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Drug Roundup – April 17, 2014

There have been several noteworthy developments in the drug space recently, which will likely have a material impact on the companies in this sector and the markets they serve. Companies mentioned in this review include Teva Pharmaceutical Industries Ltd. (TEVA), Pfizer Inc. (PFE - Free Pfizer Stock Report), Merck & Co. (MRK - Free Merck Stock Report), Eli Lilly & Co. (LLY), Bristol-Myers Squibb (BMY), and AbbVie Inc. (ABBV).

First-Quarter Earnings Season

With the majority of “Large Pharma” scheduled to release first-quarter results in the coming weeks, investors will be eager to see how companies are faring in the early stages of 2014. Coming off such a strong 2013, in which the group handily outperformed the broader market averages, expectations will likely be high. Per usual, key items to focus on in the upcoming conference calls include the impacts of recent patent losses, emerging generic competition, pipeline activity, and integration progress for the companies that completed acquisitions or mergers. Some noteworthy earnings release dates include: Eli Lilly & Co. (April 24th), Bristol-Myers Squibb (April 29th), Merck & Co. (April 29th), and Pfizer Inc. (May 5th).

Merck Gains Approval for Allergy Drug

On April 14th, New Jersey-based Merck announced that the FDA approved Grastek, a new tablet for grass allergies in patients five to 65 years old. The tablet represents an alternative to standard weekly allergy shots, and dissolves under the tongue. When taken daily over a period of a few years, it’s designed to gradually reduce allergic reactions to common grasses (e.g. sneezing, coughing, watery eyes), instead of just offering temporary relief. Merck indicated that Grastek will be available in U.S. pharmacies by late April.

Teva to Release Generic Celebrex by Year’s End

On April 17th, the Israel-based drugmaker announced that it had settled its patent litigation with Pfizer and will launch its generic version of the blockbuster pain medication in December, 2014. The news comes more than a month after regulators invalidated a patent covering the drug, opening the door for cheaper generics to enter the market following its expiration on May 30th. Although somewhat expected, the loss of Celebrex will represent a significant blow to Pfizer’s top line post-2014. The drug was Pfizer’s fourth-highest selling product last year, generating sales of $2.9 billion.

The Race for Hep-C Cure is a Top Story

The race to produce an effective Hepatitis C treatment has been one of the hottest topics in the industry over the past year. With so much at stake (annual peak sales projections have ranged from $5 billion to $16 billion), some of the biggest names in the industry have diverted substantial resources toward fielding a potential candidate. While Gilead Sciences appears to be the odds on favorite given its superior late-stage trial results, other drug giants including AbbVie, Merck, and Bristol Myers are all still in the mix. With an estimated 170 million people believed to be infected with Hepatitis C worldwide, an approved treatment would represent a huge opportunity for the first company to market.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.