The sellside falls out of love with Opdivo

An analysis of the sellside’s consensus forecast changes reveals the winners and losers of 2019.

Analysis

It is sometimes said that it is not enough to succeed unless others fail. If this is the case then Keytruda, whose performance prompted yet more analyst upgrades last year, scored a major victory over its rival Opdivo, which saw the biggest sign to date of it being abandoned by the sellside.

The figures are revealed in Vantage’s annual analysis of banks’ upgrades and downgrades, derived from EvaluatePharma’s sellside-based 2020 consensus forecasts, ranked to find the biggest moves over the course of 2019. This also shows big adjustments for diabetes drugs and a changing of the guard in HIV treatment, a sometimes overlooked but still huge growth area for Gilead Sciences.

Thus Gilead’s once-daily triplet, Biktarvy, gained over $2bn in sellside consensus for 2020 revenues, partly at the expense of the group’s own quad, Genvoya. Interestingly, Glaxosmithkline’s triplet, Triumeq, also made it into the top downgrades, perhaps as analysts viewed that company’s future as lying increasingly in once-monthly doublets.

2019's biggest sellside upgrades
Product Company Current 2020 sales estimate ($bn) Chg vs 2018
Keytruda Merck & Co 14.4 2.6
Biktarvy Gilead 6.3 2.2
Ozempic Novo Nordisk 2.8 1.1
Latuda Sumitomo Dainippon Pharma 1.8 1.0
Rituxan Roche 5.3 1.0
Source: EvaluatePharma sellside consensus forecasts.

Meanwhile, Keytruda’s ability to yield positive surprises is well known, and in 2019 the drug added $2.6bn to its 2020 sales forecast, a year after seeing its 2019 consensus estimate climb by $2.1bn.

But the most striking example of shifting sales outlooks can be seen with Opdivo, which after having its 2019 forecast upgraded by $1.2bn saw 2020 consensus sales shrink by $845m. This made the Bristol-Myers Squibb drug pharma’s most harshly punished product of last year.

If it was lung cancer that gave Keytruda dominance then renal cancer represented a rare bright spot for Opdivo – until last year, that is. With the Keynote-426 readout Keytruda plus Inlyta looks to have neutralised Opdivo plus Yervoy, prompting soul-searching among analysts.

Away from immuno-oncology, sellside anticipation of Ozempic’s cardiovascular risk-reduction indication, which came this month, likely lies behind the Novo Nordisk once-weekly diabetes drug’s third place in the 2019 upgrades; Jardiance was in ninth place, with a $768m 2020 upgrade.

Also just outside the top five, Pfizer’s amyloidosis drug Vyndaqel blew expectations out of the water in its first full quarter on the market, earning a $980m 2020 upgrade.

2019's biggest sellside downgrades
Product Company Current 2020 sales estimate ($bn) Chg vs 2018
Opdivo Bristol-Myers Squibb 7.9 -0.8
Xarelto Johnson & Johnson/Bayer 6.7 -0.7
Neulasta Amgen 2.6 -0.7
Genvoya Gilead 3.6 -0.6
Triumeq Glaxosmithkline 3.0 -0.5
Source: EvaluatePharma sellside consensus forecasts.

On the down side, Johnson & Johnson/Bayer’s anticoagulant Xarelto failed in a key expansion study in 2018; the companies’ protestations notwithstanding, the sellside started marking it down last year. The situation might not have been helped by publicity over lawsuit settlements concerning the drug’s bleeding risks.

And copycats accounted for many of the other major forecast changes, including Rituxan, which was helped by a settlement with Pfizer to allay the threat of biosimilars. Neulasta, meanwhile, was downgraded as ex-US biosimilars started taking their toll, seeing post-2018 sales plummet; not only that, three US versions of the neutropenia drug are now approved.

With the US presidential election year now upon us, the sellside will pay close attention to these and other themes as it firms up forecasts for 2021.

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