It’s Earnings Period. Key Insights to Observe After J&J’s Strong Performance

On Tuesday, Johnson & Johnson initiated the third-quarter earnings announcements. J&J is frequently regarded as the industry benchmark within the biopharma sector—a sort of early warning signal analysts use to assess the performance of other companies in the field. Being the front-runner in announcing earnings brings with it significant responsibility and expectations.

The company reported robust growth for Q3 that surpassed Wall Street’s forecasts, achieving sales of approximately .5 billion—a 5.2% rise compared to the previous year’s equivalent quarter. Adjusted earnings per share (EPS) faced a decline of 9% year-over-year, landing at .42, yet this figure still exceeded analyst predictions. The oncology division emerged as the primary growth catalyst, generating .38 billion in sales, with the multiple myeloma treatment Darzalex recognized as J&J’s leading pharmaceutical product, racking up over billion in sales globally for Q3.

A company poised to deliver encouraging updates is Eli Lilly, anticipated to report this quarter that it has potentially edged ahead of Novo Nordisk in the competitive landscape of weight loss medications, between Zepbound and Wegovy. Q2 earnings indicated that the rivalry between the two pharmaceutical giants is intensifying, with Lilly narrowing the market share divide. Meanwhile, the shortage of obesity medications has concluded for Lilly while persisting for Novo.

BMO Capital Markets analyst Evan Seigerman remarked in a recent report on Q3 results that “expectations are for a split in the obesity market, with Lilly possibly taking the lead given improved supply situations,” whereas “Wegovy prescriptions might indicate underperformance due to ongoing manufacturing limitations.”

Save the dates: Lilly will disclose its Q3 results on October 30, while Novo Nordisk will unveil its financial performance on November 6.

Pfizer, another major player in the pharmaceutical arena, is also predicted to exceed projections—potentially more so than J&J. In a statement to investors this week, Guggenheim Securities analysts highlighted Pfizer as likely to showcase “substantial upside possibilities” to consensus estimates driven by heightened demand for COVID-19 associated products. “We anticipate significant upside potential in the forthcoming earnings report due to market conditions for key products in Q3, especially Comirnaty and Paxlovid,” the firm noted, projecting Q3 sales of .95 billion and EPS of [openai_gpt prompt=”Rewrite the following article for blog with 80% uniqueness, text length 1800-2000 characters, don’t alter any figures or data, don’t add your comments or anything else, and return the result in HTML format:

Johnson & Johnson kicked off the third-quarter earnings season on Tuesday. J&J is often seen as the bellwether for the biopharma industry, the canary in the coal mine as it were, that analysts use to gauge the performance of other companies in the sector. Being first out of the earnings gate comes with awesome responsibility and weight.

J&J saw solid Q3 growth that exceeded Wall Street’s expectations, with sales of nearly $22.5 billion representing a 5.2% increase from the same quarter last year. Adjusted earnings per share (EPS) dropped 9% year-over-year to $2.42, but this still beat analysts’ expectations. Oncology, which brought in $5.38 billion in sales, stood out as the biggest growth driver, with multiple myeloma therapy Darzalex emerging as the company’s top pharma asset with more than $3 billion in Q3 sales worldwide.

One company that is expected to bring more positive news is Eli Lilly, which may announce this quarter that it has finally pulled ahead of Novo Nordisk in the two-horse weight loss drug race between Zepbound and Wegovy. Q2 earnings showed that the competition between the pharma giants’ weight-loss drugs is getting closer with Lilly closing the market share gap, and the writing is now on the wall as the obesity drug shortage ends for Lilly and continues for Novo.

BMO Capital Markets analyst Evan Seigerman wrote this week of Q3 results to “expect bifurcation in the obesity duopoly, with Lilly potentially pulling ahead given easing supply dynamics” while “Wegovy scripts could suggest underperformance as manufacturing capacity remains constrained.”

Mark your calendars: Lilly reports Q3 results on Oct. 30 and Novo Nordisk reveals its financial numbers on Nov. 6.

Pfizer is another Big Pharma that is expected to beat expectations—likely more so than J&J. In a report to investors this week, Guggenheim Securities analysts said they see Pfizer as a winner with “significant upside potential” to consensus numbers based on increased demand for COVID-19 products. “We see significant potential for upside on the upcoming earnings release given dynamics for key products in the third quarter, most notably Comirnaty and Paxlovid,” according to Guggenheim, which forecasts Q3 sales of $16.95 billion and EPS of $0.78, significantly above the current FactSet consensus sales of $14.74 billion and EPS of $0.59, respectively. Pfizer will report its results for the quarter on Oct. 29.

