COVID-19 Cliff and Skyrocketing GLP-1 Drug Sales Highlight Q4 2023 Earnings
Pictured: Graph showing climbing numbers on a background of cash/iStock, Darren415
I’d be a liar if I said I looked forward to earnings season. It’s not that I don’t have a genuine interest in the financial results for the large publicly traded pharma and biotech companies. They are often bellwethers for important emerging trends in the industry, reflecting the current business environment and where things might be headed the rest of the year.
Still, to be honest, the quarterly results tend to be predictable, especially as of late. Of course, in any given quarter there’s the occasional surprise—both positive and negative—but it seems like companies are consistently beating Wall Street analysts’ earnings and revenue estimates, if only because companies have set low expectations for investors.
Case in point: Johnson & Johnson last month kicked off the fourth-quarter 2023 earnings season for the pharma sector with news that several products had outpaced projections. The standouts were immunosuppressive drug Stelara with $2.75 billion in sales, a 15.3% increase over Q3, cancer drug Darzalex with $2.55 billion, a 22.4% jump, and plaque psoriasis medicine Tremfya with $910 million, up 21%.
Bristol Myers Squibb also topped fourth-quarter 2023 expectations, with overall revenue ringing in at $11.48 billion, just above Wall Street’s projection of $11.19 billion and up 1% from the same quarter last year. Even AbbVie, whose overall sales last year declined as it faced biosimilar competition for its blockbuster Humira, announced greater-than-expected revenues in the fourth quarter.
Several companies facing the COVID-19 cliff also managed to best expectations. These included Pfizer, which is facing declining sales of its COVID-19 vaccine and therapy, and AstraZeneca, whose full-year earnings report showed a more than 90% drop for its COVID-19 medicines. Similarly, Gilead Sciences product sales in the fourth quarter decreased 4% to $7.1 billion due in part to lower sales of its COVID-19 antiviral Veklury, but overall revenue was still narrowly above expectations.
Breaking the mold this time was French drugmaker Sanofi. Despite strong sales of its blockbuster drug Dupixent, Sanofi’s fourth-quarter 2023 operating income dropped 5% due to a weaker U.S. dollar, high expenses and generic competition as its earnings lagged Wall Street’s expectations. Novartis had a similar fate, with overall net Q4 sales of $11.4 billion, falling short of the $11.56 billion analysts expected.
What is really getting boring quarter after quarter is watching Eli Lilly and Novo Nordisk cash in on the insatiable appetite for their respective diabetes and weight-loss drugs. I guess I better get used to it. Eli Lilly brought in more than $9.35 billion in revenue in the fourth quarter of 2023, beating Wall Street expectations of $8.93 billion, largely thanks to sales of its diabetes treatment Mounjaro and weight-loss drug Zepbound, while Novo Nordisk reported a 31% sales increase and a 2023 profit beat fueled by skyrocketing demand for Ozempic and Wegovy, the latter of which saw a jaw-dropping 147% growth.
After all this, I know what you’re thinking: “Greg, if you’re so good at predicting companies’ quarterly results, why aren’t you making a killing in the stock market?” First, because that would be wrong to own stocks and write about them. Second, because earnings beats don’t seem to impress investors, as evidenced by the muted stock price reactions for many of these companies. Apparently, it’s a ho-hum affair even for Wall Street.
Oh well, another earnings season has come and gone. Here’s to the first quarter of 2024 financial results! They’ll be here before we know it.