On the flip side, AstraZeneca, GSK and J&J stock prices contracted
The first half of the year has provided a good ride for Big Pharma and its investors with indices up in the U.S. and Europe. Even Japanese drugmakers avoided the side effects of China’s stock market meltdown and saw values rise 23%. But, of course, averages come from the highs and the lows and some players have actually seen share price declines during this bull market.
So who has seen the biggest run up so far this year, and who has been on the losing end? The data divers at EvaluatePharma have run the numbers and here is what they found. Among Big Pharma players, Eli Lilly ($LLY), Sanofi ($SNY), and Bristol-Myers Squibb ($BMY) saw the biggest gains, while AstraZeneca ($AZN), Johnson & Johnson ($JNJ) and GlaxoSmithKline ($GSK) all recorded price drops in H1. Among mid-tier players, Valeant Pharmaceuticals ($VRX) and Novo Nordisk ($NVO), performed even better.
Lilly enjoyed a 21% price rise in the first half of the year but as EvaluatePharma sees it, the company’s good fortune is unlikely to hold. That is because the run-up was in anticipation of results for its experimental Alzheimer’s treatment, solanezumab. While the drugmaker last month presented some long-term evidence to show that the amyloid-busting drug has a distinct impact on the disease among early-stage patients, investor enthusiasm seemed to wane on doubts around the drug which twice before failed to hit endpoints in studies. Since the Lilly presented the data, its share price has been static.
For Sanofi, it also was anticipation that played the biggest part in its 17% stock gain, as investors waited to hear what the FDA would do with its new generation PCSK9 high cholesterol fighter. The drug, developed with Regeneron ($REGN), got approval last month but its stock price is not much changed since H1 closed. Finally, BMS has been able to bask in the continuing success of its new immuno-oncology drug Opdivo, EvaluatePharma says. The drug won several new indications since being approved late last year. On top of that, BMS reported impressive sales from its hepatitis C drugs Daklinza(daclatasvir) and Sunvepra, which racked up $743 million in sales without yet being approved in the U.S.
But what happened to AstraZeneca, J&J and GSK –which saw price declines of 9%, 7% and 4% respectively– that they languished while so many of their peers have seen significant gains? For AstraZeneca and U.K. compatriot GSK, have had the wind taken out of the sales by continuing price pressure on their respiratory drug franchises, EvaluatePharma says. For AstraZeneca that is Symbicort and for GlaxoSmithKline that is Advair. It is the same kind of thing for J&J, although in a different treatment category. Its biggest seller, arthritis treatment Remicade, has seen unexpectedly strong competition from biosimilars in Europe.
There were some other, smaller, drugmakers that have seen even more extraordinary gains in price. Valeant Pharmaceutical, which has benefited from its aggressive M&A strategy saw a 55% gain in the first half of the year, while Novo Nordisk, which has been dedicated to organic growth, saw a 40% leap.
While going forward, the winners and losers may very well change, EvaluatePharma sees nothing really standing in the way of a continuation in the market escalation in pharma. “What could bring it to a halt? A safety worry, multiple failures in heralded areas like immuno-oncology, or fizzling sales in a red-hot sector like hepatitis C,” the analysts say. “None of these events can necessarily be predicted, so those calling the top remain in the minority.”
By Eric Palmer
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