Fear not, pharma. There really might be hope ahead. Or such is the feeling among analysts chuffed by the early success of three new drugs. You know the ones: Bristol-Myers Squibb's melanoma drug Yervoy, which racked up $95 million in sales during its first few months on the market. Vertex Pharmaceuticals' hepatitis C treatment Incivek, whose $74.5 million in early revenues blew estimates away. And Amgen's Xgeva bone drug, which brought in $75 million during its first full quarter on the market.
"They are all first-in-class drugs for diseases that have not been well treated prior," Miller Tabak portfolio manager Les Funtleyder told Reuters. In Incivek's case, noted Sanford Bernstein analyst Geoffrey Porges, the drug is "dramatically altering the outlook for [hepatitis C] patients and they're lining up at physicians' offices." And as ISI Group's Mark Schoenbaum told the news service, Incivek and Yervoy are so impressive that [it] becomes medically unacceptable to not use them in patients."
Bottom line: "If companies can deliver drugs that deliver the goods, they are going to be successful," Funtleyder said.
Of course, that's easier said than done. But let's go with it for a moment. Analysts have set higher price targets for these three companies, in some cases, much higher. Reuters figures that the most optimistic among them see 47% growth for BMS and 63% for Amgen stock; Vertex, the optimists predict, could almost double. Compare that with forecasts for drugmakers that haven't produced a cutting-edge treatment lately.
- see the Reuters analysis
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