Pharma Stock Roundup: Earning Reports from Major Drugmakers

The third-quarter earnings season was at its peak for major pharmaceutical companies this week, as Eli Lilly (LLY - Free Report), Merck (MRK - Free Report), Pfizer (PFE - Free Report), AbbVie (ABBV - Free Report), and Novartis (NVS - Free Report) announced their quarterly results.

LLY’s Disappointing Q3 Earnings

Eli Lilly’s third-quarter results did not meet expectations, missing both earnings and sales estimates, and subsequently, the company lowered its financial outlook for the year. Key drugs such as Mounjaro, Zepbound, Jardiance, and Verzenio underperformed during this quarter.

Revenues reached $11.44 billion, marking a 20% year-over-year increase. However, sales for Lilly's prominent diabetes drug Mounjaro and weight loss medication Zepbound fell short of expectations due to inventory challenges. Mounjaro generated sales of $3.11 billion this quarter, slightly up from $3.09 billion in the prior quarter, while Zepbound achieved $1.26 billion, a modest increase from $1.24 billion.

In light of the results, Lilly reduced the upper limit of its revenue guidance for the year, now projecting total revenues between $45.4 billion to $46.0 billion, down from a previous range of $45.4 billion to $46.6 billion. Earnings per share (EPS) expectations were revised downward to a range of $13.02 to $13.52, significantly lower than the previous estimate of $16.10 to $16.60.

Merck Beats Estimates but Cuts 2024 View

Merck's earnings and sales beat expectations this quarter. However, the company reported a 23% decline in earnings year-over-year (excluding currency effects), though revenues climbed 7%. Sales of the blockbuster cancer treatment Keytruda rose 17%, benefiting from rapid adoption in earlier-stage indications and sustained growth in metastatic conditions. In contrast, sales for the HPV vaccines Gardasil and Gardasil 9 dipped by 10%, mainly due to reduced demand in China, and sales of diabetes medications Januvia/Janumet fell 38% year-over-year.

Merck also updated its sales guidance for 2024, narrowing the range from $63.4-$64.4 billion to $63.6-$64.1 billion, while adjusted EPS guidance decreased from $7.94-$8.04 to $7.72-$7.77.

This week, Merck and its partner Moderna commenced a second pivotal phase III trial of their personalized mRNA therapeutic cancer vaccine (V940/mRNA-4157) combined with Keytruda in patients with resectable stage II, IIIA, or IIIB non-small cell lung cancer who have not achieved a complete response following treatment with Keytruda and chemotherapy.

PFE Beats Expectations, Ups 2024 Guidance

Pfizer reported strong third-quarter results, surpassing both earnings and sales forecasts. Revenues soared 32% on an operational basis, driven by surging sales of non-COVID products such as Vyndaqel and Eliquis, along with new product launches and acquisitions from Seagen. Pfizer's COVID-related products also contributed significantly to growth during this quarter, particularly increased demand for Paxlovid.

Sales from Seagen drugs amounted to $854 million this quarter. While revenues from Pfizer's non-COVID products were up 14% operationally in the third quarter, key drugs like Xeljanz and Ibrance showed a decline.

Consequently, Pfizer raised its 2024 earnings and revenue guidance for the second time this year. The adjusted EPS guidance now ranges from $2.75 to $2.95 per share, compared to the previous range of $2.45 to $2.65, while revenue expectations increased from $59.5 billion-$62.5 billion to $61.0 billion-$64.0 billion.

ABBV Rides High With Skyrizi, Rinvoq

AbbVie surpassed both earnings and sales expectations this quarter, with a 4.9% year-over-year sales increase propelled by increased sales of key treatments like Rinvoq, Skyrizi, Venclexta, and Vraylar. Notably, sales from immunology drugs Rinvoq and Skyrizi surged by 47.4% and 51.5%, respectively, due to label expansions that included new patient populations. AbbVie also upgraded its adjusted EPS guidance for 2024 to a target range of $10.90 to $10.94, up from the previous $10.67 to $10.87.

Furthermore, AbbVie announced an agreement to acquire Aliada, a private biotech, for $1.4 billion. Aliada specializes in neuroscience drugs and is developing an antibody for Alzheimer’s disease currently in phase I trials. The deal is anticipated to close in the fourth quarter.

Additionally, AbbVie entered into a collaboration and option-to-license agreement with EvolveImmune Therapeutics to develop next-gen cancer biotherapeutics using EvolveImmune's innovative platform, with AbbVie making an upfront payment of $65 million and potential additional payments of up to $1.4 billion.

NVS Beats EPS & Sales Estimates

Novartis also exceeded expectations with its third-quarter earnings and sales. The company reported a 10% increase in sales at constant currency, driven by strong performance across several products, including Entresto, Kesimpta, Kisqali, Cosentyx, Pluvicto, and Leqvio.

Core operating income rose by an impressive 123% at constant currency, leading Novartis to raise its revenue and income growth expectations for 2024. The company now anticipates net sales to increase in the low double-digit range, compared to an earlier estimate of a high single to low double-digit increase. Core operating income growth is expected to be in the high teens, up from earlier projections of mid-to-high teens.

Novartis also announced that the FDA granted accelerated approval for Scemblix for expanded use in first-line treatment of Philadelphia chromosome-positive chronic myeloid leukemia in the chronic phase. This decision, based on the results of the ASC4FIRST phase III trial, is expected to significantly increase the number of eligible patients.

During the last five trading sessions, the NYSE ARCA Pharmaceutical Index experienced a decline of 2.34%. Among major stocks, AbbVie showed the highest increase at 7.5%, while Lilly faced the most significant decline at 7.2%.

In the past six months, Lilly's stock rose the most at 28.6%, while Merck's stock saw the largest decline at 20.2%.

Next week, investors will look out for updates on NVO’s third-quarter earnings along with regular pipeline and regulatory updates.

Currently, Pfizer, Merck, AbbVie, and Lilly share a Zacks Rank of #3 (Hold), while Novartis boasts a Zacks Rank of #2 (Buy).

Pharma, Earnings, LLY, MRK, PFE, ABBV, NVS