Weekly Healthcare Notes: Pfizer, Abbott Labs, Merck & JNJ
The past week saw a handful of events for the healthcare sector. First, Pfizer ( PFE ) received the much awaited European approval for expanded use of its blockbuster vaccine Prevenar 13 in children and adolescents aged 6 to 17 years. Pfizer's counterparts Merck and Johnson & Johnson ( JNJ ) were in the news for taking interest in eye-care company Bausch & Lomb, which was put on the block by the private equity major Warburg Pincus. Abbott Labs ( ABT ) is also said to be in the fray to acquire Bausch & Lomb. Meanwhile, the healthcare company began final stage trials to get FDA approval for first kind of drug eluting bioresorbable stent, Absorb.
New year celebrations continue for Pfizer as, after receiving FDA approval for blockbuster potential blood thinner Eliquis (Read Pfizer Secures Coveted FDA Approval For Eliquis ), the drug maker has secured European approval to expand use of its one of the largest selling pneumococcal vaccine, Prevenar 13 (known as Prevnar 13 in the U.S.). The vaccine was showing consistent double digit growth rates until Q3, where it surprised the market by posting a decline in revenues as most eligible pediatric patients were already vaccinated and the adult patients market was largely not open to the vaccine. The approval will open the additional revenue stream for the vaccine as it now be given to children and adolescents aged 6 to 17 years, bringing reprieve to it.
However, there are other approvals, the vaccine is still awaiting including FDA approval for the same age group and CDC recommendations for all adults aged 50 years and above in the US. With these approvals and no significant competition in the market, we expect revenues from the Prevenar franchise to nearly double from current $4.5 billion by the end of our forecast period. Read our note Pfizer Updates: Europe Approves Expanded Use Of Prevenar 13 for detail analysis.
Merck, Johnson & Johnson And Abbott Labs
Merck, Johnson & Johnson and Abbott Labs are said to be considering the acquisition of private equity firm Warburg Pincus owned eye-care company Bausch & Lomb. Many of healthcare companies are facing revenue losses due to patent cliffs and/or a weak drug pipeline. Bausch & Lomb has vision care products (contact lenses, lens care products etc) and ophthalmic surgical devices and instruments in its product portfolio. In addition, it has a number of generics and branded drugs mainly for eyes with a promising pipeline. Healthcare companies could benefit from an established but steadily growing business. Among the potential suitors, we think Merck and Abbott Labs could be one of the most serious contenders even as a $10 billion price tag could discourage them. Read our note Merck, Abbott And JNJ Show Interest In Bausch & Lomb to know why we think so.
See our complete analysis for: Johnson & Johnson | Merck | Abbott Labs | Pfizer
Following Abbott Labs' company split on Jan 2, its medical device business has seen an increased activity as the diversified healthcare company has begun phase III clinical trials in the U.S. to prove efficacy and safety for world's first drug eluting bioresorbable stent, Absorb, which dissolves in patients' bloodstreams after finishing treatment of narrowed /diseased arteries. While the device is currently approved and being sold in Europe and other markets, the large U.S. market still evades it pending clinical trials.
In our current model, stents are part of the company's vascular franchise, which has been Abbott's largest contributor to growth. The business, however, has been under pressure of late due to weak stent sales. Backed by such new and innovative products, we expect the company's overall vascular market share to increase to our expectations of over 17.5% by the end of the Trefis forecast period. Recently, Abbott Labs won FDA approval for its next-generation Xience Xpedition DES.
See Full Analysis For Abbott Labs here
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