AT-466

Two familiar leaders—Eli Lilly (+45%) and Novo Nordisk (+30%)—paced an industry revenue boom in the fourth quarter. So far, Teva is the only drugmaker that posted a year-over-year sales decline in the fourth quarter. Revenues in the biopharma industry continued to boom in the fourth quarter of last year, following a pattern seen increasingly throughout 2024. Of the world’s 22 biopharma companies that had reported quarterly revenue of at least $2 billion by Feb. 24, only one posted a year-over-year decline.And that decrease had a caveat. Teva saw its revenue fall by 5% in the fourth quarter because of a $500 million upfront payment it received in a drug collaboration with Sanofi in the fourth quarter of 2023. Without that addition, which the company chalked up as revenue, Teva would have reported a 5% increase in the most recent period.How rare is it to see a quarter in which just one biopharma had a revenue decline? Consider that in the first quarter of 2024, seven companies reported falling sales year-over-year.“Q4 is always tricky,” Pankit Bhalodia, West Monroe's managing director of healthcare and life sciences, said in an interview. “I don’t know how much of this is in anticipation of all the changes that might potentially happen in ’25 with the new [Trump] administration, with increased demand or whatnot.” The revenue increase leaders of the fourth quarter were familiar—Eli Lilly (45%) and Novo Nordisk (30%). For both companies, the increases were their highest for any quarter in 2024. While Lilly has delivered seven straight quarters with at least a 20% increase, Novo has topped the 20% growth mark in 12 consecutive quarters.Boosted by hefty sales of its diabetes and obesity drugs, Lilly posted an annual revenue increase of 32% in 2024, while Novo, with a similar growth portfolio, generated a 26% revenue bump for the year. Lilly’s revenue increase in the quarter wasn’t just due to its GLP-1/GIP products, however. The company also said that sales of its non-incretin drugs jumped by 20% year over year and pointed to the performance of breast cancer therapy Verzenio and heart failure treatment Jardiance, which rang up quarterly figures of $1.6 billion and $1.2 billion, respectively.Since announcing in January at the J.P. Morgan Healthcare Conference that it expects revenue to increase 32% in 2025, Lilly has seen its market cap increase from $745 billion to $844 billion, which is more than twice the value of any other company in the industry.Much of the investor enthusiasm surrounds the prospects of Lilly’s obesity treatments in a market that is still growing. Asked during the company’s quarterly conference call whether Lilly was reaching the “edge of the demand curve” for obesity drugs, CEO David Ricks said, “We don’t think we’re close to it right now.”“There’s a lot of potential growth in the GLP area—in other potential indications and other disease states,” Steven Lupo, also of consulting firm West Monroe, added in an interview.In presenting its quarterly earnings, Novo projected a slowdown in its sales momentum, estimating revenue will increase between 16% and 24% in 2025. Since that announcement, Novo’s market cap has increased slightly to $349 billion. With its surge over the last few years, Novo has become the highest valued biopharma company in Europe.Other double-digit gainers Of the 22 biopharma companies that reported fourth quarter revenue of more than $2 billion by Feb. 24, nine posted double-digit increases and nine others had single-digit increases of at least 5%.Among those with double-digit growth in the fourth quarter was AstraZeneca, with a 24% revenue increase, sparked largely by 27% increases in sales for both its oncology drugs and its respiratory and immunologic treatments. The showing in the quarter closed a remarkable year for the company in which its sales increased by 18%. AZ expects a slowdown in its momentum in 2025, projecting a revenue increase in the high single digits.Pfizer started the year with a 19% revenue decline in the first quarter, then ended it with a 23% sales increase in the fourth quarter. While the acquisition of Seagen—and the nearly $1 billion quarterly increase in sales of antibody-drug conjugate drugs brought by the Seattle biotech—played a significant role in boosting revenues, a larger factor was a surprising spike in the combined sales of COVID-19 products Comirnaty and Paxlovid, which reached $4.1 billion in the fourth quarter.While Astellas achieved a 22% quarterly revenue increase—due largely to booming sales of its Pfizer-partnered prostate cancer treatment Xtandi and ADC bladder cancer drug Padcev—there also was bad news. Due largely to the struggles of eye disease drug Syfovre and myotonic dystrophy gene therapy prospect AT466, Astellas wrote off impairments of 180 billion Japanese yen ($1.2 billion).Vertex and Novartis achieved revenue increases of 15% each in the fourth quarter, which was the highest quarterly increase either company achieved in 2024.For Novartis, a series of divestments have left it as a pure-play innovator better equipped to take advantage of its strengths, according to CEO Vas Narasimhan.