May 3, 2013 | By Márcio Barra
Many companies reported their first quarter earnings earlier this week. Here’s the rundown of Sanofi’s, Teva, Merck, Gilead, Novo Nordisk and Pfizer’s earnings reports:
The French pharmaceutical giant saw a 5.3% sales drop, alongside a 34% decline in profits. Unlike many of the companies discussed next however, the company was expecting these numbers, except for the profit drop, and thus Sanofi didn’t have to cut its full-year forecast. The company was expecting €1.75 billion in profits this quarter, rather than the reported €1.61 billion.
These numbers owe to Plavix, their blockbuster anticoagulant and once the worlds second-best selling prescription drug, losing its patent last year, alongside generic competition for the cancer drug Eloxatin and Avapro, their hypertension treatment.
In the future, competition from Biogen’s Tecfidera, for Multiple Sclerosis, could also hinder Aubagio’s sales.
Their diabetes drug Lantus, eased up some of these numbers, bringing in €1.338 billion in sales, together with emerging markets, which accounted for 33.7% of group sales, or 2.72 billion.
Sanofi is promising growth during the second half of 2012. Genzyme, diabetes, and emerging markets are the big promises for the next quarters.
Teva also showed some negative results in the first quarter. With their drug Provigil now facing generic competition, Teva saw its profits dropping by 26%.
To make up for these results, Teva’s CEO Jeremy Levin announced a new plan to save $2 billion from its annual costs. This includes downsizing of its manufacturing network – with several plants in the US being sold or seeing employees laid off – centralizing purchases to acquire better deals with vendors, and a new, longer-acting version of their blockbuster Copaxone, for Multiple Sclerosis.
Copaxone’s first patent is expected to end in 2014. This, alongside Biogen Idec’s new drug Tecfidera, its setting up Teva for some pressure in the future.
Merck had what analysts are calling a surprising drop in sales, especially due to the weaning sales of the diabetes drug Januvia, Merck’s biggest product. 2013’s first quarter net income was $1.59 billion, compared to $1.74 billion last year in the same period, and sales fell 9% to $10.7 billion, below the $11.09 billion Wall Street was expecting.
Januvia’s sales fell 4% to $884 million, while sales of Janumet, a combination pill containing Januvia and Metformin, rose 4% to $409 million. Combined, the sales of these two medicines fell 1% to $1.3 billion. The company expects sales of Januvia to grow at a mid-single-digit percentage range in the US and increase in the low double digits in the rest of the world later this year.
The hit in profits was also due to the considerable drop in the sales of the asthma drug Singulair, a steep 75% decrease to $337 million in the quarter, owing to generic competition in the US. Generic competition will also soon hit migraine drug Maxalt and the brain cancer drug Temodar.
Merck also recently had the Tredaptive Failure. Investors are now worried about whether the company could bring promising news drugs to the market soon.
Merck had to cut its full year forecast, as “pressures on sales that are greater than previously anticipated, “according to Merck.
Gilead comes off better than the previous companies, seeing a 63% increase in profits, even though the sales of some of its older HIV drug portfolio, like Truvada, failed to hit the same values last year. Total revenues in the first quarter were $2.53 billion, up 11%, with antiviral products making up $2.06 billion of that value.
Combo drugs Complera/Eviplera and Stribild are in high demand according to Gilead, and its upcoming oral cocktail drug sofosbuvir for hepatitis C could hit $20 billion if approved. Investors are happy to say the least.
Novo Nordisk, the Danish insulin giant, rose above its earnings expectations with a 28% increase in first-quarter profits and a 10% boost in expected profits for the year. Better than expected sales from its diabetes treatment Victoza and its range of modern insulin products, including Levemir and NovoRapid brought a net income of $1.1 billion.
Still, investors weren’t happy and were expecting more. When the FDA refused to approve the breakthrough long-acting insulin Tresiba this February, Novo could no longer count on half of its forecast sales of $2.8 billion a year by 2017 on the US (Tresiba is already approved in Europe and Japan). Still, even without the sales of Tresiba, Novo’s earnings are very good.
Pfizer reported a 9% decrease in its sales this quarter, to $13.5 billion, a lot worse than expected. Foreign exchange rates, an unexpected drop in Prevnar 13 sales by 10% and a 2% drop in sales of Enbrel are to blame, with the company’s revenue falling $440 million short of forecasts.
Surprisingly, Lipitor outperformed its generic competition, bringing in $626 million and remaining among Pfizer’s top 5 products. Viagra brought in $50 million more than expected, for a total of $461 million.
Cost control measures softened the blow, and the company is expecting its upcoming blood thinner Eliquis and the rheumatoid arthritis treatment Xeljanz to make up for this decline.