Proactive Investors - US biopharma companies may see more subdued first-quarter earnings due to the typical seasonality across the sector and new healthcare plan signups, according to analysts at the Bank of America (NYSE:BAC),
“A stable earnings season should warrant continued generalist interest in biopharma,” the analysts wrote in a note.
They are bullish on Merck & Co Inc (NYSE:MRK, ETR:6MK) and Vertex Pharmaceuticals Inc (NASDAQ:VRTX, ETR:VX1) on their view the companies are up against beatable growth expectations.
However, they are more cautious on Bristol-Myers Squibb (NYSE:BMY) Co (NYSE:BMY, ETR:RM, OTC:BMYMP) given a typically tough Q1, with portfolio launch likely to inflect in the second half of the year or 2025.
Pharmaceutical highlights
- Abbvie Inc (NYSE:ABBV): Due to seasonally lower sales and higher operating expenses from a deal closure, their forecasts are slightly below the Wall Street consensus. They forecast $11.9 billion in sales and earnings per share of $2.20, $56 million and $0.09 below the consensus, respectively. Prescription data suggests weaker US sales of rheumatoid arthritis drug Humira and severe plaque psoriasis drug Skyrizi.
- Bristol-Myers Squibb Co (NYSE:BMY, ETR:RM, OTC:BMYMP): The analysts are also below the consensus EPS estimate for Bristol-Meyers Squibb, noting that it did not likely account for all acquisition-related in-process research and development costs. They forecast a loss per share of $3.51 on revenue of $11.4 billion, compared to Street estimates of a $3.25 loss per share and $11.5 billion in revenue.
- Eli Lilly and Co (NYSE:NYSE:LLY): Revenue is pegged at $9.3 billion and EPS at $2.62, above the Street by $280 million and $0.06.
- Merck & Co Inc (NYSE:MRK, ETR:6MK): Strong demand for Sotatercept, a medication for pulmonary arterial hypertension, could see Merck raise its guidance, the analysts believe. Q1 revenue is seen at $15.3 billion versus the consensus $15.2 billion while EPS is forecast at $2.05, above the consensus $1.99.
- Johnson & Johnson (NYSE:JNJ): The analysts forecast revenue in line with the Street at $21.4 billion while EPS is seen slightly higher at $2.74, compared to $2.65.
- Pfizer Inc (NYSE:NYSE:PFE, ETR:PFE): Better-than-expected prescription volume has the analysts forecasting revenue $401 million above the consensus at $14.4 billion. However, higher operating expenses have them expecting EPS of $0.49, $0.05 below the consensus.
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Biopharma highlights
- Amgen Inc (NASDAQ:AMGN, ETR:AMG): Competitive pressure for both core and new launches has the analysts slightly below the consensus for both revenue and EPS at $7.41 billion versus $7.43 billion and $4 versus $4.06.
- Biogen Inc (NASDAQ:BIIB, ETR:IDP): Expected steeper erosion of Biogen’s core product portfolio has the analysts $79 million below the consensus at $2.2 billion for revenue and $0.06 below for EPS at $3.39. They lowered their forecasts and price objective on the stock from $280 to $260 based on the slower-than-expected launch of Alzheimer's Disease therapy Leqembi. They have a ‘Neutral’ rating on the stock.
- BioMarin Pharmaceutical: The analysts expect revenue $12 million higher than Street at $664 and EPS $0.09 higher at $0.73 as the supply of achondroplasia therapy Voxzogo appears to remain constrained until the middle of the year.
- Gilead Sciences Inc (NASDAQ:GILD, ETR:GIS): Management has guided muted results due to seasonal weakness, with the analysts as a result not expecting a standout quarter forecasting $6 billion in sales, $376 million below consensus and a loss per share of $1.17. But they remain bullish on 2024 forecasting $27.8 billion in revenue, up $516 from the consensus and $4.65 in EPS.
- Moderna Inc (NASDAQ:MRNA, ETR:0QF): They forecast EPS in line with the consensus of a loss per share of $3.26 but lower revenues of $57 million, compared to the Street’s $96 million.
- Regeneron Pharmaceuticals Inc (NASDAQ:REGN): Noting that they remain skeptical of the outlook for the Eylea franchise for eye disease, the analysts reiterated their ‘Underperform’ rating on Regeneron but increased their price target from $710 to $720 due to the company’s net cash position. For Q1, they are below the Street, forecasting revenue of $3.2 billion and EPS of $9.95, $60 million and $0.11 lower respectively.
- Royalty Pharma: The analysts are in line with the consensus forecasting Q1 revenue of $693 million and EPS of $1.01. They repeated their ‘Buy’ rating on the stock but lowered their price target from $40 to $38 due to changes in net cash.
- Vertex Pharmaceuticals: Expectations cystic fibrosis medicine Trikafta will continue to outperform have the analysts higher than the Street for both quarterly revenue and EPS in Q1, forecasting $2.6 billion and $4.24, ahead by $13 million and $0.17 respectively.
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