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The broader market index, S&P 500, has been declining since the beginning of 2022 as the economy reels under the pressure of uncertainty related to macro factors, including interest rate hike, supply chain constraints and higher inflation.
The uncertainty around the macro factors has hurt the majority of medical sector indices more than the wider market index. While S&P 500 is down 3.7% so far this year, the Medical sector has declined 6.3%. Within the Medical sector, the Large Cap Pharmaceuticals industry has declined 2.9%. The Biomedical and Genetics industry has declined 10.9% while the Drugs industry has declined 9.5% year to date.
Amid this turmoil, investors can place their bets on these five big pharma and biotech companies — Sanofi, AbbVie, Bristol-Myers, Amgen and Vertex Pharmaceuticals — that have outperformed their sector index as well as the wider Medical and S&P 500 indices.
We note that the Federal Reserve kept the federal interest rate target range unchanged in its recently-concluded meeting last month. However, the monetary policymakers for the United States have hinted at increasing the federal interest rate target range soon amid a high inflation rate.
Moreover, the COVID-19 pandemic had disrupted the supply chain for companies across the globe in the past two years, hurting the delivery of raw materials as well as finished products. The supply-chain issues have resulted in lower revenues for several companies. Although the supply-chain constraint seems to ease as COVID-19 vaccines and drugs are helping to restrict the spread of infection cases, the uncertainty still lingers.
All the five companies — Sanofi, AbbVie, Bristol-Myers, Amgen and Vertex — are still in positive territory on the back of strong fundamentals, which are likely to help them thrive going forward in 2022.
Demand for Sanofi’s key drug, Dupixent was robust in 2021 driven by continued growth in atopic dermatitis and rapid uptake in asthma and chronic rhinosinusitis with nasal polyposis indications. The strong performance of the drug is likely to continue as it gains market share despite COVID-related fewer physician visits. Moreover, multiple approvals for new indications are expected in the near future.
Sanofi also possesses a leading vaccine operation, another key driver for the company’s top line.
Sanofi has several promising candidates in its pipeline with several of them in late-stage development. Study data readouts lined up for 2022 will be one of the factors driving the company’s share price. Potential approval to new drugs from Sanofi’s pipeline will boost revenues.
The company’s new products are now delivering revenues greater than the loss of exclusivity impact. Moreover, Sanofi’s cost savings come from the simplification of its organization, enhanced manufacturing productivity, streamlining of product portfolio and alignment of the sales force.
AbbVie has several drivers that are likely to help it deliver a robust performance going forward. First, AbbVie has been successful in expanding the labels of its cancer drugs, Imbruvica and Venclexta.
These two oncology drugs have been witnessing strong demand across the majority of their approved indications, which is expected to continue in 2022, driving sales of these drugs further. Second, the company has been successfully developing two immunology drugs — Skyrizi and Rinvoq — and expanding their targeted patient population through label expansions.
These two drugs are being built as a replacement for its biggest drug, Humira — which is set to lose patent exclusivity in the United States next year. The loss of exclusivity for Humira in the United States will likely dent AbbVie’s top line significantly.
However, Skyrizi and Rinvoq will likely help cushion the loss. The company is also confident that these two drugs along with other key drugs will help it return to growth in 2024 following Humira’s patent loss in 2023.
Moreover, the addition of Botox with the acquisition of Allergan created a significant revenue stream for AbbVie with strong growth potential. Other key drugs like Juvederm added with the Allergan acquisition are also benefiting the company well. The rise in sales of Allergan’s drugs is likely to continue in 2022 on the back of strong demand.
Bristol-Myers witnessed a recovery in 2021 as Opdivo sales returned to growth after a slowdown in 2020. The recovery in Opdivo sales is likely to continue in 2022 with a likely improvement in physician visits as well as its recent label expansion in lung cancer, renal cancer and gastric cancer.
The stellar performance of key drugs, namely Revlimid and Eliquis, should sustain their strong momentum in 2022. Eliquis is the leading oral anticoagulant drug and continues to experience growth in its market share. Revlimid continues to gain from demand for triple-based therapies and increasing treatment duration.
The company has also been boosting its commercial portfolio by gaining approvals for new drugs. These new drugs are also slated to bring additional revenues for the company in 2022.
Amgen’s newer drugs like Prolia, Evenity and Xgeva have been witnessing an increase in sales on the back of incremental market share or label expansions. Moreover, the company reported higher sales from its biosimilar portfolio in 2021. The growth of key drugs and biosimilars is likely to continue in 2022.
