Merck, Sanofi, J&J, ThermoFisher, Novo Nordisk, Eli Lilly

Pharma Q1 reports are rolling in, COVID boost turned sustainable, and weight loss battle looms

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Story References
Merck
Sanofi
J&J
ThermoFisher
Novo Nordisk
Eli Lilly

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Life Science Today is your source for stories, insights, and trends across the life science industry. Expect weekly highlights about new technologies, pharmaceutical mergers and acquisitions, news about the moves of venture capital and private equity, and how the stock market responds to biotech IPOs. Life Science Today also explores trends around clinical research, including the evolving patterns that determine how drugs and therapies are developed and approved. It’s news, with a dash of perspective, focused on the life science industry.

Transcript

Introduction

Welcome to Life Science Today, your source for stories, insights, and trends across the life science industry. I’m your host, Dr. Noah Goodson. This week, pharma Q1 reports are rolling in, COVID boost turned sustainable, and weight loss battle looms.  

Disclaimer

The views expressed on Life Science Today are those of the host and guests. They do not necessarily reflect the opinions of any organizations with which they are affiliated. 

Pharma Q1 Big Earnings

The Q1 earnings reports are rolling in and big pharma has mixed results 

First is Merck who dropped a mega quarter with a 50% revenue growth to $15.9B. These numbers are fueled by their COVID19 therapy LAGEVRIO which pulled in $3.2B, but also by 23% growth in Keytruda and 60% increase in GARDISIL. While the short-run bump of COVID treatments are unlikely to continue into next year, stable growth across their whole pipeline gives them solid prospects moving forward and lots of capital to re-invest across the company. 

Sanofi pulled in a much more modest 8% growth overall, but had some notable front runners, with the immunology medication Dupixent seeing a 45.7% increase, and I’d anticipate those numbers will continue to rise across this year as sales roll on globally. Sure, they don’t have any shocking multi-billion dollar COVID runs, but there are definitely numbers worth noting and perhaps speak more reasonably to the general market. 

These contrast with the numbers from Johnson and Johnson over a week ago who missed their target, growing 5%, which was less than expected. They managed to increase EPS, but this comes on the backs of operational cuts. Their COVID vaccine continues to face some challenges globally and with the world’s COVID approach changing it’s unlikely to provide the kind of multibillion dollar rocket ship companies like Pfizer have seen. But these numbers should also provide room for caution that even companies with the top numbers like Merck stand in very unstable waters with a virus that continues to evolve and a therapy that may no longer be viable by this fall.

More numbers will continue to release across this week and next – what we can see so far is that operational cuts are part of nearly every report I’ve read and have contributed to increased net earnings. This suggests pharma as a whole has synched their post-COVID belts as they refocus their pipelines in a new market context – though more reports may provide important additional context. 

Turning a COVID Boost Sustainable

ThermoFisher Scientific went gangbusters during the pandemic, dropping stunning numbers selling COVID19 therapy development and testing supplies. One of the places they leveraged those cash stockpiles was into the acquisition of the clinical research organization PPD. The $17.8B purchase on a company that went public at just over $9B a year before was a fascinating move. But it seems to have paid off. Their income in Q1 of 2022 continued to increase up 19% year-over-year, even as COVID-related sales decreased. Part of this was robust sales increases in core assets for scientific functioning, obviously COVID still contributed, but PPD themselves pulled Biopharma Services to the top of ThermoFisher’s categories, and while they didn’t grow much through the acquisition, there was still 16% core organic growth across all products, despite decreases in COVID suggesting that they may be making a successful pivot from COVID boom cycle to continued stable growth. Now, I say all of this with a big *** because ThermoFisher largely pulls their income downstream of the rest of the market if there are stable decreases in Pharma or Biotech or drug development this will absolutely ripple through their sales pipeline in the back half of this year. But for now, they seem to be on the right path to take the COVID capital and transfer it into more long-term income. 

Weight Loss On the Rise

The obesity therapy market may be heating up. Last year the FDA and EU regulators approved Novo Nordisk’s weight management therapy Wegovy, to help treat both chronic obesity for those with at least one obesity-related illnesses like diabetes. The weekly injectable GLP-1 inhibitor had shown significant clinical promise in controlling appetite neural drivers. But after approval a series of supply issues impacted the rollout and kept total sales numbers moderate as Novo paused pushing the therapy heavily until the supply chain was more secure. 

In the face of some of these rollout difficulties a new challenger has arisen. Eli Lilly has released promising data for their dual GIP/GLP-1 agonist. The phase 3 trial showed weight loss of 16% in the low dose and 22.5% in the high dose group when compared to placebo control. The ability to lose 20% of weight in a chronically obese population over a period of 72 months has massive healthcare potential benefit. Not only are these data more compelling than Novo Nordisks phase III trial results, but the adverse events appear to be at a lower threshold as well, suggesting potentially fewer side effects. 

Eli Lilly is not in the clear yet in attempting to get an similar approved therapy to market. B ut they certainly have a promising candidate and with a growing global obesity epidemic, the market for improved therapies is unlikely to decrease any time in the foreseeable future. 

Closing Credits                                                                

Thanks for joining me for Life Science Today, your source for stories, insights, and trends across the life science industry. Learn more at LifeScienceTodayPodcast.com. If you like what you hear, please tell a friend. Once again, I’m Dr. Noah Goodson, I’ll see you next week.