I’ll be listening to Friday’s webcast with Jefferies analysts who will be going over their Q3 expectations for other large-cap pharma and biotech companies, including Bristol Myers Squibb, Merck and Regeneron. Their insights are too late for this week’s column, but the firm has already weighed in on Amgen (AMGN), Biogen (BIIB), Gilead Sciences (GILD), Moderna (MRNA) and Vertex Pharmaceuticals (VRTX). And here is where we start to see some of those Q3 duds, in particular, Moderna.

Jefferies analysts in a report this week wrote that Q3 “seems mixed or a tad messy though fundamentals and our thesis are well intact here: we like AMGN and GILD and have been bullish all year; BIIB is having issues on Leqembi and needs another M&A deal; VRTX is fine and LSR chronic pain data should be positive though stock reflected a lot already in valuation and stock run; MRNA has profitability issues and guidance is murky—COVID jabs seems to be ‘peaking early’ as well, which isn’t a positive.”

Jefferies’ outlook for Moderna is decidedly negative following Q2 results, when the company lowered 2024 guidance, and “more so now” after last month’s annual R&D Day, “when they gave lower 2025 guidance and $1B cost cuts aren’t occurring until 2027.”

Jefferies analysts also noted that respiratory syncytial virus (RSV) scripts and guidance are “essentially negligible” for 2024, while it remains “unclear” if Moderna will be able to secure contracting in 2025 due to strong competition from GSK and Pfizer. Add to these challenges the uncertainty about what RSV vaccine recommendations will look like next season. “The key concern here is that they continue to burn cash (while spending is still high $5-6B) and they pushed out profitability until 2028 vs 2026 prior guidance,” the analysts wrote.

Adding to the company’s problems, we learned this week that rival GSK has filed two lawsuits against Moderna, alleging that the vaccine developer has used protected mRNA technology for its COVID-19 vaccine Spikevax and RSV shot mResvia. Moderna is scheduled to report Q3 financial results on Nov. 7.

Looking beyond Q3 earnings, the biopharma industry in general—like other sectors of the U.S. economy—is closely watching the presidential election to be held Nov 5. Seigerman wrote this week that Q3 earnings “feels like the calm before the storm with many investors on the sidelines ahead of the U.S. election.”

“].78, which surpasses current FactSet consensus estimates of .74 billion in sales and an EPS of [openai_gpt prompt=”Rewrite the following article for blog with 80% uniqueness, text length 1800-2000 characters, don’t alter any figures or data, don’t add your comments or anything else, and return the result in HTML format:

Johnson & Johnson kicked off the third-quarter earnings season on Tuesday. J&J is often seen as the bellwether for the biopharma industry, the canary in the coal mine as it were, that analysts use to gauge the performance of other companies in the sector. Being first out of the earnings gate comes with awesome responsibility and weight.

J&J saw solid Q3 growth that exceeded Wall Street’s expectations, with sales of nearly $22.5 billion representing a 5.2% increase from the same quarter last year. Adjusted earnings per share (EPS) dropped 9% year-over-year to $2.42, but this still beat analysts’ expectations. Oncology, which brought in $5.38 billion in sales, stood out as the biggest growth driver, with multiple myeloma therapy Darzalex emerging as the company’s top pharma asset with more than $3 billion in Q3 sales worldwide.

One company that is expected to bring more positive news is Eli Lilly, which may announce this quarter that it has finally pulled ahead of Novo Nordisk in the two-horse weight loss drug race between Zepbound and Wegovy. Q2 earnings showed that the competition between the pharma giants’ weight-loss drugs is getting closer with Lilly closing the market share gap, and the writing is now on the wall as the obesity drug shortage ends for Lilly and continues for Novo.

BMO Capital Markets analyst Evan Seigerman wrote this week of Q3 results to “expect bifurcation in the obesity duopoly, with Lilly potentially pulling ahead given easing supply dynamics” while “Wegovy scripts could suggest underperformance as manufacturing capacity remains constrained.”

Mark your calendars: Lilly reports Q3 results on Oct. 30 and Novo Nordisk reveals its financial numbers on Nov. 6.

Pfizer is another Big Pharma that is expected to beat expectations—likely more so than J&J. In a report to investors this week, Guggenheim Securities analysts said they see Pfizer as a winner with “significant upside potential” to consensus numbers based on increased demand for COVID-19 products. “We see significant potential for upside on the upcoming earnings release given dynamics for key products in the third quarter, most notably Comirnaty and Paxlovid,” according to Guggenheim, which forecasts Q3 sales of $16.95 billion and EPS of $0.78, significantly above the current FactSet consensus sales of $14.74 billion and EPS of $0.59, respectively. Pfizer will report its results for the quarter on Oct. 29.

