earnings

Vytorin and Zetia may have hit bottom

Tracy Staton — Mon, 17 Nov 2008 10:47:09 -0500

Well, it's not good news for those long-suffering cholesterol meds Vytorin and Zetia--but at least it's not more bad news. The two drugs, which have seen new scrips fall and fall again since less-than-stellar research news first hit in January, may finally be bottoming out.

The latest sales report from Schering-Plough shows that prescriptions for the two meds actually took a tiny tick upward to $2.19 million in October from $2.17 million in September. That's way down from the $3 million-plus posted back in January, but the numbers could definitely be worse.

As you know, Schering and Merck together sell Vytorin, a combo of the Merck statin Zocor (generic simvastatin) and Zetia, another cholesterol fighter that works via a different mechanism. Since January, the Vytorin/Zetia franchise has sustained a series of blows, starting with the Enhance study, which suggested that Vytorin doesn't slow heart disease any better than Zocor would on its own. Another study suggested that Vytorin and Zetia might boost the risk of cancer, and though that data has been called anomalous by various experts, the continuing debate hasn't helped sales.

As the Wall Street Journal Health Blog notes, next month's scrip figures could be telling: If the numbers continue to hold their own, Vytorin and Zetia may finally have hit bottom.

- read the Health Blog post

Analysts predict Sanofi shakeup in 2009

Tracy Staton — Mon, 03 Nov 2008 10:41:05 -0500

Sanofi-Aventis must be expecting a big fourth quarter. Despite the fact that its third-quarter profits came in 28 percent lower than last year's, the drugmaker hiked its 2008 forecast, saying it's expecting EPS to rise by 9 percent, versus its previous estimate of an 8 percent increase. Third-quarter sales fell 2.4 percent to $8.68 billion on the weaker dollar (which since has rebounded); net income ran to about $1.7 billion. Vaccine sales growth outperformed drug sales, rising 9.4 percent compared with a 4.9 percent increase in pharma revenues.

So why the optimism? Sanofi held up against an onslaught of generic copies of its meds, for one thing. Both Ambien, the leading sleeping pill, and Plavix, the clotting drug, faced copycat competition; Plavix still managed a 5.7 percent rise.

Nonetheless, Sanofi still is in dire need of new meds for its pipeline, and that's one reason why analysts are anticipating a big shakeup when incoming CEO Chris Viehbacher (photo)--late of GlaxoSmithKline--takes over from Gerard Le Fur (photo) in December. They're looking for some dealmaking when the new year comes. Stay tuned.

- read the WSJ story

AZ's Crestor rises as Vytorin falls

Tracy Staton — Thu, 30 Oct 2008 10:06:32 -0400

Back when bad publicity started to surround the Merck/Schering-Plough statin Vytorin, industry observers theorized that another cholesterol med might reap the benefits: Crestor. Well, judging by this quarter's earnings reports, those observers were right. Vytorin and its sister drug Zetia continued to decline, while AstraZeneca's Crestor managed healthy growth. According to AZ's numbers, company sales burgeoned to $7.78 billion, an increase of 9 percent or so, based on Crestor's strong expansion, plus growth in emerging markets.

Crestor, in fact, helped offset the suffering Nexium, that "little purple pill" that AstraZeneca once could count on to boost its revenues. Nexium lost ground in the quarter, despite the fact that AstraZeneca successfully held off a copycat version from Ranbaxy Laboratories with a manufacturing deal to start next year

Details: In the three months to Sept. 30, AstraZeneca's net profit rose to $1.73 billion from $1.34 billion in the same period a year earlier. Pretax profit rose 29 percent to $2.44 billion, ahead of analysts' expectations of $2.15 billion.

Plus, the U.K.-based drug maker lifted its guidance for core earnings per share, which are now expected in a $4.90 to $5.05 range. Previous guidance was in a $4.60 to $4.90 range.

- read the Wall Street Journal article

Industry sales outlook decreasing

Christe Bruderlin-Nelson — Wed, 29 Oct 2008 07:50:35 -0400

Although many still consider Big Pharma to have more padding during the U.S. economic crisis than other industries, drug companies are still going to take their share of punches. According to this morning's Wall Street Journal and a report from IMS Health, drops in revenue due to lagging U.S. sales might be more dramatic than analysts previously have predicted.

