Week's news analysis

2020 financial results at a glance

by the Editor - 12 February 2021

How did major companies manage their businesses in 2020, amid Covid-19 pandemic, economic lockdowns and above all, "ups and downs" in R&D to bring to the market vaccines candidates against the virus?
PHARMAnetwork reviews the Top 5 pharmaceutical companies' 2020 financial results and 2021 forecasts.

Johnson & Johnson enhanced its position as "the largest broad-based healthcare company" with full-year sales of $82.6 billion, up 0.6%. By segments, Consumer Health worldwide sales, excluding the net impact of acquisitions and divestitures, grew 1.1% to $14 billion. Several over-the-counter products drove the growth in the US, including Tylenol analgesics, Pepcid and Zyrtec, Listerine mouthwash in oral care products; OGX in skin health/beauty products.

Pharmaceutical worldwide sales grew 8.4% to 45.5 billion driven by Stelara (ustekinumab), a biologic for the treatment of a number of immune-mediated inflammatory diseases, Darzalex (daratumumab), for the treatment of multiple myeloma or Imbruvica (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, a type of blood or lymph node cancer. The growth was partially offset by the negative impact of Covid-19 as well as biosimilar and generic competition, with declines in Remicade (infliximab), a biologic approved for the treatment of a number of immune-mediated inflammatory diseases or Velcade (bortezomib), a proteasome inhibitor for the treatment of multiple myeloma. Medical Devices worldwide sales declined by 11.6 % to $22.9 billion. The decline was primarily driven by the negative impact of the Covid-19 pandemic and the associated deferral of medical procedures to Surgery, Orthopaedics and Vision businesses.

Swiss company Roche announced full-year revenue down 5 % to $64.6 billion, with full-year profit up 7 % to $16.7 billion. Pharmaceuticals Division sales declined 8% to $49.3 billion, despite growth of newly launched medicines (Tecentriq, Hemlibra, Ocrevus, Perjeta and Kadcyla). These products generated sales of $20.66 billion and offset the impact of competition from biosimilars, but not the additional Covid-19-related impact from missed medical appointments. Among new products, Ocrevus sales, first approved in 2017, grew 24 % to $4.82 billion; Tecentriq posted $3 billion sales up 55 %, while Hemlibra sales increased 68% to $2.48 billion.

Diagnostics Division sales grew 14% for the full year to $15,48 billion (+14 %). The growth was primarily due to Roche's world-leading portfolio of new Covid-19 tests. In 2020, Roche developed 15 solutions for SARS-CoV-2 diagnosis, including both molecular and immunodiagnostic tests for clinical laboratory and point of care. The company also entered into a number of new partnerships, including with Gilead, Regeneron and Atea, to develop, manufacture and/or distribute molecules that potentially can both treat and prevent Covid-19. In the pharmaceutical division, Roche moved nine new molecules to late-stage development, compared to three per year over the last four years. At the end of 2020, Roche had 19 new molecular entities (NMEs) in late-stage development - more than ever before. Moreover, Roche launched four new medicines in 2020.

"Despite the continued strong impact of biosimilars," Roche sales are expected to grow in 2021 in the low-to mid-single digit range, at constant exchange rates, with core earnings per share increasing "broadly in line" with this. The company suggested that biosimilar competition this year to Avastin, Herceptin and MabThera/Rituxan in the US, Europe and Japan will erode sales by around $5.1 billion, down from $5.6 billion in 2020.

Moving into 2021, Novartis CEO Vas Narashimhan expects sales to grow in the low- to mid-single digits, on the condition that the pandemic eases up in the second half of the year. The company said its guidance assumes "a return to normal global healthcare systems including prescription dynamics by mid-2021." It added that the outlook also does not take into account any generic versions of Gilenya or Sandostatin LAR that may enter the US market this year. In 2020, the company delivered a "solid performance" its strategic priorities, despite the challenges of Covid-19. According to Vas Narashimhan, "Novartis advanced its next wave of medicines achieving a number of new approvals highlighted by Kesimpta in the US, Leqvio and Zolgensma in the EU and progressed its mid-stage pipeline."