Moreover, Amgen has several interesting candidates in its pipeline, which represent significant commercial potential. A promising drug, Lumakras, was approved by the FDA in May 2021 followed by the European Commission last month for treating advanced non-small cell lung cancer. This drug has the potential to bring significant revenues for the company as it targets the lucrative lung cancer market.
Recently, Amgen provided a robust outlook for the decade ending 2030. Amgen estimates its revenues to increase by mid-single-digit percentage points every year till 2030. The adjusted earnings are expected to exhibit a compound annual growth rate in the range of high single-digit to low double-digit percentage points in the same timeframe.
The company expects its biosimilar revenues to more than double by 2030 compared with 2021 sales. The company not only has the potential to boost investors’ wealth in 2022 but can also grow wealth throughout the decade.
Vertex’s cystic franchise (“CF”) has demonstrated strong growth despite the impact of the pandemic, mainly driven by its triple therapy, Trikafta/Kaftrio. Consistent positive regulatory approvals have led to the strong growth in revenues. Moreover, Vertex faces only minimal competition in its core CF franchise. We expect the company’s CF franchise performance to be stronger as the negative impacts of COVID-19 gradually wither away.
Meanwhile, Vertex has a broad clinical non-CF pipeline across six disease areas, which are progressing rapidly with data from multiple programs expected in 2022. Any positive non-CF pipeline updates will drive the company’s share price as it will create an opportunity to diversify its revenue stream.
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Industry Outlook Highlights: Sanofi, AbbVie, Bristol-Myers, Amgen and Vertex Pharmaceuticals
For Immediate Release
Chicago, IL – February 14, 2022 – Today, Zacks Equity Research discusses Sanofi (SNY - Free Report) , AbbVie (ABBV - Free Report) , Bristol-Myers (BMY - Free Report) , Amgen (AMGN - Free Report) and Vertex Pharmaceuticals (VRTX - Free Report) .
Industry: Big Pharma
Link: https://www.zacks.com/stock/news/1866486/will-the-rally-of-these-5-big-drugmakers-continue-in-2022
The broader market index, S&P 500, has been declining since the beginning of 2022 as the economy reels under the pressure of uncertainty related to macro factors, including interest rate hike, supply chain constraints and higher inflation.
The uncertainty around the macro factors has hurt the majority of medical sector indices more than the wider market index. While S&P 500 is down 3.7% so far this year, the Medical sector has declined 6.3%. Within the Medical sector, the Large Cap Pharmaceuticals industry has declined 2.9%. The Biomedical and Genetics industry has declined 10.9% while the Drugs industry has declined 9.5% year to date.
Amid this turmoil, investors can place their bets on these five big pharma and biotech companies — Sanofi, AbbVie, Bristol-Myers, Amgen and Vertex Pharmaceuticals — that have outperformed their sector index as well as the wider Medical and S&P 500 indices.
We note that the Federal Reserve kept the federal interest rate target range unchanged in its recently-concluded meeting last month. However, the monetary policymakers for the United States have hinted at increasing the federal interest rate target range soon amid a high inflation rate.
Moreover, the COVID-19 pandemic had disrupted the supply chain for companies across the globe in the past two years, hurting the delivery of raw materials as well as finished products. The supply-chain issues have resulted in lower revenues for several companies. Although the supply-chain constraint seems to ease as COVID-19 vaccines and drugs are helping to restrict the spread of infection cases, the uncertainty still lingers.
All the five companies — Sanofi, AbbVie, Bristol-Myers, Amgen and Vertex — are still in positive territory on the back of strong fundamentals, which are likely to help them thrive going forward in 2022.
While Vertex carries a Zacks Rank #2 (Buy), Sanofi, AbbVie, Bristol-Myers and Amgen carry a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sanofi
Demand for Sanofi’s key drug, Dupixent was robust in 2021 driven by continued growth in atopic dermatitis and rapid uptake in asthma and chronic rhinosinusitis with nasal polyposis indications. The strong performance of the drug is likely to continue as it gains market share despite COVID-related fewer physician visits. Moreover, multiple approvals for new indications are expected in the near future.
Sanofi also possesses a leading vaccine operation, another key driver for the company’s top line.
Sanofi has several promising candidates in its pipeline with several of them in late-stage development. Study data readouts lined up for 2022 will be one of the factors driving the company’s share price. Potential approval to new drugs from Sanofi’s pipeline will boost revenues.