While prescriptions are slightly up, patients are going to the doctor less and are switching to generic medications whenever possible to save money. The most cash-strapped individuals are cutting doses in half or even skipping doses. While choices like these might sound like small potatoes, they could influence revenue significantly and some predict drug sales to increase by only one percent next year, which would be the slowest growth rate since 1958.

Already in the news, several key players will be facing patent expirations in the next four years, but the industry is also seeing fewer drugs make it to market due to increased regulations. As a result, many companies are transferring parts of their business to emerging markets, which does not help the U.S. economy either. The influence of pharma likely spreads to employment rates, too, since big pharma has cut over 100,000 jobs in the last five years.

The total U.S. pharmaceutical market will grow to somewhere between $292 billion and $302 billion, but sales could slow by as much as 3 percent, or $10 billion, as a result of companies and consumers adapting to the economic downturn.

- read the Wall Street Journal story

Related Articles:
Drug sales and marketing update: September 2008
Report examines global pharma growth
Obama plan could whack Big Pharma
One third of alliances don't deliver
Investors turn to pharma for yields
Pharma is cash rich abroad, but debt will rise

Erbitux growth boosts German Merck

Tracy Staton — Mon, 27 Oct 2008 11:17:06 -0400

If you want more confirmation that drugmakers can grow sales even in this market, look no further than Merck KGaA. The German company expects to grow revenues between 6 percent and 8 percent this year, within its earlier guidance of 5-9 percent. And it's still predicting margins of at least 23 percent on those sales.

For the quarter, Merck reported profits of €200.1 million, or $251.8 million, compared with €36.2 million a year ago (when the company booked a €183 million charge on its buyout of Serono). Revenues for the quarter grew 8.7 percent to €1.89 billion. And unlike U.S. companies, whose sales were often inflated by currency gains, Merck's numbers reflect a "considerable" negative impact from currency, cutting organic sales growth by 4.8 percent.

Digging deeper, Merck's fastest-growing drugs were Erbitux, the cancer treatment marketed in the U.S. by Bristol-Myers Squibb and ImClone Systems, which mushroomed by 13 percent to €134 million. Rebif, Merck's multiple sclerosis treatment, grew by 10 percent to €338 million.

- read the story in the Wall Street Journal

GlaxoSmithKline does better in Q3

Christe Bruderlin-Nelson — Wed, 22 Oct 2008 10:28:57 -0400

GlaxoSmithKline did better than it expected in the third quarter, showing increases in sales and revenue, despite a drop in net profit.

While profit was down $2.1 billion compared to a year ago, revenue was up 7 percent to $9.6 billion. Per share earnings also went up 6 percent to 41 cents a share.

GSK CEO, Andrew Witty (photo), attributes the positive results to the "considerable transition" occurring in its portfolio, but fluctuation of the British Pound also appeared to play a role. Stronger Advair sales helped during the quarter, as well.

The company has held on fairly well in these tough economic times, but is expecting sales to drop for some of its key products, including Avandia for diabetes, the depression med Wellbutrin and its heart medication, Coreg. Avandia is likely to suffer most, due to a newer FDA black box label warning.

The company will be exploring small-to-medium acquisition opportunities, as well as opportunities to diversify, moving forward.

- see the Associated Press story
- read the Wall Street Journal article

Merck to cut 7,200 jobs

Christe Bruderlin-Nelson — Wed, 22 Oct 2008 09:33:25 -0400

Merck said today that it will cut 7,200 jobs--more than 12 percent of its workforce--following the announcement of a 28 percent drop in Q3 earnings. The job cuts, which will include 6,800 active employees and 400 vacancies, will be made in all areas of the company. Forty percent of the cuts will be in the U.S. and 25 percent will be senior and mid-level execs. Back in 2005, Merck cut 10,400 positions; these new cuts come in addition to that, and are expected to be completed by 2011.

Merck Q3 2008 Sales Results

CLICK IMAGE FOR MORE

In Q3, the company took a multimillion restructuring charge (about 29 cents a share) and had unimpressive sales. As a result, net income dropped to $1.08 billion--just 51 cents a share--down from $1.53 billion and 70 cents a share a year ago. Third-quarter revenue was down 2 percent, partly due to sluggish sales for most of its vaccines, major generic competition for Fosamax, and a drop in its cholesterol drug sales of about 15 percent to $1.1 billion. Merck did see some positive movement with its blood pressure, asthma, HIV and diabetes drugs.

