Markets

Pharma Stock Roundup: J&J's Q3 Earnings, Pause on Coronavirus Studies & Other Updates

J&J JNJ began the earnings season for the pharma sector this week with a beat. In other news, J&J paused all studies on its coronavirus vaccine candidate, while Eli Lilly LLY halted a study on its coronavirus antibody treatment.

Recap of the Week’s Most Important Stories

J&J Kicks Off Q3 Earnings Season, Pauses COVID-19 Vaccine Study: J&J reported encouraging third-quarter results beating estimates for earnings and sales. The company also raised its full-year earnings and sales guidance for the second time this year.

All its segments performed well despite the negative impact of COVID-19. Its Pharmaceuticals unit continued to outperform the market as the company witnessed improved trends in prescription volumes and physician office visits. Meanwhile, increasing demand for its Consumer Health products and a better-than-expected procedure recovery in Medical Devices provided top-line support.

However, J&J paused dosing in clinical studies on its coronavirus vaccine candidate, JNJ-78436735, due to an unexplained illness observed in a study participant. The pause was on all studies including the large pivotal phase III study, ENSEMBLE, which was initiated last month. The unexpected serious adverse event is now being reviewed by the ENSEMBLE independent Data Safety Monitoring Board (DSMB) and also J&J’s own internal physicians.

Lilly Pauses Study on Coronavirus Antibody Candidate: The U.S. government’s National Institute of Health (“NIH”) has reportedly paused a study evaluating a combination of Lilly’s monoclonal antibody candidate, LYCoV555, and Gilead’s remdisivir in hospitalized COVID-19 patients. NIH was leading the study and decided to pause it following potential safety concerns raised by the independent DSMB.

Last week, Lilly applied to the FDA for Emergency Use Authorization of LYCoV555, as a monotherapy for the treatment of higher-risk patients who have been recently diagnosed with mild-to-moderate COVID-19.

Lilly also announced an agreement to acquire private biotech, Disarm Therapeutics, for an upfront payment of $135.0 million. The acquisition will expand Lilly’s portfolio in pain and neurodegeneration with the addition of Disarm's promising preclinical SARM1 programs for axonal degeneration. Lilly plans to advance the SARM1 inhibitors in the pipeline and develop them into potential medicines for peripheral neuropathy and neurological diseases, such as ALS and multiple sclerosis.

Roche’s Q3 Sales Rise, 2020 Guidance Unchanged: Roche’s RHHBY sales in the third quarter of 2020 rose 1% as higher sales in its Diagnostics division offset lower sales in the Pharmaceuticals unit.  Sales at the Pharmaceuticals division decreased 4%, while the Diagnostics division’s third-quarter sales climbed 18% on increasing demand for COVID-19 tests.

Notably, the company confirmed its 2020 sales growth outlook in the low- to mid-single-digit range amid the global coronavirus outbreak. Core earnings per share are estimated to rise broadly in line with sales.

Sanofi Announces Positive Preclinical Data on Vaccine Candidate: Sanofi SNY announced encouraging pre-clinical data on its mRNA-based vaccine candidate, MRT5500, which is being developed in partnership with Translate Bio. The data showed that MRT5500 induced a favorable immune response profile against SARS-CoV-2 in mice and monkeys. The preclinical data showed that two doses of MRT5500 induced neutralizing antibody levels significantly higher than those observed in COVID-19 patients. A phase I/II clinical study on MRT5500 is expected to begin this year.

AstraZeneca to Begin Phase III Studies on Coronavirus Antibody Cocktail: AstraZeneca AZN plans to start two phase III studies in the next weeks on AZD7442, its investigational cocktail antibody therapybeing developed for the prevention and treatment of COVID-19. AZD7442 is a combo of two monoclonal antibodies, AZD8895 and AZD1061. The two studies will enroll more than 6,000 adults. The company is also planning to initiate additional studies to evaluate AZD7442 for the treatment of COVID-19. AstraZeneca has also secured a funding support of almost $486 million from the U.S. government and plans to supply up to 100,000 doses to the government toward year-end.

Pfizer’s Phase III Study on Ibrance in Early Breast Cancer Fails: Pfizer’s PFE phase III study, PENELOPE-B, evaluating its CDK 4/6 inhibitor, Ibrance, in patients with high-risk early breast cancerfailed to meet the primary endpoint. This is the second phase III study on Ibrance for an early breast cancer indication, which has failed. In June, an independent Data Monitoring Committee (DMC) recommended that a large phase III PALLAS study evaluating Ibrance plus standard adjuvant endocrine therapy in HR+, HER2- early breast cancer is unlikely to show statistically significant improvement in its primary endpoint of iDFS. Ibrance is marketed for the treatment of HR+, HER2- advanced or metastatic breast cancer but not for any early breast cancer indication.

FDA Approves Expanded Use of Merck’s Keytruda in Classical Hodgkin Lymphoma: The FDA granted approval to Merck’s MRK blockbuster PD-L1 inhibitor, Keytruda, for the treatment of adult patients with relapsed or refractory classical Hodgkin lymphoma (cHL) who progress after frontline therapy. The approval is based on results from the phase III KEYNOTE-204 study. Meanwhile, the FDA also approved pediatric patients with refractory cHL, or cHL that has relapsed after two or more lines of therapy

Keytruda was earlier approved in 2017 for the treatment of adult and pediatric patients with refractory cHL who have relapsed after three or more prior lines of therapy. The FDA approval, back then, was on an accelerated basis backed by data from the phase II KEYNOTE-087 study. The KEYNOTE-204 study is a confirmatory study for the same indication as well.

The NYSE ARCA Pharmaceutical Index declined 1.9% in the last five trading sessions.

 

Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

Here’s how the eight major stocks performed in the last five trading sessions.

 

 

In the last five trading sessions, all stocks declined with Lilly recording the maximum decrease (4.4%).

In the past six months, AstraZeneca has risen the most (5.0%), while Lilly declined the most (6.7%).

(See the last pharma stock roundup here: LLY, AZN, PFE, GSK Progress on Coronavirus Programs)

What's Next in the Pharma World?

Watch out for pipeline and regulatory updates next week ahead of the peak earnings season the week after.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027. 

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Johnson Johnson (JNJ): Free Stock Analysis Report
 
Sanofi (SNY): Free Stock Analysis Report
 
AstraZeneca PLC (AZN): Free Stock Analysis Report
 
Roche Holding AG (RHHBY): Free Stock Analysis Report
 
Pfizer Inc. (PFE): Free Stock Analysis Report
 
Merck Co., Inc. (MRK): Free Stock Analysis Report
 
Eli Lilly and Company (LLY): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More