Barclays analyst Geoff Meacham on Thursday said he expected Gilead Sciences' (GILD) 2017 outlook to be hindered on limited hepatitis C sales. He also sees Merck (MRK) and Alexion Pharmaceuticals (ALXN) issuing sluggish views, though he is more bullish on Biogen (BIIB) and Johnson & Johnson (JNJ).
RBC Capital on Wednesday said much the same about Gilead, and also was more bullish on Biogen as well as on Amgen (AMGN).
Hepatitis C drug prescriptions dipped 6%-7% quarter over quarter in Q4, according to market tracker IMS. Gilead makes Sovaldi and Harvoni to combat hepatitis C.
Merck and Alexion, meanwhile, will guide to declining metrics on heavier spending and new management, respectively, Meacham predicted. "Though we'd argue this is widely anticipated," Meacham said in a research report.
He sees Biogen offering upside guidance on its Spinraza launch with Ionis Pharmaceuticals (IONS), and Johnson leveraging cost controls to offer a better 2017 view.
IBD'S TAKE: As hepatitis C sales fall, where will Gilead go? Check out IBD's Industry Themes for the full scoop on how biotech's five biggest are expected to do in Q4.
Ahead of the Q4 pharma earnings season, which starts next week with reports from companies such as J&J, Stryker (SYK) and Intuitive Surgical (ISRG), Meacham boosted his price target on Incyte (INCY) stock, noting that company's phase three tumor efforts with Merck. The duo are testing immunotherapy Keytruda and epacadostat in four tumors.
Meacham expects Incyte, in its Q4 earnings conference call, to give some color on Jakafi trials in graft vs. host disease, as well as its tumor efforts with Merck. He bumped his price target on Incyte stock to 135 from 105. Incycte hasn't yet set a date for its Q4 earnings report.
Incyte stock, which last week touched a 14-month high just shy of 119, rallied 2% to close at 117.53 in the stock market today.
For Q4, the consensus of analysts polled by Thomson Reuters expects Incyte to report $324.8 million in sales and 14 cents earnings per share, up a third and down 52%, respectively, vs. the year-earlier quarter.
Merck's spending is likely ramping on Keytruda which was granted priority review last week in combination with Eli Lilly's (LLY) chemotherapy Alimta to treat non-squamous non-small cell lung cancer (NSCLC) in patients with a high expression of the PDL1 gene.
Keytruda-plus-Alimta is in phase three testing. If data are strong, Merck could open itself up to a larger patient population vs. the 25%-30% of patients with a 50%-plus PDL1 expression. Keytruda is already approved as a monotherapy in high-expressing PDL1 patients with NSCLC.
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