The restructuring includes more than just layoffs. In a release, the company said it would:

accelerate the roll-out of a new, more customer-centric selling model;
make greater use of outside technology resources, centralize common sales and marketing activities, as well as consolidate and streamline its operations; and
focus its manufacturing division on core products and outsource non-core manufacturing.

In addition, Merck said it will consolidate its R&D ops. Basic search operations will be organized to consolidate work in support of a given therapeutic area into one of four locations. As a result, Merck will close three research sites in Japan, Italy and Seattle by the end of 2009.

"Our focus remains on increasing revenue from our new and in-line products, fully funding innovative R&D, investing in growth opportunities, such as emerging markets, and becoming the most trusted partner in delivering value to our customers. With the right long-term strategy and our efforts to reshape Merck's business, including today's actions, I am confident we are building a solid foundation for achieving industry-leading performance in the future," said CEO Richard Clark (photo). Merck expects restructuring costs from $1.6 billion to $2 billion through 2001, but hopes to save between $3.8 billion and $4.2 billion by 2013.

- see Merck's announcement
- here's a chart on Merck's drug sales
- read the AP article

Schering sales rise despite statin loss

Tracy Staton — Tue, 21 Oct 2008 10:30:02 -0400

Schering-Plough posted a whopping 63 percent increase in third-quarter revenue, to $4.58 billion. Some $1.4 billion of that came via the acquisition of Organon Biosciences--and 6 percent from currency gains--but discounting those items, the company still racked up gains, primarily from growth at Organon. And the sales figures topped Wall Street estimates of $4.49 billion. Earnings also beat the Street, despite a steep decline quarter-over-quarter; they came in at 34 cents per share, compared with analysts' forecasts of 31 cents.

The bad news is that Schering's cholesterol meds continued their downward slide. Sales of Zetia and Vytorin dropped by 15 percent to $1.1 billion. The company's take--after splitting with Merck--fell to $434 million from $506 million the same quarter last year. As you know, Vytorin and Zetia have been suffering since January from a spate of unflattering research. Though the sales decline seemed to have abated somewhat this summer, that's no longer the case. We'll be watching to see how low they can go.

- read the story at MarketWatch
- see Pharmalot's coverage
- check out the article in the Hartford Courant

Analyst calls Genentech-Roche deal 'inevitable'

Tracy Staton — Thu, 16 Oct 2008 10:05:56 -0400

Genentech disappointed analysts twice this week. Once was with earnings that didn't quite meet expectations (though they were pretty solid, especially in this economy). The second time was with a big fat "no comment" on the potential deal with Roche. On the third quarter earnings conference call, CEO Art Levinson (photo) said, "We will not be discussing anything further on the call today regarding the Roche proposal."

That didn't stop Eric Schmidt of Cowen & Co. from calling Genentech out for a "lack of transparency" on the deal. CFO David Ebersman basically said he felt Schmidt's pain, but the lawyers want Genentech brass to keep its lips zipped.

It also didn't stop Schmidt from upgrading Genentech yesterday, saying that he still believes a deal is "inevitable." The only hurdle, analysts now think, is the gridlock in credit markets, which could be temporarily interfering with Roche's ability to close. Schmidt pegs the price at at least $90; as you know, Roche offered $89 per share for the chunk of Genentech it doesn't already own. DNA shares are trading well below that number now, perhaps because of credit fears.

Meanwhile, as the Wall Street Journal Health Blog points out, Genentech's quarterly numbers only emphasize its allure. Genentech is doing what every drugmaker wants to do: raking in millions on cancer treatments. Avastin sales jumped 18 percent to $704 million; Rituxan was up 15 percent to $655 million; Herceptin also grew by 15 percent to $368 million.

- check out the column at Seeking Alpha
- read the Health Blog post

J&J report impressive Q3 earnings

Christe Bruderlin-Nelson — Wed, 15 Oct 2008 06:11:36 -0400

Pharma has seen better financial days, but Johnson & Johnson stood out among the crowd yesterday when it posted its third quarter earnings and sales--making the company look (almost) economic crisis-proof. Earnings were up from 88 cents per share in the previous year to $1.17 per share and sales were up 6.4 percent from last year, at $15.9 billion, in the third quarter.

However, while J&J's net income and revenue increased, 3.1 percent of the revenue jump was due to "the positive impact of currency," which means that fluctuations in the dollar--such as a recovery of its value--could more seriously affect J&J's bottom line. Currently, J&J's impressive numbers rely much more on international sales than on U.S. sales.

