The share prices of blue-chip biopharmaceutical companies continued on their lackluster trajectory, which started in June and collectively lost ground last month, with the BioWorld Biopharmaceutical index slipping about 1.3% as investors took a break in order to digest the deluge of COVID-19 vaccine data released during the period and the impact on the bottom lines that the pandemic has exerted among those companies that have reported their second-quarter results.
Writing in the July Biotechnology Thermometer report, Cowen & Co. analysts noted, “Sentiment toward biotech cooled a bit in July, coinciding with the first month of underperformance for the sector since January.”
Although 68% of the index member companies saw their share prices lose value in July, the Biopharmaceutical index still enjoys a year-to-date increase of 16%, well ahead of the general market, with the Dow Jones Industrial Average underwater by more than 7% during the same period. (See BioWorld Biopharmaceutical Index, below.)
Investors appear to have shifted their previous bullish outlook to a more cautious stance in the wake of drug pricing returning to the political agenda now that the presidential election race has started to heat up.
Gilead Sciences Inc. was the group’s leading decliner, with its shares (NASDAQ:GILD) dropping almost 10% in July. A portion of the slide was due to a mixed picture that the company revealed in its second-quarter financial results. Though its full-year outlook has been boosted by the pandemic, Cowen analyst Phil Nadeau commented, “GILD's Q2 financials missed consensus, with both total [revenue] ($5.14B vs. $5.33BE) and non-GAAP EPS ($1.11 vs. $1.49E) falling short. The quarter suffered from several COVID-19 headwinds to the HIV PrEP and HCV franchises, though fundamentals in GILD's HIV business remain strong.”
The company's total product sales decreased 10% to $5.1 billion for the second quarter vs. $5.6 billion for the same period in 2019. The decreases were primarily driven by lower sales volume of chronic hepatitis C products due to COVID-19, which led to fewer health care provider visits and screenings, the company explained.
With a total of 511 therapeutics in development for COVID-19, Gilead’s remdesivir remains at the forefront. In addition to holding emergency use authorization in the U.S., it was granted conditional marketing authorization by the European Commission last month. Clinical data showed a 62% reduction in the risk of mortality vs. standard of care. In its financials, it reported that it had donated and delivered 1.5 million doses of the drug by the end of June and had moved on to set the pricing for the drug, branded as Veklury, at $390 per vial for governments of developed countries and $520 per vial for U.S. private insurance companies and others. With expectations it will sell many more treatment courses in the U.S. and Europe in the months ahead, the company revised its full-year 2020 sales guidance, raising it to a range of $23 billion to $25 billion from a previous range of $21.8 billion to $22 billion.
In business development, the company reported it will invest $300 million to acquire a 49.9% equity interest in South San Francisco-based Tizona Therapeutics Inc., which is developing cancer immunotherapies. Gilead received an exclusive option to acquire the remainder of Tizona for up to an additional $1.25 billion, including an option exercise fee and potential future milestone payments. Gilead can exercise its option following readout of a phase Ib study of Tizona’s antibody, TTX-080, or earlier if Gilead wishes. TTX-080 targets HLA-G, an immune checkpoint expressed across multiple tumor types. The FDA cleared TTX-080’s IND, and Tizona plans to initiate a phase I trial evaluating TTX-080 as a monotherapy and in combination with other agents to treat advanced cancers.
Alexion Pharmaceuticals Inc.’s shares (NASDAQ:ALXN) also fell 9% in July. It reported total revenue of about $1.4 billion for the second quarter, a 20% increase over the same period in 2019. Top-selling product again was C5 complement inhibitor Soliris (eculizumab), with net sales of $975.5 million for the second quarter, down slightly from the $980.8 million in the same quarter in 2019. However, sales of Ultomiris (ravulizumab), its long-acting C5 complement inhibitor, jumped 363% year over year to $251.1 million, as patients switched to the more convenient option.
Shares of Thousand Oaks, Calif.-based Amgen Inc. saw its shares (NASDAQ:AMGN) push 4% higher in July. It revealed strong second-quarter financial results that Oppenheimer analyst Jay Olson called “impressive.” The firm’s adjusted earnings per share of $4.25 easily beat the $3.83 consensus estimates, thanks to $6.21 billion in total revenue, again surpassing the consensus of $6.16 billion. The firm’s “commercial and clinical execution reflect prudent navigation of COVID-19 challenges,” Olsen added.
Amgen’s total revenues increased 6% to $6.2 billion in comparison to the second quarter of 2019, driven by higher unit demand, offset partially by lower net selling prices.
Among the big pharmaceutical companies in the index, New York-based Pfizer Inc. enjoyed a significant 18% boost in its share (NYSE:PFE) value thanks to being in the forefront of COVID-19 vaccine development.
During July, it was announced that the U.S. government will pay $1.95 billion to Pfizer Inc. and Biontech SE for the first 100 million doses of their jointly developed COVID-19 vaccine once Pfizer manufactures it and receives the FDA’s approval or emergency use authorization. The two companies agreed, as part of Operation Warp Speed, to begin delivering 300 million doses of a COVID-19 vaccine in 2021. The agreement includes the government’s option to buy as many as 500 million additional doses. Americans will not be charged to receive the vaccine, according to the companies.