I’ll be listening to Friday’s webcast with Jefferies analysts who will be going over their Q3 expectations for other large-cap pharma and biotech companies, including Bristol Myers Squibb, Merck and Regeneron. Their insights are too late for this week’s column, but the firm has already weighed in on Amgen (AMGN), Biogen (BIIB), Gilead Sciences (GILD), Moderna (MRNA) and Vertex Pharmaceuticals (VRTX). And here is where we start to see some of those Q3 duds, in particular, Moderna.

Jefferies analysts in a report this week wrote that Q3 “seems mixed or a tad messy though fundamentals and our thesis are well intact here: we like AMGN and GILD and have been bullish all year; BIIB is having issues on Leqembi and needs another M&A deal; VRTX is fine and LSR chronic pain data should be positive though stock reflected a lot already in valuation and stock run; MRNA has profitability issues and guidance is murky—COVID jabs seems to be ‘peaking early’ as well, which isn’t a positive.”

Jefferies’ outlook for Moderna is decidedly negative following Q2 results, when the company lowered 2024 guidance, and “more so now” after last month’s annual R&D Day, “when they gave lower 2025 guidance and $1B cost cuts aren’t occurring until 2027.”

Jefferies analysts also noted that respiratory syncytial virus (RSV) scripts and guidance are “essentially negligible” for 2024, while it remains “unclear” if Moderna will be able to secure contracting in 2025 due to strong competition from GSK and Pfizer. Add to these challenges the uncertainty about what RSV vaccine recommendations will look like next season. “The key concern here is that they continue to burn cash (while spending is still high $5-6B) and they pushed out profitability until 2028 vs 2026 prior guidance,” the analysts wrote.

Adding to the company’s problems, we learned this week that rival GSK has filed two lawsuits against Moderna, alleging that the vaccine developer has used protected mRNA technology for its COVID-19 vaccine Spikevax and RSV shot mResvia. Moderna is scheduled to report Q3 financial results on Nov. 7.

Looking beyond Q3 earnings, the biopharma industry in general—like other sectors of the U.S. economy—is closely watching the presidential election to be held Nov 5. Seigerman wrote this week that Q3 earnings “feels like the calm before the storm with many investors on the sidelines ahead of the U.S. election.”

“].59. Pfizer’s earnings report is scheduled for October 29.

This Friday, I will tune in to a webcast by Jefferies analysts analyzing their Q3 expectations for other major pharmaceutical and biotech players, such as Bristol Myers Squibb, Merck, and Regeneron. While their analysis will be published too late for this week’s article, the firm has already shared insights regarding Amgen (AMGN), Biogen (BIIB), Gilead Sciences (GILD), Moderna (MRNA), and Vertex Pharmaceuticals (VRTX). This is where we begin to see underwhelming Q3 results, particularly for Moderna.

According to Jefferies analysts’ recent report, Q3 appears to be “somewhat mixed or slightly chaotic, though the fundamentals and our thesis remain intact: AMGN and GILD continue to get our support; BIIB faces challenges with Leqembi and requires another merger or acquisition; VRTX appears stable but much of its positive news is already reflected in its stock price; MRNA is dealing with profitability challenges, and its projections remain uncertain—with COVID vaccinations seemingly reaching a ‘pre-peak’ stage, which is a concern.”

The outlook for Moderna from Jefferies is generally pessimistic following Q2 results where the company downgraded its 2024 forecasts. Analysts have stressed that “increasing concerns” emerged after last month’s annual R&D Day, which indicated lowered 2025 guidance and billion in cost reductions will not take effect until 2027.

Moreover, Jefferies cited respiratory syncytial virus (RSV) script forecasts and guidance as being “minimal” for the year 2024, raising questions regarding Moderna’s contracting capacity in 2025 amid fierce competition from GSK and Pfizer. Additionally, uncertainty about RSV vaccine recommendations for the upcoming season adds to the company’s complications. “The pressing issue is their high cash burn (-6 billion) while profitability has been deferred until 2028 instead of the previously indicated 2026,” analysts warned.

To add to Moderna’s hurdles, this week it was reported that rival GSK has initiated two lawsuits against Moderna, claiming that the company has utilized proprietary mRNA technology in its COVID-19 vaccine, Spikevax, along with its RSV vaccine, mResvia. Moderna’s Q3 financial results are anticipated on November 7.

Beyond the Q3 earnings landscape, the biopharma sector, akin to other areas of the U.S. economy, is attentively monitoring the presidential election set for November 5. Seigerman expressed this week that Q3 earnings “seem like a quiet phase before a potential upheaval, with numerous investors remaining hesitant ahead of the U.S. elections.”