The company’s new products are now delivering revenues greater than the loss of exclusivity impact. Moreover, Sanofi’s cost savings come from the simplification of its organization, enhanced manufacturing productivity, streamlining of product portfolio and alignment of the sales force.
Shares of SNY have gained 5.6% so far this year.
Sanofi price | Sanofi Quote
AbbVie
AbbVie has several drivers that are likely to help it deliver a robust performance going forward. First, AbbVie has been successful in expanding the labels of its cancer drugs, Imbruvica and Venclexta.
These two oncology drugs have been witnessing strong demand across the majority of their approved indications, which is expected to continue in 2022, driving sales of these drugs further. Second, the company has been successfully developing two immunology drugs — Skyrizi and Rinvoq — and expanding their targeted patient population through label expansions.
These two drugs are being built as a replacement for its biggest drug, Humira — which is set to lose patent exclusivity in the United States next year. The loss of exclusivity for Humira in the United States will likely dent AbbVie’s top line significantly.
However, Skyrizi and Rinvoq will likely help cushion the loss. The company is also confident that these two drugs along with other key drugs will help it return to growth in 2024 following Humira’s patent loss in 2023.
Moreover, the addition of Botox with the acquisition of Allergan created a significant revenue stream for AbbVie with strong growth potential. Other key drugs like Juvederm added with the Allergan acquisition are also benefiting the company well. The rise in sales of Allergan’s drugs is likely to continue in 2022 on the back of strong demand.
Shares of ABBV have gained 5.4% so far this year.
AbbVie Inc. price | AbbVie Inc. Quote
Bristol-Myers
Bristol-Myers witnessed a recovery in 2021 as Opdivo sales returned to growth after a slowdown in 2020. The recovery in Opdivo sales is likely to continue in 2022 with a likely improvement in physician visits as well as its recent label expansion in lung cancer, renal cancer and gastric cancer.
The stellar performance of key drugs, namely Revlimid and Eliquis, should sustain their strong momentum in 2022. Eliquis is the leading oral anticoagulant drug and continues to experience growth in its market share. Revlimid continues to gain from demand for triple-based therapies and increasing treatment duration.
The company has also been boosting its commercial portfolio by gaining approvals for new drugs. These new drugs are also slated to bring additional revenues for the company in 2022.
Shares of BMY have gained 6.7% so far this year.
Bristol Myers Squibb Company price | Bristol Myers Squibb Company Quote
Amgen
Amgen’s newer drugs like Prolia, Evenity and Xgeva have been witnessing an increase in sales on the back of incremental market share or label expansions. Moreover, the company reported higher sales from its biosimilar portfolio in 2021. The growth of key drugs and biosimilars is likely to continue in 2022.
Moreover, Amgen has several interesting candidates in its pipeline, which represent significant commercial potential. A promising drug, Lumakras, was approved by the FDA in May 2021 followed by the European Commission last month for treating advanced non-small cell lung cancer. This drug has the potential to bring significant revenues for the company as it targets the lucrative lung cancer market.
Recently, Amgen provided a robust outlook for the decade ending 2030. Amgen estimates its revenues to increase by mid-single-digit percentage points every year till 2030. The adjusted earnings are expected to exhibit a compound annual growth rate in the range of high single-digit to low double-digit percentage points in the same timeframe.
The company expects its biosimilar revenues to more than double by 2030 compared with 2021 sales. The company not only has the potential to boost investors’ wealth in 2022 but can also grow wealth throughout the decade.
Shares of AMGN have gained 1.7% so far this year.
Amgen Inc. price | Amgen Inc. Quote
Vertex
Vertex’s cystic franchise (“CF”) has demonstrated strong growth despite the impact of the pandemic, mainly driven by its triple therapy, Trikafta/Kaftrio. Consistent positive regulatory approvals have led to the strong growth in revenues. Moreover, Vertex faces only minimal competition in its core CF franchise. We expect the company’s CF franchise performance to be stronger as the negative impacts of COVID-19 gradually wither away.
Meanwhile, Vertex has a broad clinical non-CF pipeline across six disease areas, which are progressing rapidly with data from multiple programs expected in 2022. Any positive non-CF pipeline updates will drive the company’s share price as it will create an opportunity to diversify its revenue stream.
Shares of VRTX have gained 7.5% so far this year.
Vertex Pharmaceuticals Incorporated price | Vertex Pharmaceuticals Incorporated Quote
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From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.