The Motley Fool is monitoring the company, paying particular attention to sales of pharma sellers Risperdal, Duragesic, Procrit (all falling in sales) and Topamax, which enjoyed a decent increase in sales.

The earnings report beat analyst expectations, which topped out at $1.11 per share. The reports excluded special charges and the net earnings for the quarter were up 7.6 percent. Consumer OTC products carried the most weight in the positive pattern, including products obtained in the Pfizer consumer products acquisition. Perhaps Pfizer should have held onto its hat for a bit longer.

- read the story at the New York Times
- see more at BNet
- here's the Wall Street Journal's take

AZ raises forecast; Sanofi reports 'bloodbath'

Tracy Staton — Thu, 31 Jul 2008 10:36:34 -0400

More big earnings news today, with the undisputed winner being AstraZeneca, which raised its 2008 forecast and trounced analyst expectations for the quarter. Not so lucky: Sanofi-Aventis, whose earnings suffered on the weak dollar. Here's more:

Bayer posted a 13 percent drop in profits, but still beat the Street's forecast. Sales rose 3.6 percent to €8.51 billion. The healthcare unit reported a 6.6 percent increase in revenue, helped by a 90 percent leap in sales of the cancer treatment Nexavar, and big growth for contraceptives Mirena and Yasmin, and the multiple-sclerosis med Betaferon.
Allergan didn't suffer much from lower-than-expected sales of Botox and other meds; its sales rose 20 percent to $1.16 billion, and profits climbed to $147.3 million from $138 million a year ago.
AstraZeneca posted a 9 percent boost to sales to $7.96 billion, as the cholesterol med Crestor, asthma treatment Symbicort, and antipsychotic med Seroquel grew by more than 10 percent each. Nexium, the heartburn treatment, and heart med Toprol XL continued to lose sales, however, to generic competition. In emerging markets, overall revenues grew by 20 percent to $1.15 billion.
Sanofi-Aventis saw profits drop by 4 percent to €1.61 billion, as sales dropped almost the same amount to €6.69 billion. Currency losses outweighed increasing sales of big drugs such as the Lantus insulin injection and breast cancer med Taxotere. The company also discontinued development on four drugs. One analyst called the report a "bloodbath."
Japan's Takeda Pharmaceutical saw its first-ever operating loss this quarter on costs from its $8.8 billion acquisition of Millennium Pharmaceuticals. The drugmaker saw a loss of $251.7 million (¥27.18 billion) on an 8.3 percent rise in revenues to 396.88 billion.
Daiichi Sankyo saw sales drop for the quarter, to ¥203.73 billion from ¥235.54 billion a year ago. Net income dropped, too, to ¥25.08 billion from 41.41 billion. The company also announced a procedural delay in its buyout of India's Ranbaxy Laboratories, as the companies await regulatory approval there.

- see the Bayer numbers in the Wall Street Journal
- check out Allergan's report in the Los Angeles Times
- read the Financial Times news on AstraZeneca
- find Sanofi's earnings at MarketWatch
- get Takeda's figures in Forbes
- see the RTT News piece on Daiichi

Amgen profits drop, Teva's grow

Tracy Staton — Tue, 29 Jul 2008 10:44:00 -0400

It's a good news-bad news day on the earnings side, with Amgen reporting a drop in profits, but a boost in its 2008 forecast, and Ranbaxy earnings on the flat side, while Teva's are on the rise. Here are the details:

Amgen saw second-quarter net drop by 7.7 percent to $941 million, while revenue grew by a modest 1 percent to $3.76 billion. Sales figures still managed to beat analyst expectations, though. Like some other drugmakers this quarter, Amgen reported a drop in U.S. sales--of 1 percent, to $2.84 billion--offset by a big increase in international sales, namely 17 percent. The best news, though, came in the form of better-than-expected sales of its anemia drugs, which have been depressed by safety concerns for months now.
Ranbaxy Laboratories posted a $39 million profit for the quarter, virtually unchanged from the same period a year ago. Sales, however, grew by 13 percent to $440 million.
Teva Pharmaceutical's profits grew by 4.6 percent to $539 million on growth in generic sales and in its branded multiple sclerosis treatment Copaxone. Overall, revenues grew by 18 percent to $2.82 billion, beating analyst estimates. A 12 percent increase in North American sales was fueled in part by a generic version of GlaxoSmithKline's antidepressant Wellbutrin XL.
Sepracor saw its quarterly revenues increase by 6.3 percent to $294.1 million, with profits of $6.7 million, up from $4.8 million a year ago. Its insomnia treatment Lunesta grew sales slightly, to $148.1 million from $142.9 million a year ago

