Shifts in sales forecasts leave Sovaldi on top and Januvia lagging

No prizes for guessing which drug has received the most substantial uplift in sales forecasts over the past 12 months. The seemingly unstoppable force that is Sovaldi has seen a huge $6bn added to consensus for 2018, as equity analysts have returned again and again to their spreadsheets to reflect huge demand – and high price – of the hepatitis C therapy.

Other big beneficiaries of improving outlooks, the anti PD-1 antibodies, are equally predictable, although the fact that Lantus makes the top five is perhaps more surprising. On the downside the ongoing struggles of Januvia and the disappointing launches of Xeljanz and Eliquis have seen sales projections for these products tumble sharply – by $3bn over the past year for Merck’s diabetes pill (see tables below).

Biggest consensus upgrades over the past 12  months 
WW sales ($bn) Change over 12 months ($bn)
Product Company Status 2018e 2018e
Sovaldi + ledipasvir combo Gilead Sciences Marketed/filed 13.22 6.04
Nivolumab Bristol-Myers Squibb Phase III 3.92 2.72
MK-3475 Merck & Co Filed 2.79 2.68
Lantus Sanofi Marketed 10.15 1.97
Kadcyla Roche Marketed 3.64 1.96

Forecasts for Sovaldi and the combination pill that is awaiting approval have been climbing gradually; a huge $2.4bn of first-quarter sales prompted another big hike to numbers. Whether the franchise can meet these expectations is the biggest question for Gilead Sciences and its investors over the coming months.

Growing excitement around the checkpoint inhibitors and their potential in oncology sees two of these make the top five. However, while nivolumab forecasts have been creeping up gradually over the past year, consensus around MK-3475 has more than doubled in the last couple of months.

Merck announced in January that it had filed its contender in the anti PD-1 antibody race for approval under a rolling submission – making it the first drug of this class to reach regulators and taking the market by surprise – and forcing a big re-evaluation of the asset (Merck catches Bristol with surprise PD-1 filing, January 14, 2014).

The resilience of the Lantus franchise is remarkable considering that its main US patent expires in February 2015. That looks likely to hold until mid-2016 now that Sanofi has forced a stay of approval by suing Lilly, which had filed for approval of its biosimilar version of the drug (Lilly needs diabetes foundation to remain firm, January 31, 2014).

This factor and the huge pricing power that the French drugmaker enjoys for the product – it raised the US list price three times in 2013, analysts believe – has prompted 2018 sales forecasts for the long-acting insulin to grow by almost $2bn over the past 12 months.

Finally, Roche won approval for its antibody-drug conjugate Kadcyla in February 2013. This prompted big upgrades – helped by a higher-than-expected price – and the launch has gone on to beat many analysts’ expectations.

Biggest consensus downgrades over the past 12 months
WW sales ($bn) Change over 12 months ($bn)
Product Company Status 2018e 2018e
Januvia + Janumet Merck & Co Marketed 6.74 (2.98)
Seretide/Advair GlaxoSmithKline Marketed 4.32 (1.70)
Xeljanz Pfizer Marketed 1.31 (1.27)
Eliquis Bristol-Myers Squibb Marketed 2.70 (1.01)
Human insulin & devices Novo Nordisk Marketed 1.74 (0.82)

Merck might be proud owner of one of the most upgraded drugs of the past year, but unfortunately it also sells the most downgraded one. Its diabetes pill Januvia and the metformin combo Janumet have been struggling to maintain momentum, and consensus sales forecasts have been creeping down for some time.

The hugely successful franchise comprises the first DPP-IV to reach the market, back in 2006, but has more recently struggled to fend off competition from the growing GLP-1 agonist class – and an ambitious Novo Nordisk with Victoza – and the newly launched SGLT2 inhibitors.

Glaxo’s Advair lost some of its Teflon coating when the FDA appeared last year to open the road to approval of generics after patent expiries in 2016. This, plus competition from newer combination respiratory drugs, has prompted sales forecasts to come down, although it is clear that this product has the potential to remain a big force in the market.

Pfizer’s Xeljanz has had a disappointing launch; analysts pinned huge expectations to the novel rheumatoid arthritis pill but safety concerns prompted a less enthusiastic welcome by the market. The drug’s failure to win approval in Europe, where regulators remain unconvinced about risk versus benefit, also put a big dent in forecasts (Xeljanz train derails in Europe, April 26, 2013).

Likewise with Eliquis, huge expectations followed by a lacklustre launch prompted a gradual erosion of the perceived sales potential of the oral blood thinner. However signs are that analysts believe the huge marketing push that Bristol-Myers and partner Pfizer are putting behind the product will pay off. After touching a low of $2.4bn last November, consensus for 2018 now sits at $2.7bn.

Interestingly, Novo’s human insulin franchise has seen a relatively large downgrade over the past 12 months, without any key trigger. With increasing uptake of modern insulins and competition from other players this has long been an area of shrinking relevance to the company, and sales missed expectations over a couple of quarters in 2013.

Another product excluded from this analysis, Viagra, also saw a big downgrade last year – 2018 consensus plunged by $1bn after Pfizer settled with the Teva, allowing a US generic launch in 2016.

It is also interesting to note that all five products in the downgrade list are marketed, compared with only three in the upgrade list. This shows how the bullish outlooks for R&D assets generated by frothy sellside analysts are frequently disabused by the market.

All data sourced to EvaluatePharma.

To contact the writer of this story email Amy Brown in London at AmyB@epvantage.com or follow @AmyEPVantage on Twitter

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