What Are Analysts Saying About Q1 At Biotech's Big 4? Amgen, Biogen, Celgene, Gilead

Biotech’s big four companies in terms of sales, profits and clout have all reported on their first-quarter earnings. During this tumultuous time for the industry, with drug pricing practices under scrutiny, how did the industry leaders perform on their main financial metrics?

Let’s take these in alphabetical order:

---Amgen. Total revenues increased 10% to $5.53 billion in the first quarter—about 5% better than Wall Street consensus revenue estimates. The company’s operating profit margin increased by 4.4 percentage points, to 54.6%. R&D spending was flat. Sales of six Amgen drugs--Enbrel, Neulasta, Aranesp, Xgeva, Prolia and Vectibix–exceeded Wall Street consensus estimates, according to Leerink Partners analyst Geoff Porges. Price increases were a big part of the story. “The main drivers of the revenue upside were Enbrel (price), which beat consensus by 13% and our recently raised estimate by 1%,” Porges wrote in a note to clients. “Neulasta and Aranesp also beat consensus by 6% and 11%, respectively.” He has a $186 a share price target on the company. Amgen stock fell 2% today, to $157.23 at 12:22 p.m. ET, following the first quarter financial report.

---Biogen. Total revenues increased 7% to $2.73 billion in the first quarter--about 1% below Wall Street consensus estimates of $2.76 billion. Sales of Biogen’s multiple sclerosis drugs--Tecfidera, Tysabri, and Avonex–all fell short of expectations. R&D expenses were much lower than analysts expected, coming in at about 16% of total revenue. Net profits came in at $971 million—an 18% increase over the same period a year ago. The company explained that expenses were down because it didn’t do any big in-licensing deals in the quarter, and to expect “choppy” expenses. “Though we expected sales to be down from 4Q15 due to seasonality, fewer selling days and inventory drawdown, many of the MS product sales fell short of both our and consensus estimates,” said Brian Skorney of Robert W. Baird. “The interferons continue to succumb to pressure from competitive therapies, especially orals.” Skorney has a $268 price target on Biogen. The stock declined 2.4% to $274 at 12:40 pm ET.

How is Biogen responding to its challenges? Advertising to create more demand for its MS pill. See Rebecca Robbins’ story in STAT for more.

---Celgene. The company reported total revenue of $2.51 billion in the first quarter—about 2.5% below Wall Street consensus estimates of $2.58 billion. Sales of cancer drugs Abraxane, Pomalyst, and Otezla all fell short of expectations. Profit for the quarter was $801 million, up 11% from a year ago. The company sought to assure analysts that better days are ahead, saying it expects total revenue for the full year to be on the high end of its previously disclosed range–in the neighborhood of $11 billion. Celgene reiterated that it expects to have an adjusted operating margin of 53.5% this year. Skorney, the analyst at Robert W. Baird, saw a silver lining, however. Despite missing Wall Street revenue expectations, Celgene’s net product sales were still up 21.4% from the same quarter a year ago. Skorney said Celgene’s prospects are “straightforward” and not heavily dependent on price increases, like its peers. “With net product sales up 21.4% YoY, Celgene appears fairly unique in large-cap biotech in 2016, with 19.2% of that growth coming from volume,” he wrote.

---Gilead Sciences. The giant maker of drugs for hepatitis C and HIV, facing intense pressure from payers over the pricing of its hepatitis C drugs, reported total revenues of $7.8 billion in the first quarter. This was a big disappointment, down about 8% from the fourth quarter of 2015, and up only 3% from the same period a year ago. “Most of the individual product results were weak, but the biggest surprise was the HCV results, which were down by 12% compared to Q4 and by 6% year-over-year, with most of the weakness coming from Harvoni,” wrote Geoff Porges, the analyst with Leerink. The company reported profits of $3.57 billion in the quarter, down from $4.33 billion a year earlier. Porges, who rates the company an “outperform,” lowered his price target from $127 to $123 a share. Gilead dropped 7.4% to $89.83 at 1 p.m. ET.