- see Amgen's results in the Wall Street Journal
- check out Ranbaxy's figures
- get the Teva news from BusinessWeek
- read Sepracor's release

Earnings roundup: BMS to cut $1B more

Tracy Staton — Thu, 24 Jul 2008 10:05:32 -0400

Big Pharma inundated the market with earnings reports the last two days, for the most part surpassing analyst expectations. But the reports buried some of the biggest news: That Bristol-Myers Squibb is plotting a major add-on to its $1.5 billion restructuring, and that GlaxoSmithKline's embattled diabetes med Avandia saw sales plummet by almost half. Here are the highlights:

Bristol-Myers Squibb reported better-than-expected revenues of $5.2 billion, up from $4.47 billion a year earlier, with adjusted earnings at 43 cents per share, up from 31 cents. Star performers for the company included its clot-buster Plavix and psych drug Abilify, whose sales rose 17 percent and 28 percent respectively. Results also benefited from the company's $1.5 billion cost-cutting program--which it plans to expand by an additional $1 billion. No details yet on how.
Eli Lilly profits soared by 45 percent for the quarter to $958 million, or 88 cents a share, on an 11 percent increase in revenues to $5.15 billion. Its antidepressant Cymbalta saw sales grow by 26 percent, with a 19 percent increase domestically and a whopping 80 percent rise on the international market. Tadalafil, the ED treatment, grew sales by 24 percent.
Pfizer's profits more than doubled to $2.78 billion on strong international sales growth, which offset generic competition in the U.S. Sales grew by 9.5 percent to $12.13 billion, but U.S. revenues dropped by 2 percent as the allergy med Zyrtec and cancer drug Camptosar went generic. Lipitor sales grew by 9 percent, largely internationally.
GlaxoSmithKline beat market expectations, numbers-wise, on strong vaccine and asthma-drug sales. But analysts are concerned about a 46 percent drop in sales of the diabetes med Avandia and disappointing results in its consumer health business.
Wyeth sales grew 5 percent to $5.9 billion, with almost all of that increase coming from the weak dollar; its net income fell by 6 percent to $1.12 billion, including charges related to its cost-cutting program. Excluding those charges, its EPS of 91 cents beat analyst estimates. The company's lead product, the antidepressant Effexor, grew sales by 5 percent, and its pneumonia vaccine Prevnar boosted revenues by 9 percent.

- find Lilly's results at the Wall Street Journal
- check out Bristol's report at CNN Money
- get the Pfizer and Wyeth news at CNN Money
- read the GSK consensus in Forbes

Earnings up, earnings down for drugmakers

Tracy Staton — Tue, 22 Jul 2008 10:30:14 -0400

A plethora of drug-and-device results today, from falling profits at Boston Scientific and Schering-Plough to higher earnings and flat sales at Merck. Here's the roundup:

Merck posted net income of $1.77 billion, up from $1.68 billion year-over-year; per-share results were 82 cents compared with 77 cents a year ago. Discounting foreign-currency gains, sales were relatively flat, slipping by just 1 percent to 6.05 billion. The company suffered a 48 percent drop in Fosamax revenues because of generic competition, while Vytorin and Zetia sales fell 9 percent. Singulair revenues--expected to rise--stayed flat. But blood-pressure meds Hyzaar and Cozaar saw sales grow by 11 percent to $941 million.
Schering-Plough's earnings suffered on Organon acquisition costs, ending up at $398 million, or 24 cents a share, compared with $517 million, or 34 cents, last year. Excluding those items, EPS would have come to 45 cents, the company says. Sales jumped by 55 percent to $4.92 billion--with $1.4 billion of that increase coming from Organon, which it bought last November. A standout drug was Remicade, which saw sales leap by 41 percent to $557 million.
Boston Scientific's earnings fell 15 percent to $98 million on restructuring charges and declining stent sales. Drug-coated stent revenues plummeted by 30 percent in the U.S. as Medtronic launched its new drug-coated product; worldwide, they fell 13 percent to $382 milion. Total sales came to $2.02 billion.
Biogen Idec boosted its earnings to 70 cents per share for the quarter, compared with 54 cents a year ago, on revenues of $993 million. That's a 28 percent increase over last year's second-quarter sales. On an adjusted basis, EPS came to 91 cents, beating analysts' estimates of 84 cents.
Forest Laboratories posted EPS of 79 cents per share, down from 83 cents a year ago; the numbers suffered from a charge related to Forest's parting ways with Daiichi Sankyo on Azor marketing. Revenues grew by 4.2 percent to $967 million. Sales of its antidepressant, Lexapro, grew by 6.1 percent to $894 million, while Alzheimer's drug Namenda pulled in $219 million, up 14 percent.

