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This week, J&J (JNJ - Free Report) and Novartis (NVS - Free Report) began the earnings season for the drug & biotech sector. Both companies beat estimates for earnings and sales. Roche’s (RHHBY - Free Report) investigational oral weight loss GLP-1 therapy achieved positive results in an early-stage study. AbbVie (ABBV - Free Report) filed applications seeking approval of its drug Rinvoq for a new indication.
Recap of the Week’s Most Important Stories
J&J Q2 Earnings & Sales Beat: J&J’s second-quarter results were strong as it beat estimates for both earnings and sales. Sales in J&J’s Innovative Medicines segment (previously the Pharmaceutical segment) rose 5.5% year over year to $14.49 billion.
Higher sales of key products such as Darzalex, Stelara, Tremfya, Uptravi and Erleada drove the segment’s growth. New drugs like Carvykti, Tecvayli and Spravato also contributed to growth. The sales growth was partially dampened by lower sales of Imbruvica, COVID-19 vaccine and generic/biosimilar competition to drugs like Zytiga and Remicade. MedTech segment sales came in at $7.96 billion, up 2.2% from the year-ago period.
J&J maintained its total revenue expectations in the range of $88.0 billion-$88.4 billion for 2024. However, the earnings guidance was lowered from a range of $10.57-$10.72 per share to $9.97-$10.07 per share to account for the financing costs associated with recent acquisitions.
NVS Beats Q2 Earnings, Ups Operating Income Guidance: Novartis’ second-quarter results were better than expected as it beat estimates for both earnings as well as sales. It also raised its growth expectations for operating income in 2024 while keeping the top-line growth range intact. Its sales rose 11% at constant currency (“cc”) in the quarter, driven by the continued strong performance of Entresto, Kesimpta, Kisqali, Cosentyx, Pluvicto and Leqvio.
Core operating income rose 19% at cc. Novartis expects 2024 net sales to grow in the high single to low double-digits range. Core operating income is projected to grow in the mid-to-high teens range, up from prior expectations of low double digits to the mid-teens range.
Positive Data From Early-Stage Study on Roche’s Oral GLP-1 Obesity Candidate: Roche’s phase I study on its pipeline candidate, CT-996, an oral GLP-1 therapy, showed clinically meaningful weight loss in people with obesity. The data showed that after four weeks of treatment, CT-996 resulted in a clinically meaningful mean weight loss of 7.3% in participants with obesity and without type II diabetes versus 1.2% in placebo. The safety and tolerability of the candidate was consistent with other oral GLP-1 receptor agonists.
This is the second positive data readout from Roche from an obesity study in less than three months. In May, management reported encouraging data from a phase Ib study on another obesity candidate, CT-388. Data from the study showed that patients who received this once-weekly, subcutaneously injected drug achieved a mean placebo-adjusted weight loss of 18.8%. Both CT-996 and CT-388 are incretin-based candidates, which were added with the acquisition of private biotech Carmot Therapeutics in January.
AbbVie Seeks Approval for Rinvoq for New Indication: AbbVie submitted regulatory applications to both the FDA and the European Medicines Agency, seeking approval for its JAK inhibitor, Rinvoq for giant cell arteritis (“GCA”), an autoimmune disease-causing inflammation of the large arteries.
The regulatory filings for GCA were based on data from the phase III SELECT-GCA study. Rinvoq is a key top-line driver for AbbVie. It is already approved for seven immune-mediated inflammatory diseases and is being studied in late-stage studies for some others like systemic lupus erythematosus, hidradenitis suppurativa vitiligo and Takayasu arteritis.
The NYSE ARCA Pharmaceutical Index declined 3.06% in the last five trading sessions.
Image: Bigstock
Pharma Stock Roundup: JNJ, NVS Q2 Earnings, RHHBY's Positive Obesity Pill Data
This week, J&J (JNJ - Free Report) and Novartis (NVS - Free Report) began the earnings season for the drug & biotech sector. Both companies beat estimates for earnings and sales. Roche’s (RHHBY - Free Report) investigational oral weight loss GLP-1 therapy achieved positive results in an early-stage study. AbbVie (ABBV - Free Report) filed applications seeking approval of its drug Rinvoq for a new indication.
