Generics continue to erode quarterly sales

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A glance at quarterly results from Bristol Myers Squibb, Merck and AstraZeneca reveals the deep impact of generics on sales of branded pharmaceuticals.

Among the results:
Bristol Myers-Squibb had sales of $2.7 billion for the quarter ended September 30, down 29% from $5.3 billion for the same period last year. The dip was partly the result of patent expiries, including the 96.4% drop in Plavix sales to $64 million for the quarter, compared to $1.7 billion in sales for the same period last year, in addition to a 56% drop in sales of Avapro, which rang in $95 million in sales for the quarter, compared to $216 million for the same period last year. Sales were up for the RA drug, Orencia, to  $307 million for the quarter, compared to $233 million for the same period last year -- a 32% increase. Diabetes medication Ongylza had $178 million in sales, a 41% boost, compared to $127 million for the same period last year. The company also suffered from the discontinuation of its experimental hepatitis C drug in August, after a clinical trial patient died and others were hospitalized.

Novartis sales slid 7% to $14 billion for the quarter, compared to $15 billion for the same period last year. The company attributed some of the weakness to the Diovan's patent expiration, even though the FDA has yet to approve a generic competitor. Pharmaceutical sales were down 5% for the quarter, at $7.8 billion, compared to $8.1 billion for the same period last year, while muted sales of flu vaccines in the northern hemisphere coupled with shipment issues helped drive down vaccine and diagnostic sales by 11% during the quarter, to $582 million, compared to the same period last year. Quality issues continued to affect sales during the quarter, with Consumer and Animal Health sales down 22%, to $938 million, compared to the same period last year. Some OTC products, including Excedrin, started to resurface on shelves this month. Excedrin, along with Lamisil and Triaminic are being produced by third-parties and the company said in a statement that it doesn't expect its Lincoln, NE site to start churning out products in the upcoming quarter. The company reined in marketing and sales costs to 26% of sales during the quarter, compared to 26.4% from the same period last year. Novartis did see growth among its new-launch products, including Lucentis, Gilenya, Afinitor and Tasigna, contributing 29% to group sales, for $4 billion, compared to 25% for the same period last year. Bernstein analyst Tim Anderson wrote Friday that doctors have increased Gilenya prescriptions partly as a result of the creation sites where patients can be monitored during the first-dose, winning over doctors who do not want to do this in their offices.

Merck sales slid 4.4% during the quarter, to $11.5 billion, compared to $12 billion for the same period last year, with pharmaceutical sales sliding 4.6% to $9.9 billion, compared to $10.4 billion for the same period last year. Jefferies analyst Jeffrey Holford wrote Friday that Januvia and Remicade sales fell well below expectations. Januvia sales were up 15% for the quarter, at $975 million, compared to $846 million for the same period last year, while Remicade sales fell 13%, to $490 million for the quarter, compared to $561 million for the same period last year. Sales of the former blockbuster Singulair fell 55% during the quarter, with $602 million in sales, compared to $1.3 billion for the same period last year. The asthma medication went generic in the US August 3 and Europe will follow suit in February 2013. The company saw an uptick in sales of its HPV vaccine Gardasil, to $581 million, a 31% increase compared to the same period last year. Bernstein's Anderson noted that 55% of first doses are being given to males, according to a company call, but that the company did not say whether the increase was among minors or adult males. Merck was unable to comment by press time, but the increase does overlap with February 3 recommendation by the Advisory Committee on Immunization Practices to make the vaccine routine among boys between the ages of 11 and 13. The company said at the time that it was not going to ramp up its marketing efforts to capture this group.

AstraZeneca's new CEO Pascal Soriot delivered his inaugural earnings report with the unhappy announcement that sales fell 19% for the quarter, to $6.7 billion. The company had major falloff in sales of Seroquel IR which went generic in the US in March and for which global sales plummeted 83%, to $169 million for the quarter. Overall US sales were down 19% for the quarter, compared to last year, and Rest of World Sales fell 12% during the quarter. Nexium sales lost their footing, falling 6% during the quarter, to $995 million, in step with Prilosec, which saw sales fall 13%, to $189 million. Brilinta sales were $24 million, compared to $13 million during the same period last year. Bernstein's Anderson noted that the CEO recalled his Plavix launch experience during the earnings call and said there has been unconfirmed speculation the company could pursue a co-promote for the drug. Anderson also said the CEO said he intended to keep the company “pure-play,” meaning it will stick with making drugs and will steer clear of manufacturing generics.
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