“The strategy of focusing the company has unlocked value and actually enabled Novartis to be much stronger for the long run,” he told reporters last month.Other drugmakers with double-digit revenue increases were Amgen and Regeneron at 11% each. Amgen’s revenue bump was down from at least 20% in each of the other quarters of 2024 as the company realized added sales from its $27.8 billion acquisition of Horizon, which came complete early in the fourth quarter of 2023.While Regeneron is struggling to make advances with its Eylea franchise, it is thriving with Sanofi-partnered Dupixent—which gained a key FDA nod to treat chronic obstructive pulmonary disease last year—and cancer treatment Libtayo, which reached blockbuster sales for the first time in 2024.Single-digit gainers It was a successful quarter for several drugmakers that saw single-digit revenue gains, including AbbVie (6%), which had its highest quarterly revenue increase since the fourth quarter of 2021. The performance is evidence that the company has come full circle from the loss of exclusivity of megablockbuster Humira and that its next-gen immunology duo Skyrizi and Rinvoq is primed to provide growth over the next decade. In its fourth-quarter earnings presentation, AbbVie estimated combined sales of the Humira follow-ons would reach $31 billion in 2027.Gilead Sciences saw a revenue increase of 6% in the quarter, continuing its momentum for the year. In 2024 overall, fueled by sales of HIV products, Gilead had a 6% bump in sales, which came after small revenue declines in the previous two years. The company expects a reversion in 2025, with sales falling from $28.8 billion to a range of $ billion to $28.6 billion.Johnson & Johnson had a modest 5% increase in the fourth quarter, but the company is making steady progress with its sales gains increasing in each quarter of 2024 as it rebuilds its revenue after spinning off its huge consumer health business. The new company, Kenvue, reported sales of $15.1 billion in 2024, which represented a 0.1% increase from the previous year, showing why J&J was anxious to shed the unit. For the purposes of these growth rankings, consumer healthcare companies like Kenvue are excluded. Another company that has undergone a recent reorganization—including an ongoing attempt to separate from its consumer health unit—is Sanofi. The French drugmaker closed a strong year with a 9% revenue increase in the fourth quarter.Bristol Myers Squibb also finished up a solid year with an 7% revenue gain in the fourth quarter, after increases of 9% and 8% in the previous two periods, though the bigger news during its fourth-quarter presentation was that the company will cut another $2 billion in costs by the end of 2027. BMS expects the sales momentum to halt next year, projecting revenue to decline from $48.3 billion to $45.5 billion this year.Biogen generated a 3% increase in sales in the fourth quarter, which was a promising turn-the-corner result considering that the company’s revenue has declined in each of the last four years, including a 2% drop in 2024.Disappointments A few drugmakers reported disappointing results in the fourth quarter. One was GSK, with a 1% increase as sales of Arexvy plummeted (PDF) by 70% year over year, largely because the Centers for Disease Control and Prevention narrowed its guidance on which adults should receive respiratory syncytial virus shots.For other companies that rely heavily on manufacturing vaccines—such as Merck, Sanofi, Pfizer and Moderna—there is considerable angst over what may become of the U.S. market with anti-vaccine activist Robert F. Kennedy Jr. taking over as secretary of the Department of Health and Human Services.“From a regulatory pathway and approval process—that’s probably one of the bigger concerns that I’m hearing,” Lupo said. “How will this effect what we’ve got in the pipeline? And when can we anticipate getting new products on the market?”  After double-digit revenue increases in each of the previous three quarters of 2024, Takeda saw just a 3% sales increase in its last quarter. A few drugmakers not included in this summary—which will present fourth-quarter earnings in the next few weeks—are likely to report revenue decreases. They include Bayer and Viatris, which each had sales decreases in each of the first three quarters of 2024. Additionally, Merck KGaA, which has yet to report, entered the fourth quarter with a 1% revenue decline through the first nine months of 2024.