- see Merck's earnings at MarketWatch
- get Boston Scientific's news from the Wall Street Journal
- check out Biogen's numbers at MarketWatch
- read Schering's results, also at MarketWatch
- find Forest's earnings release

Merck, Schering delay earnings

Tracy Staton — Mon, 21 Jul 2008 06:49:41 -0400

Merck and Schering-Plough are delaying their earnings reports until after the close of trading today so that researchers can present preliminary results of a new Vytorin study first. The study, known as SEAS for Simvastatin plus Ezetimibe in Aortic Stenosis, examined the cholesterol drug's ability to curb narrowing or obstruction of the valve leading from the heart into the aorta. As you know Vytorin is a combo of Zocor (simvastatin) and Zetia (ezetimibe).

It's a rare problem, but the study also collected some outcomes data that could either boost Vytorin's image or further depress it, depending on the results. And, as the Wall Street Journal notes, the study results are also newsworthy because they're coming ahead of schedule--rather than way behind, like the Enhance data that's given the drugmakers so much grief this year. You'll recall that Enhance showed Vytorin to be no more effective than Zocor alone at reducing plaque buildup in the arteries.

The companies badly need some good Vytorin news: the number of prescriptions for the drug fell from 1.84 million in January to 1.33 million in June.

- check out Merck's release
- see the story from the Associated Press
- read the WSJ Health Blog post

Abbott, Novartis post double-digit profit hikes

Tracy Staton — Thu, 17 Jul 2008 09:43:08 -0400

Profits are way up at both Abbott Laboratories and Novartis, continuing--so far--pharma's strong showing this quarter. Boosted by strong sales of Humira, its rheumatoid arthritis med, and by international sales and their attendant exchange-rate gains, Abbott saw its net rise to $1.32 billion, or 85 cents per share, on $7.31 billion in sales, compared with a profit of $988.7 million during the same quarter last year. Analysts had expected EPS of 79 cents and revenues of $7.23 billion. Overall, domestic sales rose 5 percent, while international sales leapt by a whopping 24 percent. The company raised its full-year EPS forecast to between $3.24 and $3.28 from $3.20 to $3.25.

Meanwhile, Novartis posted a 17 percent rise in net income on the back of recent acquisitions and strong sales. Profits grew to $2.3 billion, up from $1.9 billion year-over-year, while sales rose 14 percent to $10.7 billion. And that sales growth came in part from stronger-than-expected numbers from the company's pharma division. Vacccines and diagnostics grew at a respectable clip, too, but overall U.S. sales fell by 3 percent because of generic competition and the loss of Zelnorm, which was withdrawn last year.

- read the Abbott news at the Financial Times
- see the Novartis report in the Chicago Tribune

J&J's consumer sales drive earnings growth

Tracy Staton — Tue, 15 Jul 2008 10:29:48 -0400

Mixed news on Johnson & Johnson today, too: Reporting its second-quarter results this morning, J&J announced a healthy 8 percent hike in net income on strong sales of its consumer products. The company also boosted its 2008 earnings forecast (for the second time) to $4.50 per share from $4.45. But that good news follows an FDA announcement late yesterday that it has "major concerns" about the company's application for a new indication on its antibiotic Doribax.

Let's look at the earnings first. Profits came in at $3.33 billion, up from $3.08 billion year-over-year; revenues rose 8.7 percent to $16.45 billion. EPS of $1.17 per share handily beat Wall Street estimates of $1.12. It was consumer products, though, that delivered the goods. Newly over-the-counter Zyrtec helped boost those sales by 13.2 percent. But pharma sales themselves only grew by 3.1 percent. The autoimmune drug Remicade saw its sales expand by 2 percent, which, though modest, certainly outclassed Procrit, the anemia drug, which fell by 14 percent. Sales of the antipsychotic Risperdal dropped 16 percent in advance of a quarter's-end generic competitor; we'll have to wait and see how that drug fares with full-on generic competition next quarter.

