Big Pharma (L)Earnings Q2'23 | BMS, AbbVie, Sanofi, AstraZeneca, Merck, Pfizer, Vertex

Part Two of teasing out key learnings from Q2'23 BigCo earnings calls (July 27th to August 2nd) and what impact these may have on these companies, potential partners, and competitors

Below is round two of my Big Pharma (L)Earnings series. Check out round one here. This week is a long one with lots of BigCo calls, so it may be easier to read this one on the website vs. in your inbox. Hope you enjoy and share with others. Let’s get into it…

BMS | Reported: Thursday, July 27th

🤑 Multiple Myeloma not $Multiple Enough

BMS posted a miss on revenue and EPS vs. analyst expectations for the quarter, lowering 2023 revenue guidance. Lower iMiD sales seems to be the primary culprit here, but these were expected as genericized versions of REVLIMID come online. BMS has not done enough to develop new MM therapies to take the place of its declining iMiD franchise. With hopes over indexed on a less than stellar ABECMA profile. BMS’ BCMA CAR-T grew by 48%YoY, but declined 11% QoQ. The company cited pricing dynamics in Germany, planned manufacturing maintenance in June, and competition for the reasons for the declines. “Competition” is likely the biggest long-term headwind here, with JNJ/LEGN’s CARVYKTI already seeming to be the CAR-T of choice in MM and likely in earlier lines of therapy as well. 

While BMS continues to build manufacturing capacity, with a new US facility (in Massachusetts) coming online by YE’23 and another Netherlands site by 2025, plus in-house vector supply by 2024, JNJ/LEGN seem to have already made the necessary manufacturing supply chain adjustments with a superior product. If BMS is committed to staying in the game in Myeloma, they’ll need to win through bringing forth much more novel and competitive products. 

❓Can the New Product Portfolio Make Up for Upcoming Patent Cliffs?

This is the biggest question BMS has been facing. REVLIMID sales are on the decline after its LOE. ELIQUIS and OPDIVO, its two best selling products are projected to lose exclusivity in 2028. Other major brands like POMALYST, ORENCIA, SPRYCEL, and YERVOY are all also nearing loss of exclusivity. BMS is focused on growth of nine new brands representing its “New Product Portfolio” to make up for the expected revenue declines of its near-patent cliff products.

The company maintained guidance of $4B in revenue for 2023 (compared to $2B in 2022), focusing on several de-risked catalysts that they are confident will expand the total addressable markets of each of these new products. If we summarize what needs to go right for BMS to achieve this ambitious goal, to me it sounds like: 

• ZEPOSIA is a go-to treatment option in IBD

• SOTYKTU successfully expands into new indications (PsA, SLE, Sjogrens)

• ABECMA carves out enough of a niche to be a blockbuster product in MM,

• BREYANZI sustains its second-place status in CD19 CAR-T

• REBLOZYL works in MF

• OPDUALAG is able to replace a significant chunk of PD-1 mAb business outside of just melanoma

Of all of these events, the two I’m most skeptical of are ABECMA and OPDUALAG. The delta between ABECMA and CARVYKTI is massive. With new more novel entrants coming into the market, I could see ABECMA continued to get pushed down and used only when other CAR-Ts aren’t able to fulfill demand. BMS’ will need bring forth novel CAR-T offerings faster (perhaps utilizing the backbone of its GPRC5D CAR-T) if it wants to compete in this space. With OPDUALAG on the other hand, despite BMS noting that the product has reached 25% market share in melanoma, while replacing a significant chunk of 1L monotherapy PD-1 use, predicting the benefit of another LAG3 in other tumor types is a big gamble. I’m hopeful that add-on checkpoints like LAG3 and TIGIT add benefit on top of PD-1s, but the jury is still out, as PD-1s have set a high bar that has been proven difficult to beat in the past. I’m eager to see P2 data from Opdualag + chemo vs. OPDIVO + chem in 1L NSCLC, set to read out in Q4’23/Q1/24. Even if OPDUALAG shows benefit beyond Melanoma, Regeneron’s fianlimab seems poised to be a resilient threat in this space.