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Pharma Stock Roundup: Another Strong Quarter from J&J, Lilly Cancer Drug Approved

Earnings started on a positive note for the pharma sector with industry bellwether Johnson & Johnson JNJ reporting better-than-expected results. Swiss company, Roche RHHBY also reported nine month sales figures this week.

Recap of the Week's Most Important Stories

J&J Tops Estimates but Remicade Biosimilar Round the Corner : J&J continued with its earnings streak, topping expectations again this quarter. While the company's pharma segment once again boosted performance, J&J is facing the prospect of biosimilar competition for its multi-billion dollar drug Remicade from late November. Pfizer announced that it will be launching Inflectra at a 15% discount to the wholesale acquisition cost of Remicade (Read more: Key Takeaways from JNJ's Q3 Call: Remicade, Pipeline, Acquisitions ).

Meanwhile, Roche's Group sales increased 4% at constant exchange rates with Pharmaceuticals Division sales being driven by oncology and immunology medicines. Roche got some good news on the regulatory front as well with the FDA approving its cancer immunotherapy Tecentriq for people with a specific type of metastatic lung cancer. This makes Tecentriq the first and only anti-PD-L1 cancer immunotherapy to be approved by the FDA for metastatic non-small cell lung cancer (NSCLC). Tecentriq is one of Roche's new product launches - the company said that the product has been performing strongly since May, when it was first approved in the U.S. for advanced bladder cancer (Read more: Roche's Tecentriq Wins FDA Nod for Additional Indication ).

Lilly STS Drug Gains Accelerated Approval : Lilly LLY gained FDA approval for Lartruvo for use in combination with doxorubicin for the first-line treatment of soft tissue sarcoma (STS). Approval was granted under the FDA's accelerated approval program which means the company will have to provide confirmatory phase III data for continued approval. Lilly said that the phase III confirmatory study is fully enrolled.

Lilly's drug is the first monoclonal antibody approved to treat STS as well as the first front-line therapy for STS to be approved by the FDA in four decades. STS is a complex disease with several subtypes and there is significant unmet medical need with the disease being hard to diagnose and difficult to treat. According to the American Cancer Society, about 12,000 new STS cases were diagnosed last year and almost 5,000 deaths in the U.S. alone (Read more: Eli Lilly Lartruvo Gets FDA Approval for Soft Tissue Sarcoma ). Lilly is a Zacks Rank #2 (Buy) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Teva Provides Pipeline Updates : It was an eventful week for Teva TEVA , which provided quite a few updates on the pipeline front. The company and its partner Regeneron were hit by a clinical hold on their experimental pain treatment, fasinumab. The FDA placed a phase IIb study in patients with chronic low back pain on clinical hold and asked for the study protocol to be amended following the discovery of adjudicated arthropathy in a patient receiving high dose fasinumab - the patient had advanced osteoarthritis at study entry. Dosing in the study has been stopped and the companies are now planning a pivotal phase III study for chronic low back pain excluding patients with advanced osteoarthritis.

Meanwhile, the companies plan to study only lower doses in the phase III osteoarthritis pain program as the incidence of adjudicated arthropathies was found to be potentially dose-dependent, with a higher rate in the higher dose groups. Shares of both Regeneron and Teva were down on the fasinumab update (Read more: Regeneron & Teva Hit by Clinical Hold on Chronic Pain Study ).

Teva also announced that its resubmitted NDA for SD-809 for the treatment of chorea associated with Huntington disease was accepted by the FDA. A response from the agency is expected by Apr 3, 2017. Teva also got a positive opinion from the CHMP related to the label expansion of Trisenox in Europe. The company is looking to get the label expanded for use in newly diagnosed low to intermediate risk acute promyelocytic leukemia in combination with retinoic acid (Read more: Teva Trisenox Wins CHMP Nod for Expanded Use in Leukemia ).

Teva also disclosed that it received a warning letter from the FDA for its Godollo manufacturing facility. Teva expects to respond to the letter on Nov 4, 2016.

Allergan Nocturia Treatment Gets Favorable Panel Vote : Botox-maker Allergan AGN got a favorable advisory panel recommendation with the FDA's Bone, Reproductive and Urologic Drugs Advisory Committee voting (14-4) in favor of approving SER120 for the treatment of nocturia. The committee also voted (17-1) that there is enough evidence to support the efficacy of at least one of the SER120 doses. A response from the FDA regarding the approval status of SER120 is expected in the fourth quarter. While the FDA is not required to do so, it usually follows the advice of its advisory panels.

Merck Drugs Hit Primary Endpoints: Merck MRK announced that Keytruda hit the primary endpoint of overall survival (OS) in the phase III KEYNOTE-045 study in patients with advanced bladder cancer. Moreover, based on a pre-specified interim analysis, an independent Data Monitoring Committee (DMC) has recommended that the study be stopped early.

Meanwhile, Merck's investigational antiviral drug, letermovir, also met the primary endpoint in a late-stage study for the prevention of CMV infection in adult CMV-seropositive recipients of an allogeneic hematopoietic stem cell transplant (HSCT). The candidate has orphan drug status in the U.S., Europe and Japan as well as fast track designation in the U.S. (Read more: Merck's Antiviral Medicine Meets Endpoint in Phase III ).

Performance

Large Cap Pharmaceuticals Industry Price Index

Large Cap Pharmaceuticals Industry Price Index

Despite delivering strong results, J&J's shares declined 2.9% reflecting concerns regarding the upcoming launch of a Remicade biosimilar. The NYSE ARCA Pharmaceutical Index declined 0.8% the last five trading days. Over the last six months, Bristol-Myers declined 27.3% while Merck was up 9.4% (See the last pharma stock roundup here: Mylan in EpiPen Medicaid Settlement, ESMO Data in Focus ).

What's Next in the Pharma World?

Lilly, Merck, Novartis NVS , Glaxo and Bristol-Myers will all be reporting earnings results in the coming days. Moreover, a decision from the FDA regarding Merck's Zinplava (bezlotoxumab) for the prevention of Clostridium difficile (C. difficile) infection recurrence should be out by Oct 23 while Pfizer should hear back from the FDA regarding a label change for prostate cancer treatment Xtandi incorporating head-to-head data against Casodex. The FDA is expected to give a decision regarding the sNDA on Oct 22.

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


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

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