Recap of the Week’s Most Important Stories
J&J Q2 Earnings & Sales Beat: J&J’s second-quarter results were strong as it beat estimates for both earnings and sales. Sales in J&J’s Innovative Medicines segment (previously the Pharmaceutical segment) rose 5.5% year over year to $14.49 billion.
Higher sales of key products such as Darzalex, Stelara, Tremfya, Uptravi and Erleada drove the segment’s growth. New drugs like Carvykti, Tecvayli and Spravato also contributed to growth. The sales growth was partially dampened by lower sales of Imbruvica, COVID-19 vaccine and generic/biosimilar competition to drugs like Zytiga and Remicade. MedTech segment sales came in at $7.96 billion, up 2.2% from the year-ago period.
J&J maintained its total revenue expectations in the range of $88.0 billion-$88.4 billion for 2024. However, the earnings guidance was lowered from a range of $10.57-$10.72 per share to $9.97-$10.07 per share to account for the financing costs associated with recent acquisitions.
NVS Beats Q2 Earnings, Ups Operating Income Guidance: Novartis’ second-quarter results were better than expected as it beat estimates for both earnings as well as sales. It also raised its growth expectations for operating income in 2024 while keeping the top-line growth range intact. Its sales rose 11% at constant currency (“cc”) in the quarter, driven by the continued strong performance of Entresto, Kesimpta, Kisqali, Cosentyx, Pluvicto and Leqvio.
Core operating income rose 19% at cc. Novartis expects 2024 net sales to grow in the high single to low double-digits range. Core operating income is projected to grow in the mid-to-high teens range, up from prior expectations of low double digits to the mid-teens range.
Positive Data From Early-Stage Study on Roche’s Oral GLP-1 Obesity Candidate: Roche’s phase I study on its pipeline candidate, CT-996, an oral GLP-1 therapy, showed clinically meaningful weight loss in people with obesity. The data showed that after four weeks of treatment, CT-996 resulted in a clinically meaningful mean weight loss of 7.3% in participants with obesity and without type II diabetes versus 1.2% in placebo. The safety and tolerability of the candidate was consistent with other oral GLP-1 receptor agonists.
This is the second positive data readout from Roche from an obesity study in less than three months. In May, management reported encouraging data from a phase Ib study on another obesity candidate, CT-388. Data from the study showed that patients who received this once-weekly, subcutaneously injected drug achieved a mean placebo-adjusted weight loss of 18.8%. Both CT-996 and CT-388 are incretin-based candidates, which were added with the acquisition of private biotech Carmot Therapeutics in January.
AbbVie Seeks Approval for Rinvoq for New Indication: AbbVie submitted regulatory applications to both the FDA and the European Medicines Agency, seeking approval for its JAK inhibitor, Rinvoq for giant cell arteritis (“GCA”), an autoimmune disease-causing inflammation of the large arteries.
The regulatory filings for GCA were based on data from the phase III SELECT-GCA study. Rinvoq is a key top-line driver for AbbVie. It is already approved for seven immune-mediated inflammatory diseases and is being studied in late-stage studies for some others like systemic lupus erythematosus, hidradenitis suppurativa vitiligo and Takayasu arteritis.
The NYSE ARCA Pharmaceutical Index declined 3.06% in the last five trading sessions.
Large Cap Pharmaceuticals Industry 5YR % Return
Large Cap Pharmaceuticals Industry 5YR % Return
Here’s how the eight major stocks performed in the last five trading sessions.
Image Source: Zacks Investment Research
In the last five trading sessions, J&J rose the most (3.8%), while Lilly declined the most (9.1%).
In the past six months, Lilly has risen the most (34.5%), while J&J has declined the most (4.4%).
(See the last pharma stock roundup here: Pharma Stock Roundup: LLY to Buy Morphic, PFE Advances Obesity Drug Development)
What's Next in the Pharma World?
Watch this space for the second-quarter results of AstraZeneca, AbbVie & Sanofi and regular pipeline and regulatory updates next week.
Novartis, AbbVie and Roche have a Zacks Rank #3 (Hold) each, while J&J is a #4 Ranked (Sell) stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.