On Doribax, the FDA had been entertaining the antibiotic as a treatment for ventilator patients with pneumonia. Currently, the drug is OK'd for complicated urinary tract and intra-abdominal infections. The agency said that many patients in the study lacked convincing evidence that they had pneumonia. So, FDA says, it can't properly evaluate the efficacy of the drug for this use. The indication is up for discussion at an FDA advisory panel later this week, so we'll soon see what those experts think.

- read J&J's earnings release
- see the Wall Street Journal's earnings coverage
- find the WSJ's story on Doribax
- check out CNN Money's Doribax article

Genentech profits clouded by failed trial

Tracy Staton — Tue, 15 Jul 2008 10:11:49 -0400

Yesterday was a good news, bad news sort of day for Genentech. Sales of its cancer blockbusters Avastin and Rituxan drove second-quarter profits up almost 5 percent year-over-year, but the results still didn't meet Wall Street forecasts. And though the company raised its full-year earnings forecast, it had to stop a three clinical trials when the treatment--in combination with Pfizer's Sutent--induced anemia in some patients.

The second-quarter earnings details: Revenues hit $3.24 billion, up from $3 billion a year earlier, and profits ran at $782 million compared with $747 million. Avastin sales reached $650 million for the quarter, up 15 percent year-over-year, and Rituxan sales were up 12 percent to $651 million. The revenue figures satisfied analysts, but at 73 cents, earnings per share disappointed; the Street had expected 86 cents.

Now, about Avastin. Currently FDA-approved for treating breast, lung, and colorectal cancers, Avastin isn't approved for use in combination with Pfizer's Sutent. The company had been running a Phase II trial on the combo. Yesterday, the FDA announced that patients had developed microanegiopathic hemolytic anemia during that study, and Genentech halted it and two others looking at Avastin in combination with Sutent. The anemia cases resolved themselves within three weeks after the patients stopped using both meds.

- find the FDA alert on Avastin
- see the earnings basics in the New York Times
- check out the Wall Street Journal's take
- read the Forbes story

Genentech, J&J earnings expected to rise

Tracy Staton — Mon, 14 Jul 2008 09:46:58 -0400

It's a big couple weeks for earnings, and so a couple of newspapers are offering a rundown on which pharma companies will report when and what results we're likely to see. Naturally, we're passing the news along so you can know what to expect. Here are the highlights; click through for more details.

Genentech reports later today; analysts are estimating earnings of 86 cents a share, compared year-over-year with 78 cents. As the Wall Street Journal Health Blog notes, it's the first full quarter with Avastin approved as a breast cancer treatment.
Johnson & Johnson unfurls its results tomorrow, and the market is expecting to see results from the company's aggressive cost-cutting program. Plus, the company lost Risperdal patent protection, but a copycat form didn't hit the market till quarter's end. Analysts think J&J will bring in $1.12 per share compared with $1.05 a year ago.
Merck has had a tough quarter, what with the FDA's rejection of Cordaptive, continued trouble on the Vytorin/Zetia front, and flattening Gardasil sales. Its earnings hit the news on July 21.
Pfizer's earnings could take a hit from falling scrips: Chantix, because of psychiatric safety concerns, and Lipitor because of competition from generic simvastatin. We'll see on July 23.
Amgen reports its numbers July 28, and though its anemia-drug sales are still down, the company has affirmed its 2008 earnings expectations.

Stay tuned as the numbers hit the street. We'll pass those along, too.

- see Boston Globe's earnings calendar
- check out the roundup at the Health Blog

AZ stock leaps on Seroquel hearing news

Tracy Staton — Tue, 20 May 2008 09:53:43 -0400

Color AstraZeneca hopeful. A U.S. court hearing over Seroquel's patents has been bumped forward to today from June 4, boosting speculation that the drugmaker might just come out on top in the high-stakes case. (It hasn't hurt AstraZeneca's stock, either.) Today's hearing is to consider AstraZeneca's request for summary judgment in the case; a decision might not be handed down today, though.

Back in February, AstraZeneca announced it would seek an early decision in its Seroquel patent fight with generics giant Teva Pharmaceutical Industries. At risk: AstraZeneca's $4 billion antipsychotic drug, the company's second-biggest seller, accounting for an expected 28 percent of 2008 earnings. If the judge decides not to grant summary judgment, the Seroquel fight is set to go to trial in August.

- read the article at MarketWatch
- see the Forbes piece
- check out The Guardian's take