US biopharma companies may see more subdued first-quarter earnings due to the typical seasonality across the sector and new healthcare plan signups, according to analysts at the Bank of America,
“A stable earnings season should warrant continued generalist interest in biopharma,” the analysts wrote in a note.
They are bullish on Merck & Co Inc (NYSE:MRK, ETR:6MK) and Vertex Pharmaceuticals Inc (NASDAQ:VRTX, ETR:VX1) on their view the companies are up against beatable growth expectations.
However, they are more cautious on Bristol-Myers Squibb Co (NYSE:BMY, ETR:RM, OTC:BMYMP) given a typically tough Q1, with portfolio launch likely to inflect in the second half of the year or 2025.
Pharmaceutical highlights
- Abbvie Inc (NYSE:ABBV): Due to seasonally lower sales and higher operating expenses from a deal closure, their forecasts are slightly below the Wall Street consensus. They forecast $11.9 billion in sales and earnings per share of $2.20, $56 million and $0.09 below the consensus, respectively. Prescription data suggests weaker US sales of rheumatoid arthritis drug Humira and severe plaque psoriasis drug Skyrizi.
- Bristol-Myers Squibb Co (NYSE:BMY, ETR:RM, OTC:BMYMP): The analysts are also below the consensus EPS estimate for Bristol-Meyers Squibb, noting that it did not likely account for all acquisition-related in-process research and development costs. They forecast a loss per share of $3.51 on revenue of $11.4 billion, compared to Street estimates of a $3.25 loss per share and $11.5 billion in revenue.
- Eli Lilly and Co (NYSE:LLY): Revenue is pegged at $9.3 billion and EPS at $2.62, above the Street by $280 million and $0.06.
- Merck & Co Inc (NYSE:MRK, ETR:6MK): Strong demand for Sotatercept, a medication for pulmonary arterial hypertension, could see Merck raise its guidance, the analysts believe. Q1 revenue is seen at $15.3 billion versus the consensus $15.2 billion while EPS is forecast at $2.05, above the consensus $1.99.
- Johnson & Johnson (NYSE:JNJ): The analysts forecast revenue in line with the Street at $21.4 billion while EPS is seen slightly higher at $2.74, compared to $2.65.
- Pfizer Inc (NYSE:PFE, ETR:PFE): Better-than-expected prescription volume has the analysts forecasting revenue $401 million above the consensus at $14.4 billion. However, higher operating expenses have them expecting EPS of $0.49, $0.05 below the consensus.
Biopharma highlights
- Amgen Inc (NASDAQ:AMGN, ETR:AMG): Competitive pressure for both core and new launches has the analysts slightly below the consensus for both revenue and EPS at $7.41 billion versus $7.43 billion and $4 versus $4.06.
- Biogen Inc (NASDAQ:BIIB, ETR:IDP): Expected steeper erosion of Biogen’s core product portfolio has the analysts $79 million below the consensus at $2.2 billion for revenue and $0.06 below for EPS at $3.39. They lowered their forecasts and price objective on the stock from $280 to $260 based on the slower-than-expected launch of Alzheimer's Disease therapy Leqembi. They have a ‘Neutral’ rating on the stock.
- BioMarin Pharmaceutical: The analysts expect revenue $12 million higher than Street at $664 and EPS $0.09 higher at $0.73 as the supply of achondroplasia therapy Voxzogo appears to remain constrained until the middle of the year.
- Gilead Sciences Inc (NASDAQ:GILD, ETR:GIS): Management has guided muted results due to seasonal weakness, with the analysts as a result not expecting a standout quarter forecasting $6 billion in sales, $376 million below consensus and a loss per share of $1.17. But they remain bullish on 2024 forecasting $27.8 billion in revenue, up $516 from the consensus and $4.65 in EPS.
- Moderna Inc (NASDAQ:MRNA, ETR:0QF): They forecast EPS in line with the consensus of a loss per share of $3.26 but lower revenues of $57 million, compared to the Street’s $96 million.
- Regeneron Pharmaceuticals Inc (NASDAQ:REGN): Noting that they remain skeptical of the outlook for the Eylea franchise for eye disease, the analysts reiterated their ‘Underperform’ rating on Regeneron but increased their price target from $710 to $720 due to the company’s net cash position. For Q1, they are below the Street, forecasting revenue of $3.2 billion and EPS of $9.95, $60 million and $0.11 lower respectively.
- Royalty Pharma: The analysts are in line with the consensus forecasting Q1 revenue of $693 million and EPS of $1.01. They repeated their ‘Buy’ rating on the stock but lowered their price target from $40 to $38 due to changes in net cash.
- Vertex Pharmaceuticals: Expectations cystic fibrosis medicine Trikafta will continue to outperform have the analysts higher than the Street for both quarterly revenue and EPS in Q1, forecasting $2.6 billion and $4.24, ahead by $13 million and $0.17 respectively.