Astellas' total revenue reached 1.45 trillion Japanese yen ($9.52 billion) over the last nine months of 2024. Navigating regulatory hurdles in the U.S. and Europe, plus fierce competition from rival Apellis, Astellas’ geographic atrophy (GA) med Izervay has taken a few beatings in recent months. Still, the Japanese drugmaker is chasing the light it sees in an upcoming FDA decision. Izervay pulled down $107 million in sales in the last three months of 2024, up merely 4% on a quarter-over-quarter basis. It marked a significant slowdown for the drug considering it remains in its early launch phase, delivering 26% sequential growth in the prior quarter.The rollout suffered a “temporary impact” from the FDA's "unexpected" decision to reject a label update for Izervay in GA secondary to age-related macular degeneration (AMD) as well as changes in inventory levels, Astellas Chief Financial Officer Atsushi Kitamura said on a conference call Tuesday.With its label-expansion bid, the company hopes to include in the drug's label positive two-year trial results for monthly and every-other-month dosing of Izervay in patients who have GA secondary to AMD. The drug's current label states that it's recommended "for up to 12 months."While the FDA rejection was not about any benefit-risk concerns, Astellas has heard that many retina specialists are pausing Izervay use for patients who have reached 12 months on the drug.  For Astellas' launch, the good news is that the company has "rarely heard of switching to a competitive drug,” Kitamura said, emphasizing that patients will likely “quickly resume” treatment upon the expected label update. Following that setback, the company is now back on track with a new FDA decision date slated for Feb. 26, it announced in its quarterly earnings report. Given the quick turnaround on the resubmission, the FDA’s requested changes may have been “relatively minor,” William Blair analyst Lachlan Hanbury-Brown pointed out in a note to clients. Astellas had described the FDA’s comments at the time as focused on a “statistical matter” related to proposed labeling language. Still, the “negative optics” of the original rejection could hurt Izervay from a competitive standpoint, the analyst said Syfovre competition As to why patients aren’t switching to Apellis’ rival Syfovre in the meantime, Astellas' chief commercial officer Claus Zieler highlighted the established safety profile of Izervay.Syfovre and Izervay have been rubbing elbows in the GA market since Izervay launched six months after Syfovre in 2023. In its recent financial report, Astellas called Izervay the leading treatment option for new patient starts, boasting 60% of the new patient market share from October to November and 40% of the total market share.Between the two, Hanbury-Brown maintained in William Blair’s recent note that Apellis’ rival Syfovre stands to grab “significant” market share and has blockbuster potential due to its superior efficacy over Izervay.Astellas executives pushed back against similar assertions raised during the conference call that Syfovre has the efficacy edge over Izervay. Zieler argued that those statements are based on cross-trial comparisons and cannot be made without a head-to-head study.“What you can say, however, is that our safety profile is in line with our clinical study, and I don’t think Apellis can say that about its competitor drug,” Zieler remarked.Shortly after its launch, Syfovre was linked to rare but serious reports of a type of eye inflammation called retinal vasculitis. After an investigation, the company homed in on “variations” on the filter needle included in some injection kits as the possible culprit, but it couldn’t conclusively determine that the needles were to blame. European hurdles In Europe, neither drug has made it onto the market. Astellas clawed back its marketing authorization application in October following discussions with the European Medicines Agency, while Syfovre has been rejected twice by the regulator.The European pullback prompted a 115.1 billion Japanese yen ($760 million) impairment charge at Astellas during the quarter.That doesn’t mean Astellas is throwing in the towel on its global prospects. Reaching more patients worldwide is “extremely important,” Kitamura stressed. Along with a newly submitted application in its home country of Japan, the company has begun individual discussions with regulatory authorities in major countries and will “consider” a submission in Europe after it concludes discussions with officials there. Along with its Izervay impairment, Astellas also booked a 51.8 billion Japanese yen ($339 million) impairment loss on its myotonic dystrophy gene therapy prospect AT466 as the “development timeline and the competitive environment have changed from our initial assumptions,” Kitamura explained. Including another charge on terminated medical devices projects, the quarter’s impairments altogether totaled 180 billion Japanese yen ($1.18 billion).Over the last nine months of 2024, the company’s total revenue reached 1.45 trillion Japanese yen ($9.52 billion), a 22% jump from the same period last year. The bulk of sales came from Pfizer-partnered prostate cancer med Xtandi and bladder cancer antibody-drug conjugate Padcev, the latter of which saw a 110.4% sales jump to 117 billion Japanese yen ($767 million).