one-time items of 97 cents a share, more than triple the year-earlier number, beating analysts’ consensus by 30 cents, according to Thomson Reuters. Revenue rose 103% to $29.6 million, topping consensus by about $3 million. As described in a recent IBD  New America  story, Ligand’s business model is based on developing or acquiring technologies used in drug development and partnering with larger biotechs and pharmas that can make them into commercial products. Much of the growth in Q1 revenue came from the timing of milestone payments, along with the January acquisition of Open Monoclonal Technology, which licenses its biotech platform to drug developers. Ligand’s royalty payments grew thanks to the continued ramp of Amgen ’s ( AMGN ) blood-cancer drug Kyprolis and Novartis ’ ( NVS ) low-platelet treatment Promacta. Ligand also said it had agreed to pay $17.5 million for royalties on multiple programs from CorMatrix Cardiovascular, a privately held company that sells devices that help regrow human tissue. Ligand is guaranteed a minimum payment of $2.75 million annually, but says this is expected to double over time as CorMatrix rolls out new products. “CorMatrix’s existing and pipeline medical devices address market opportunities estimated to exceed $1 billion annually,” Ligand said in its press release . Ligand added $2 million to its 2016 revenue guidance, of which $1 million was expected to come from CorMatrix, bringing the range to $115 million to $119 million. That was still on the low side of Wall Street’s average estimate of $118.5 million, but EPS guidance beat Wall Street, at $3.41 to $3.46. Last year, the company made $3.37 a share on $71.9 million in revenue. It also guided 2017 slightly below consensus, with $160 million and EPS of $5.03. Ligand stock was up 2% in early trading on the stock market today , near 122. The stock is No. 18 on the current IBD 50 list of top-performing names over the past 12 months, with a strong Composite Rating of 93 despite somewhat light trading volume.

Biogen Spinning Off Hemophilia Business As Competition Heats Up

Big biotech Biogen ( BIIB ) said Tuesday that it will spin off its hemophilia business into an independent company in a move much anticipated by Wall Street. Biogen, which focuses mainly on neurological diseases, got into hemophilia with the 2014 launch of its two long-acting infusion treatments, Eloctate and Alprolix, for hemophilia A and B, respectively. It carved out some market share from leader Baxter International ( BAX ), but in mid-April press reports relayed rumors that Biogen was thinking of selling or spinning off the business. Baxter had already made a similar move when it spun off its hemophilia-focused biopharma arm as Baxalta ( BXLT ) last July. Baxalta was quickly snapped up by Shire ( SHPG ) in a $32 billion deal. Both Baxalta’s and Biogen’s infusion therapies are under potential threat from new gene therapies that might be able to cure the disease with a one-time treatment, or at least manage it with far fewer treatments. BioMarin Pharmaceutical ‘s ( BMRN ) early-stage trial results for its hemophilia gene therapy , reported last month, supported the method’s potential. Biogen’s press release mentioned that investment in research was one rationale for the spinoff. “The new company, to be named at a later date, will focus on the discovery and development of therapies for the treatment of hemophilia,” said the release. “The new company plans to bring longer-acting therapies utilizing the XTEN technology into clinical development in the first half of 2017 and to accelerate the development of bispecific antibodies and hemophilia-related gene therapy programs.” It added that the spinoff will also enable the remaining portion of Biogen to focus on its core multiple-sclerosis business, which has been struggling lately as shown in Biogen’s Q1 earnings  last month. Still, RBC Capital Markets analyst Michael Yee found the decision a bit puzzling. “Why would Biogen want to remove a growing and profitable, long-IP-duration biologics business that diversifies  Biogen and ‘dilutes’ the EPS when it’s removed?” he asked in a research note. “In addition, Biogen is not selling the business and bringing in cash (approximate $4 billion to $6 billion valuation), and prior to today, the question was what would they do with that cash and who would they buy (they aren’t getting cash in this deal). So this seems odd and perhaps implies the valuation is not what the Street perceives if a buyer was not willing to pay up.” Biogen stock was up a fraction in early trading on the stock market today , near 275. The stock has found support above its 50-day line.