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Big-cap drugmakers Regeneron Pharmaceuticals ( REGN ) and Merck ( MRK ) were moving in opposite directions in Thursday trading after their Q1 earnings reports, though both companies raised guidance. Regeneron’s quarterly revenue rose 38% over the year-earlier period to $1.2 billion, beating analysts’ consensus by about $240 million, according to Thomson Reuters. Earnings of $2.57 a share were a penny short of estimates and down 11% from last year’s Q1. But on the crucial metric of U.S. sales of flagship drug Eylea, Regeneron reported 44% growth to $781 million, beating consensus by $11 million, and the company raised its full-year growth estimate to 20% to 25% vs. its previous 20%. The earnings miss stemmed from higher spending for selling, general and administrative costs, though spending guidance for the year remained unchanged. Also, cholesterol drug Praluent, which was launched last July, missed consensus again, but its numbers remained small ($13 million) as the company awaited the results of a cardiovascular outcomes trial of both Praluent and rival Amgen ‘s ( AMGN ) Repatha later this year. Regeneron said that payer coverage for Praluent is good so far, with 74% of the commercially insured and 91% of those on Medicare having access to the drug. Regeneron stock was up 5% in midday trading on the stock market today , near 380. Merck Reports Mixed Quarter Merck posted earnings of 89 cents a share, up 5% from the year-earlier period and beating consensus by 4 cents. Sales declined 1% to $9.31 billion, missing Wall Street’s number by $150 million. Merck stock was down 1.5% midday Thursday, near 54. Merck added a few cents to its 2016 EPS guidance range, now $2.65 to $3.77, and also raised the low end of its revenue guidance, now $39 billion to $40.2 billion. Echoing a number of global pharmas this earnings season, Merck cited improving foreign-exchange rates. The revenue shortfall was spread around a number of different drugs, including blockbuster diabetes drug Januvia and immunology drug Remicade. More interesting to analysts was up-and-coming cancer drug Keytruda, which missed estimates in the U.S. but beat slightly worldwide, especially after rival Bristol-Myers Squibb ‘s ( BMY ) Opdivo beat consensus last week. Bristol-Myers also moved up its reporting date for a trial of Opdivo as a first-line treatment for lung cancer to Q3 from its previously guided Q4, eroding the advantage for Merck, which expects to report results for a similar trial of Keytruda at midyear. Both drugs are now approved only for previously treated patients, so first-line approval could significantly expand the market. Merck also reported $50 million in sales for its hepatitis C drug Zepatier, which just launched in late January. Although that’s tiny compared with the $2.1 billion reported by market leader Gilead Sciences ( GILD ), both Gilead and AbbVie ( ABBV ) said on their earnings calls last week that Merck’s aggressive discounting had affected their own businesses. Nonetheless, RBC Capital Markets analyst Michael Yee wrote that this may not have been directly responsible for Gilead’s miss. “(Merck) suggested negotiations for important parity access remain ongoing, with the exception of the Veterans Administration (10% of the market), which they have good access on … but interestingly suggested many of the commercial payor access deals are for 2017 impact, since 2016 contracts were already completed,” Yee wrote in a research note. “So what Gilead said about their lower sales in U.S. (being) mostly due to just higher gross-to-net from healthier patients coming in (not so much from competition) could be true, realizing price competition is still ongoing and coming and needs to be watched.” Scalper1 News
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