A Look at Four Biotech Giants' Q2 Earnings
July 29, 2016
By Mark Terry, BioSpace.com Breaking News Staff
It’s half-year earnings season, and four of the biggest biotech companies have released their reports. Here’s a look at Amgen , Biogen , Celgene and Gilead Sciences .
Amgen
Amgen , located in Thousand Oaks, California, showed a 6 percent increase in revenue from the second quarter of 2015. The company’s Enbrel (etanercept), Prolia (denosumab), Kyprolis (carfilzomib) and Xgeva (denosumab) drove product sales by 5 percent.
“We delivered another strong quarter and are on track to meet or exceed our long-term objectives,” said Robert Bradway, Amgen’s chairman and chief executive officer, in a statement. “We are in the early stages of a new product launch cycle and have several additional pipeline opportunities rapidly nearing regulatory milestones.”
Second quarter revenues hit $5.7 billion, about $100 million more than analysts projected. As a result, the company raised its profit guidance. “In a year of disappointing earnings for some of the large-caps, Amgen appears to be the face of consistency,” wrote Brian Skorney, an analyst with Robert W. Baird, in a note to clients. “We are waiting to see what the company does next to fill the holes left by declines as biosimilar competition gets closer to eroding sales of the mainstay blockbuster products.”
Biogen
Cambridge, Massachusetts-based Biogen , had a good quarter, with total revenues of $2.9 billion, up 12 percent compared to the same period in 2015. They were driven mostly by global revenues from its multiple sclerosis (MS) and hemophilia products.
At the same time, the company announced that its chief executive, George Scangos, was leaving the company. He drove the company toward its powerful position in the MS market, and has been engineering its shift in focus to Alzheimer’s.
“We don’t envy Dr. Sangos’ replacement,” wrote Geoffrey Porges, an analyst with U.S. Leerink, in a note to clients. “As Biogen continues to double down on multiple sclerosis and Alzheimer’s, the new CEO will likely need to guide the company through a difficult decision tree ranging from pursuing a large acquisition to considering an outright sale.”
Celgene
Celgene , based in Summit, New Jersey, reported net product sales of $2.75 billion for the second quarter, up 22 percent from the same period in 2015. Like most everyone, the company took a negative impact from currency values.
“Our first-half 2016 operating results were outstanding and we are pleased with the progress made advancing many key corporate objectives,” said Mark Alles, Celgene’s chief executive officer, in a statement. “This strong momentum increases our confidence in our near- and longer-term outlook as we continue to invest in innovative research and the development of transformational therapies for patients worldwide.”
The company’s revenues were about 2 percent more than analysts were projecting. Forbes writes, “While Revlimid is the golden goose, Celgene is adding to its product lineup with cash from apremilast (Otezla), an oral pill designed to inhibit the PDE4 enzyme, which gives it an unusual way of working against psoriasis and psoriatic arthritis.”
Gilead
Gilead , headquartered in Foster City, California, showed total revenues by June 30, 2016 of $7.8 billion compared to $8.2 billion in 2015. Net income was $3.5 billion compared to $4.5 billion in 2015 in the same period. Total product sales for the second quarter were $7.7 billion, down from $8.1 billion for the same period in 2015.
Some of the drop is caused by pricing pressures in the U.S. for hepatitis C drugs, both from payers and from competitors. The company, as a result, dropped this year’s revenue forecast by $500 million, and investors and analysts are pushing for the company to make some acquisitions to prop up lagging sales.
“It’s internal pipeline does not seem to have the scope, or probability of success,” wrote Porges in a note to clients, “to materially improve its outlook or offset what increasingly looks like a steadily eroding mountain of HCV revenue.”