Big Pharma’s Q2 growth, ranked: Regeneron, Pfizer lead the way as sales rebound from pandemic depths

We’re not yet done with the coronavirus pandemic, but you wouldn’t know it from the second-quarter results in the pharma industry.

After a tentative first quarter of 2021—attributed to the pandemic and a change of the guard in Washington, D.C.—signs of recovery abound.

Over the last few weeks as companies have presented their quarterly numbers, most are telling a different version of the same story. Drug sales are up, with some therapeutic areas rebounding faster than others. And while the recovery is underway, there’s still a long ride ahead to return to the industry’s pre-pandemic landscape. 

The resilience of the rebound has even surprised market experts. In this round of reports, many companies exceeded Wall Street’s revenue expectations.

More than half of Big Pharma companies reported revenue increases greater than 15% over the same quarter in 2020, which was marred by lockdowns and the shock to the economic system that ensued at the start of the pandemic.

“We have generally seen solid double-digit sales growth due to increasing doctor visits and diagnosis rates and a favorable comparison to the second quarter of 2020 which was negatively impacted from stocking in the first quarter of 2020,” Ashtyn Evans, a senior analyst at Edward Jones, told Fierce Pharma. 

Companies that registered the most dramatic revenue growth were the ones that have developed COVID-19 treatments. In fact, this was the case for all six of the firms that exceeded a 20% increase, including Regeneron (up 163%) with $2.59 billion in sales for its antibody drug REGEN-COV and Pfizer (92%) with $7.8 billion in COVID-19 vaccine sales. Top-line increases for AstraZeneca (27%) and Johnson & Johnson (23%) were helped by vaccine sales, while Eli Lilly and Gilead also made gains thanks to their therapeutics.

In another class altogether was Moderna, whose vaccine sales accounted for nearly all of its increase from $67 million in second-quarter revenues in 2020 to $4.4 billion this year.

Analysts, such as Geoffrey Porges of SVB Leerink, saw the growth coming. They just didn’t take it far enough.

“We are increasing our revenue and (earnings per share) estimates across the board,” Porges said in a note to investors a month ago. “Management teams that were very cautious in their initial guidance for the year are likely to increase their guidance for the year, based on a more positive outlook in the U.S. and selected international markets.”

RELATED: Pfizer now expects COVID vaccine sales to reach $33.5B this year, a whopping $7.5 bump from its estimate three months ago

Oddly enough, the only pharma company that registered a significant revenue decline is poised to accrue a big windfall down the line. Biogen, the developer of recently approved Alzheimer’s disease drug Aduhelm, saw a 26% drop in sales to $2.7 billion, attributed in part to tumbling sales for multiple sclerosis drug Tecfidera, which is losing patients to generic competition.

While overall numbers point to a rebound, some therapy areas have been slower to respond. The first that comes to mind for Mizuho Securities analyst Salim Syed is HIV, where he notes lower screening and a 13% drop in diagnosis rates from pre-pandemic levels, led to fewer treatment starts.  

In presenting disappointing results for HIV blockbuster Biktarvy, Gilead CCO Johanna Mercier said it was clear that “it will take several quarters for treatment to return to pre-pandemic levels.” 

On the flip side, vaccines are recovering quickly. Merck’s HPV shot Gardasil raked in $1.23 billion in the quarter, an 88% increase compared with the second quarter of last year, smashing the analyst consensus projection of $1.04.

Established vaccine sales had slumped badly earlier in the pandemic as people delayed doctors visits and prioritized COVID-19 shots.

RELATED: Regeneron's COVID-19 antibodies rake in $2.6B, reflecting their market dominance and blowing away estimates

Doctor-administered drugs, such as those in the immuno-oncology class, also showed solid growth in the second quarter. Sales of the world’s best-selling cancer treatment, Merck’s Keytruda, reached $4.2 billion in the period, a bounce back from the first quarter when its sales dipped year-over-year for the first time in its short history.

"Our results demonstrate that the impact of the pandemic on our business is lessening," Merck CEO Rob Davis said during an earnings call. "Patient access to healthcare providers has improved and we expect continued growth in the remainder of the year." 

But not all cancer treatments are rebounding equally, Bernstein analyst Ronny Gal points out. In late June, he wrote to clients that "oral oncology scripts like CDKs or BTKs, for example, are still well below pre-COVID levels."

Looking ahead to the third quarter, while the spread of the Delta variant brings uncertainty, Evans sees growth continuing. She also expects to see an uptick M&A activity.

“We have a favorable view of the strong innovation and pipeline strength in the drug industry, which we believe will drive long-term growth,” Evans wrote. “In addition, balance sheets are strong and many companies are looking to add to their innovative portfolio of new drugs through acquisitions. So we could see deals pick up in the near term.”