April 5, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – Investors looking to beef up their healthcare portfolios may want to overlook Regeneron and ensure Amgen and Gilead Sciences are included in their portfolios, analyst Cory Renauer writes in the Motley Fool.
While Regeneron has been making waves with the approval of its anti-cholesterol Praluent, a PSCK9 inhibitor co-developed with Sanofi, and the clinical stage success of rheumatoid arthritis drug, Sarilumab and dupilumab, for atopic dermatitis and asthma, the company looks to be in a position to enjoy a revenue windfall. However, Renauer said conservative investors might want to take a second look at the company that currently relies on one drug for 79 percent of its revenue. Pointing at sales of Eylea, recently approved for the treatment of visual impairment due to myopic choroidal neovascularization in Europe, Renauer argued that it’s scary to rely on a single drug for revenue. Furthermore, he said the remaining bit of money the booming Tarrytown, N.Y.-based company is enjoying, stemmed from reimbursements from Sanofi over development of Praluent. Off-label use of a Roche drug over Eylea could severely cut into that revenue stream, Renauer said.
Gilead Sciences, on the other hand, is well secured due to its dominance in the hepatitis markets from sales of Harvoni and Sovaldi, which generated about $20 billion in 2015. While the company is not anticipating wild growth this year, Renauer argued that it will be a safe investment due to its impressive HCV drugs, as well as treatments in the HIV market.
Likewise, Renauer said Amgen’s diverse pipeline, which includes biosimilars and its own anti-cholesterol drug, Repatha, make it an important stock for investors to consider. Amgen has nine biosimilar molecules in its pipeline, with the potential to launch five of its biosimilars between 2017 and 2019. The most advanced is ABP 501, a biosimilar for Humira.
In Oct. 2015, Amgen announced positive Phase III results of ABP 501, a biosimilar to Humira (adalimumab) in patients with rheumatoid arthritis. In Phase III trials, Repatha lowered the bad cholesterol by about 60 percent and decreased the rate of cardiovascular events, including heart attack, heart failure leading to hospitalization and death, by approximately 50 percent. Pricepoint of the drug has been an issue for some prescribers, however, later this year a study on its effectiveness for cardiovascular disease will be released and if Repatha demonstrates a “statistically significant advantage in terms of reduced risk of death,” it will encourage a large number of physicians to prescribe the medication.
Another key for investors to note is its streamlining of costs to increase efficiency. Amgen has freed up capital from laying off about 20 percent of its workforce, part of an effort to slash $15 billion in expenses by 2018. The company has eliminated more than 4,000 global jobs from its payroll. The freed capital is expected to be used to drive additional clinical trials in an effort to get more drugs to market.
Gilead’s stock is up this morning, trading at $95.93 per share, while Amgen’s stock is slightly down this morning, trading at $153.29 per share. Shares of Regeneron are currently up this morning, selling at $407.61 per share.
