Pharma Stock Roundup: Key Earnings Reports from Major Drugmakers

The third-quarter earnings season has reached a peak this week for major pharmaceutical companies, with Eli Lilly (LLY), Merck (MRK), Pfizer (PFE), AbbVie (ABBV), and Novartis (NVS) announcing their financial results for the quarter.

Here’s a summary of the most important events from the week.

LLY’s Weak Q3 Performance

Eli Lilly reported third-quarter results that fell short of expectations, missing targets for both earnings and revenue. The company also revised its financial guidance downward for the rest of the year. Key drugs, including Mounjaro, Zepbound, Jardiance, and Verzenio, did not meet forecasted sales numbers.

Total revenues for the quarter reached $11.44 billion, marking a 20% increase compared to the previous year. Sales of its diabetes treatment Mounjaro and weight management drug Zepbound were affected by inventory issues, with Mounjaro bringing in $3.11 billion, slightly up from $3.09 billion in the previous quarter, while Zepbound saw $1.26 billion in sales compared to $1.24 billion before.

As a result, Lilly adjusted its revenue guidance for the year from a previously expected range of $45.4 billion to $46.6 billion, now revised to between $45.4 billion and $46.0 billion. The earnings per share projection was also decreased from a range of $16.10 to $16.60 to $13.02 to $13.52 due to IPR&D charges.

Merck Surpasses Expectations Yet Lowers 2024 Outlook

Merck exceeded forecasts for both earnings and sales. Although earnings dipped by 23% annually (excluding currency effects), revenues increased by 7%. The sales of the cancer drug Keytruda grew by 17%, showing strong uptake in early-stage indications and sustained performance in metastatic cases. However, sales for the HPV vaccine Gardasil and Gardasil 9 dropped by 10% due to reduced demand from China, while sales of diabetes treatments Januvia/Janumet fell by 38%.

The company updated its sales guidance for 2024, now set between $63.6 billion and $64.1 billion, compared to a previous estimate of $63.4 billion to $64.4 billion. Adjusted EPS guidance was also lowered from $7.94-$8.04 to a new range of $7.72-$7.77.

In partnership with Moderna, Merck has begun a pivotal phase III study for a personalized mRNA cancer vaccine, V940/mRNA-4157, combined with Keytruda for lung cancer treatments.

Pfizer Beats Forecasts and Raises 2024 Expectations

Pfizer's achievements in the third quarter marked a significant performance boost, as the company surpassed predictions for both earnings and sales. Overall revenues grew by 32%, primarily due to robust sales of key non-COVID medications such as Vyndaqel and Eliquis. The company also benefited from new product launches and products acquired from Seagen. Additionally, sales of COVID-related products, particularly Paxlovid, helped fuel growth during a recent surge in COVID-19 cases.

Sales from Seagen drugs contributed $854 million to Pfizer's revenues during the quarter. Non-COVID product revenues grew by 14% operationally, continuing from a solid performance in the first half of the year. However, sales figures for Xeljanz and Ibrance declined.

Pfizer lifted its 2024 financial outlook following this strong quarter. Adjusted earnings guidance was increased from $2.45 to $2.65 per share to a new range of $2.75 to $2.95. The overall revenue guidance had also been raised from $59.5 billion-$62.5 billion to between $61.0 billion to $64.0 billion.

AbbVie Performs Well with Skyrizi and Rinvoq

AbbVie reported better-than-expected earnings and sales this quarter, with a 4.9% rise in operational sales, propelled by strong performances from its key products Rinvoq, Skyrizi, Venclexta, and Vraylar. Both Rinvoq and Skyrizi experienced spectacular increases in sales, at 47.4% and 51.5% respectively, owing to recent label expansions that include broader patient populations. AbbVie has revised its earnings per share guidance for 2024 to a range of $10.90-$10.94, a jump from a previous range of $10.67-$10.87.

Moreover, AbbVie has entered into an agreement to acquire Aliada for $1.4 billion, a biotech firm specializing in neuroscience medicines. Aliada’s lead candidate, ALIA-1758, targets Alzheimer’s disease and is currently in the phase I study stage. This deal is projected to close in the fourth quarter.

Additionally, AbbVie has collaborated with EvolveImmune Therapeutics to develop advanced cancer treatments, making a $65 million upfront payment, with potential for up to $1.4 billion in aggregate option fees and milestone payments.

Novartis Exceeds Expectations in Q3

Novartis completed the quarter by exceeding earnings and sales estimates, with sales rising by 10% on a constant currency basis. Key products such as Entresto, Kesimpta, Kisqali, Cosentyx, Pluvicto, and Leqvio contributed to this growth.

Core operating income also surged by 123%. In light of strong quarterly growth, Novartis adjusted its revenue projections upward for 2024, now predicting net sales will grow in a low double-digit range compared to previous expectations of a high-single to low-double digit range. Core operating income is now projected to grow in the high teens, compared to earlier expectations in the mid-to-high teens range.

The FDA has granted accelerated approval to Novartis’ Scemblix for expanded first-line use in treating Philadelphia chromosome-positive chronic myeloid leukemia. This approval is significant as it could increase the patient population eligible for the treatment significantly.

Lastly, during the past five trading sessions, the NYSE ARCA Pharmaceutical Index saw a decrease of 2.34%. Among the companies reviewed, AbbVie enjoyed the largest increase in stock value of 7.5%, while Eli Lilly faced a decline of 7.2%.

These developments indicate an active period for these pharmaceutical giants, with significant earnings reports that will set the tone for the sector moving forward. Keep an eye out for further earnings updates in the coming weeks.

Pharmaceuticals, Earnings, Stocks