Full-year sales grew 3 % to $48.7 billion while full-year profit went down 31 % to $8.1 billion. Pharmaceuticals business unit grew 5% driven by Entresto (+44%, $2.49 billion), Zolgensma (reaching USD 0.9 billion, +155 %), Cosentyx (+13% $3.99 billion), Ilaris (+31%, $0.873 billion) and the Xiidra acquisition (+95%). Oncology business unit grew 3% driven by Promacta/Revolade ($1.7 billion, +23% ), Jakavi ($1.33 billion, +20% ), Kisqali (+45% ), Tafinlar + Mekinist ($1.5 billion, +16% ) and Piqray (reaching $0.3 billion).

Merck & Co achieved growth with full-year 2020 worldwide sales up 2 % to $48 billion, despite a disappointing Q4. The estimated overall negative impact of the Covid-19 pandemic to Merck's revenue for the full year 2020 was approximately $2.5 billion, mainly attributable to the human health business but including approximately $50 million attributable to animal health. Among its main products, Keytruda worldwide sales grew 30% to $14.4 billion, whereas neuromuscular agent Bridion'sales grew 6 % to $1.2 billion. "Our scientists continue to advance our internal pipeline of promising medicines and vaccines, including in oncology, HIV, and pneumococcal disease, and, more recently, therapeutics for COVID-19", said Kenneth C. Frazier, chairman and chief executive officer, who is due to retire at the end of June.

On the front against Covid-19 pandemic, Merck has scrapped its development efforts, deciding instead to focus on advancing the therapeutic candidates MK-4482, also known as molnupiravir, and MK-7110. The company said "we have scaled production and expect to have over 10 million courses [of MK-4482] available by the end of 2021, if approved". It also declared that it expects to be able to supply the US government with roughly 60,000 to 100,000 doses of MK-7110 by mid-2021.

Pfizer announced that full-year revenues totaled $41.9 billion, an increase of $736 million, or 2%. Growth was mainly driven by Vyndaqel/Vyndamax and Eliquis globally; oncology biosimilars, including the recent launches of Ruxience, Zirabev and Trazimera; Ibrance in the U.S. and emerging markets; sterile injectables products in the US; pneumoccocal vaccine Prevenar 13 outside the U.S.; cancer therapy Inlyta and anti-inflammatory agent Xeljanz globally; and cancer therapy Xtandi in the US.

Being the first company to bring to the market a vaccine against Covid-19 with partner BioNTech, it expects to sell about $15 billion in coronavirus vaccine doses in 2021 and to net a profit in the high 20% range of revenue for the inoculations. It plans to deliver 200 million doses of its coronavirus vaccine to the US by May, earlier than its initial forecast of July. It can potentially deliver 2 billion doses globally by the end of this year now that health-care providers can extract an additional sixth dose of the vaccine from the vials. Pfizer sounds increasingly confident that the annual sales opportunity from Covid-19 could be similar to that for influenza vaccines, resulting from a need to potentially tailor vaccines on a regular basis to combat emerging variants of the SARS-CoV-2 virus. On a global scale, the company forecasts global revenue this year will be between $59.4 billion and $61.4 billion.

The company anticipates full-year 2021 worldwide sales to be between $51.8 billion and $53.8 billion. It also assumes an unfavorable impact to revenue of approximately 2% due to the Covid-19 pandemic, all of which relates to pharmaceutical segment sales. Still in 2021, Merck expects the spinoff of Organon to be completed late in the second quarter. For the full year, Organon is expected to generate $6.0 billion to $6.5 billion in revenue. For Merck, the spinoff of Organon will allow it to increase focus on key growth pillars, result in higher revenue and EPS growth rates and enable incremental operating efficiencies of approximately $1.5 billion which are expected to be achieved over three years.

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