Franchise fortunes mark shifts in consensus for marketed products

Sofosbuvir is the gift that keeps on giving for Gilead Sciences. The performance of the hepatitis C franchise it has built around Sovaldi and Harvoni has had euphoric sell-side analysts giving it the biggest upgrade of any marketed product of the last 12 months.

Having a versatile active ingredient is no guarantee of praise, however, as Sanofi can attest. The downgrade for long-acting insulin Lantus is not nearly offset by upgrades for its brand extension Toujeo, a factor in the French group’s sliding outlook in the past year (see tables below).

Individual consensus forecasts for Sovaldi and Harvoni have undergone some shifts as analysts have begun to understand the market dynamics following the latter’s October launch, but the big picture is this: total 2018 sales for the two together are now forecast to be nearly $3bn more than they were just 12 months ago.

The launch of AbbVie’s competing regimen Viekira Pak and the price pressure that has emerged has done little to dampen spirits – Gilead has won a series of exclusive contracts after the shock of losing the very first one to AbbVie (Hep C price war evolves into value competition, January 20, 2015).

AbbVie may be wishing Viekira Pak were outperforming Gilead’s formidable dyad, but then again it has received happy news of its own. Cash engine Humira has experienced a $2bn upgrade, driven in part by Morgan Stanley’s bullish view of its ability to stretch the franchise beyond key 2016 patent expiries.

Merck & Co’s Keytruda had been thought to be the second programmed death-1 (PD-1) oncology agent to reach the market, until it surprised last year with an early regulatory submission. That action was accompanied by impressive analyst upgrades that it earned by beating Bristol-Myers Squibb’s Opdivo to market by more than three months.

Clinical data drove Astellas’ and Medivation’s Xtandi to greater heights, allowing it to move into the pre-chemotherapy population in prostate cancer patients and strengthening an already-impressive launch. Diabetes pill Invokana surprised sceptics and exceeded expectations in its launch trajectory, prompting analysts to add $1bn to their 2018 forecasts.

Sliding sales outlook, clinical disappointment

For being the world’s third biggest-selling drug, long-acting insulin Lantus remains a controversial topic among analysts. Sanofi has managed to stretch out its market exclusivity long enough that it should be able to launch follow-up Toujeo – which itself has seen upgrades, but not enough to make up for Lantus' downgrades (Shifts in consensus leave Novartis's pipeline both a winner and a loser, January 27, 2015). Yet clever US marketing by competitor Novo Nordisk last year meant Sanofi struggled to sustain growth and the 2018 forecasts have fallen off by $2bn.

Clinical setbacks defined Roche’s 2014, and Kadcyla’s failure in the Marianne trial to show any benefit when added to Perjeta in first-line metastatic breast cancer versus Herceptin and chemotherapy was perhaps the biggest and most surprising. Analysts from Morgan Stanley estimated this setting was worth $1.6bn alone – EvaluatePharma’s decline of just $1.1bn should get steeper as more analysts incorporate the late December announcement into their models.

Breast cancer disappointment also defined Novartis’ Afinitor, which fell short in the metastatic setting tested in the Bolero-2 trial. This caused Novartis to trim its peak sales expectations in this indication from $2bn to $1.5-$1.7bn, which is reflected in the shrinking 2018 forecast.

GlaxoSmithKline’s struggles in justifying prices of its respiratory products has been well-documented and reflected in the declining forecasts seen for both mainstay Advair and new entrant Breo Ellipta, with nearly $2bn having been removed from forecasts for the two in the last 12 months.

Creating a franchise is something many big and small companies aspire to do in pharma, and success is rewarded by analysts with big sales forecasts. But as Sanofi and Glaxo have shown in the past year, the bigger they are, the harder they fall.

To contact the writers of this story email Jonathan Gardner or Amy Brown in London at [email protected] or follow @JonEPVantage or @AmyEPVantage on Twitter