Shifting analyst views highlight industry’s bright sparks and damp squibs

Analysis

While analyst forecasts for individual product sales are something of a dark art, looking at how they change over time can illustrate how a drug’s performance has been boosted by a particular event as well as indicating how macro changes can affect the perception of how things will pan out in the future.

With the second-quarter financial results largely reported the sell side has been busy amending its assumptions, and EvaluatePharma data reveal a number of drugs that have benefited from recent upgrades or been hit by sharp downward revisions (see tables below). Taking a look back, some of these, such as Januvia, Benicar and Provenge, also feature in our analysis of industry products that exceeded or missed revenue expectations last year.

Among the winners is a trio of diabetes drugs. The biggest of these, Sanofi’s insulin glargine, Lantus, continues to benefit from fading fears over a biosimilar launch, and has seen analysts boost their 2012 sales forecasts by $742m over the past 12 months. Victoza, not far behind, is set to consolidate Novo Nordisk’s domination of the diabetes space, and Merck & Co’s DPP-IV inhibitor Januvia continues to benefit from growing sentiment.

Biggest upgrades in last 12 months
Rank Product Company Therapeutic subcategory 12 month change in WW forecast ($m) Annual sales WW - 2012 ($m)
1 Lantus Sanofi Anti-diabetics 742 5,970
2 Humira Abbott Laboratories Other anti-rheumatics 695 8,928
3 Januvia Merck & Co Anti-diabetics 618 4,077
4 Lucentis Novartis Eye preparations 587 2,360
5 Victoza Novo Nordisk Anti-diabetics 573 1,637

On the downside meanwhile, Dendreon’s Provenge slides, its 2012 consensus revenue forecasts slashed by $570m as reality sets in over how hard it has proved to make money out of the pricey autologous therapy. Daiichi Sankyo’s Benicar is downgraded sharply as generic versions of competing drugs buffet the angiotensin II inhibitor class.

Slight differences in patent expiry expectations are responsible for a downgrade for Nexium, while Novartis’s Tekturna has had $639m cut from its 2012 sales forecast in view of December’s news that it would no longer be sold in combination with commonly used hypertension medicines (Novartis' Tekturna looks troubled, December 21, 2011).

The surprising $512m forecast revenue reduction to Bayer’s Xarelto, meanwhile, is likely a sign of ever-shifting ground in expectations for the outcome of a three-way battle of the blood thinners. Among the beneficiaries from analyst upgrades, Humira apparently continues to outperform almost 10 years after launch, while Lucentis surprisingly fights its corner against Regeneron’s Eylea; given that the latter itself features further down the list of upgrades, this is probably a sign of growing expectations for the whole sector.

Biggest downgrades in last 12 months
Rank Product Company Therapeutic subcategory 12 month change in WW forecast ($m) Annual sales WW - 2012 ($m)
1 Benicar Daiichi Sankyo Angiotensin II antagonists (1,009) 2,413
2 Tekturna Novartis Other anti-hypertensives (639) 310
3 Provenge Dendreon Other cytostatics (570) 363
4 Nexium AstraZeneca Antacids & anti-ulcerants (530) 3,843
5 Xarelto Bayer Anti-coagulants (512) 269

Hits and misses

Turning to how good analysts were at forecasting product sales last year, Januvia also stars as one of the outperformers, along with Reckitt Benckiser’s opioid addiction drug Suboxone, which beat 2011 consensus forecasts by $621m as it managed to stave off the entry of generics for longer than had been expected.

The tables below summarise the most significant differences between last year’s reported product revenues and  consensus as at December 2011. The analysis is skewed heavily by fluctuations in the Swiss franc/US dollar exchange rate, so sales of Roche products have been excluded. Unsurprisingly, Benicar and Provenge also feature as drugs that missed consensus revenue forecasts for 2011.

Regarding the issue of timing generic entry, three CNS drugs – Lilly’s Zyprexa and Cymbalta and UCB’s Keppra – performed better last year in the run-up to the expiry of their US patents than had been expected.

GlaxoSmithKline’s Seretide/Advair, as well as facing up to more realistic threat of generics, missed consensus by $507m – still a relatively small amount versus its actual total sales of over $8bn – as a US label change for ICS/LABA combinations hit.

Epogen and Procrit suffered from US price caps and Brilinta built on its reputation as a perennial underperformer, with actual sales of $21m missing the December 2011 consensus by a whopping 93%.

Products that beat expectations in 2011 ($m)
Product Company Therapeutic subcategory Expected 2011 sales  Actual 2011 sales  Difference 
Januvia Merck & Co Anti-diabetics 2690 3324 634
Suboxone Reckitt Benckiser Other CNS drugs 601 1222 621
Prevnar 13 Pfizer Vaccines 3044 3657 613
Victoza Novo Nordisk Anti-diabetics 549 1119 570
Incivek Vertex Pharmaceuticals Anti-virals 420 951 531
Zyprexa Eli Lilly Anti-psychotics 4137 4622 485
Keppra UCB Anti-epileptics 774 1254 480
Cymbalta Eli Lilly Anti-depressants 3695 4162 467
Neulasta Amgen Immunostimulants 3494 3952 458
Humira Abbott Laboratories Other anti-rheumatics 7494 7932 438
Products that missed expectations in 2011 ($m)
Product Company Therapeutic subcategory Expected 2011 sales Actual 2011 sales  Difference 
Benicar Daiichi Sankyo Angiotensin II antagonists 3,317 2,602 (715)
Seretide/Advair GlaxoSmithKline Other bronchodilators 8,622 8,116 (507)
Epogen Amgen Anti-anaemics 2,345 2,040 (305)
Alimta Eli Lilly Anti-metabolites 2,739 2,461 (278)
Brilinta AstraZeneca Platelet aggregation inhibitors 299 21 (278)
Tracleer Actelion Other anti-hypertensives 1,972 1,721 (251)
Procrit Johnson & Johnson Anti-anaemics 1,848 1,623 (225)
Multaq Sanofi Cardiac therapy 573 363 (210)
Benlysta Human Genome Sciences Immunosuppressants 239 52 (187)
Provenge Dendreon Other cytostatics 396 214 (182)

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com

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