Biopharma’s Q3 Earnings Season Sees Mixed Results as Challenges Remain

Pictured: Financial graph overlaid on stacks of coins/iStock, Sakorn Sukkasemsakorn

Pictured: Financial graph overlaid on stacks of coins/iStock, Sakorn Sukkasemsakorn

The third quarter of 2023 has been a mix of positive news and stumbling blocks for some of the biggest names in biopharma. With layoffs continuing at a brisk pace for biotechs, both big and small, some companies have been seeing a successful quarter while some have taken a hit from a post-COVID slump. 

BioSpace reviewed third-quarter earnings results and examined some of the challenges and successes that the biggest names in biopharma had over the last quarter.

COVID Cliff Continues

It is no surprise that the demand for the COVID-19 vaccine is now in a sharp decline, as Pfizer revealed that 24% of the population in the U.S. is expected to receive a shot in 2023. Pfizer reported its first loss since 2019, recording around $13.2 billion in sales and a 42% drop. The contributing factors included a 97% drop in sales of the antiviral Paxlovid and a 70% decline in revenue from the Comirnaty vaccine. 

Meanwhile, two other prominent names have fallen off the COVID cliff. Roche saw a sharp decline in its COVID-19 products, mainly testing products, leading to an 18% decline in “overall divisional sales.” The Swiss pharma is looking to trim its pipeline as well. 

However, the situation with Moderna, one of the prominent companies in the COVID-19 vaccination space, is more significant. Moderna posted $1.8 billion in sales, down from $3.4 billion a year ago. The company encountered a “lower sales volume” and charges of $1.3 billion for “inventory write-downs” related to what has been described as “excess and obsolete” COVID-19 products.

At the same time, potential solutions are already in the works to move past COVID. Pfizer is confident that its other vaccines for RSV and pneumococcal conjugates are already positive sales generators, but is still having to resort to cost-cutting measures including layoffs.

Moderna hopes to see a boost when more of its manufacturing apparatus comes online and with the potential launch of its own RSV vaccine. At the same time, Roche saw over $5.3 billion in sales from Ocrevus this year, as well as positive sales from the hemophilia A treatment Hemlibra, antibody Perjeta and the cancer drug Tencentriq. 

Other Stumbling Blocks 

While COVID was undoubtedly the cause of some companies’ woes during the third quarter, other factors abound that caused headwinds for some major players. 

Amgen saw profits drop 19% due to a $650 million write-down from the elimination of a prostate cancer drug it acquired as part of the acquisition of Teneobio in 2021. Overall, Amgen saw income fall from $2.7 billion to around $2 billion. 

A note to investors from Mizuho analyst Salim Syed reported that Amgen going forward will focus on its development of a treatment for obesity and that Phase II data for its AMG-133 candidate, a glucose-dependent insulinotropic polypeptide receptor antagonist, and glucagon-like peptide-1 receptor will have a data readout in the first half of 2024. 

With the acquisition of Horizon Therapeutics, which faced now-resolved hurdles with the FTC, Syed noted that Tepezza is expected to grow in the U.S. due to a label update in April and a boost in new prescribers. However, Syed’s report notes that Amgen does have some risks, most notably that the pharma “is unable to come up with new growth areas/products from the pipeline” and that Lumkaras and Otezla face competition. 

But Amgen is not alone in facing headwinds in the third quarter. Takeda, after its stem cell therapy Alofisel to treat Crohn’s disease failed to meet a Phase III primary endpoint, dropped its net profit projection for fiscal 2023 by 71%. Takeda also took a write-down of $770 million and cited losses due to exchange rate, tax assumptions and other “developmental setbacks.”

Bristol Myers Squibb marked its fifth decline in quarterly revenues in the third quarter, decreasing 4% to $7.6 billion, with its multiple myeloma drug Revlimid only bringing in $1.43 billion in sales, a 41% decrease from last year.

Regeneron noted a sales decrease in its primary wet age-related macular degeneration drug, Eylea, as it is facing stiff competition from Roche’s Vabysmo. But the company did see an increase in sales from Dupixent and Libtayo, which helped its bottom line in the quarter. 

Q3 Successes 

It was not all doom and gloom for companies in the third quarter, as other prominent names did see growth. 

Merck continued to see positive sales numbers from the cancer treatment Keytruda, bringing in $6.3 billion in the quarter, a 17% bump from the same period last year. So far, the drug has brought in $18.4 billion in 2023. An analyst report from Mizuho’s Mara Goldstein made the case that Keytruda continues to act as “a positive growth driver” as it advances into earlier lines of treatment and that Merck’s plans to push the drug into earlier stages of treatment are ahead of schedule. 

“We see a substantial increase in visibility and evidence of forward progress in the late-stage pipeline, which is now diversified beyond oncology (largely through business development). We see the potential for additional strategic acquisitions and licensing deals to continue. We note several new Phase III trials that could eventually add to the revenue mix,” Goldstein wrote in her note. 

In the third quarter, Novo Nordisk and Eli Lilly saw very favorable upward trends thanks to their respective GLP-1 arsenals. For Novo, the weight-loss drug Wegovy brought in $1.7 billion for the quarter and $3.1 billion in revenue for the first nine months of 2023, or growth of 490%. Novo’s Ozempic, its other semaglutide drug, brought in $9.4 billion in the quarter, or 59% growth in sales from the same quarter in 2022. 

For Eli Lilly, Mounjaro exceeded analyst predictions and brought in $1.4 billion in the third quarter but saw a 10% drop in Trulicity sales. And while Lilly overall saw $9.5 billion in revenue—a 37% increase from last year—it still cut its sales outlook for 2023. 

GSK meanwhile touted 10% growth on the back of sales of its vaccines. The company’s RSV vaccine Arexvy brought in $859 million in the quarter and $1 billion from the shingles vaccine Shingrix. 

Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.

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