This week, J&J JNJ set in motion the second-quarter earnings season for the drug and biotech sector with an earnings and sales beat. Novartis NVS reported mixed results. GSK plc GSK completed the separation of its Consumer Healthcare (CHC) segment into a new company, Haleon. Merck’s (MRK) head and neck cancer study on Keytruda failed while AbbVie ABBV filed a regulatory application in Europe seeking approval for its migraine candidate atogepant.

Recap of the Week’s Most Important Stories

J&J Beats on Q2 Earnings & Sales, Lowers View: J&J reported better-than-expected second-quarter results as it beat estimates for both earnings and sales. Its Pharmaceuticals unit continued to do well. Its COVID-19 vaccine sales improved in the second quarter after a lower-than-expected contribution in the first quarter. Sales in the MedTech segment continued to improve. However, sales were partly hurt by COVID-related restrictions in countries like China and labor and supply constraints.

However, J&J slightly lowered its sales and profit outlook for the year due to expected currency headwinds amid a strengthening U.S. dollar.

Novartis’ Mixed Q2: Novartis’ second-quarter results were mixed. It missed estimates for revenues while beating the same for earnings. Sales in Innovative Medicines rose 5% at constant currency driven by the strong growth of Entresto Cosentyx, Kisqali and Zolgensma.  Sales in the Sandoz division also rose 5% as the business continued to improve from COVID impacts and returned to normal. The company maintained its guidance for sales and core operating income to grow in the mid-single-digit range in 2022.

GSK Completes Demerger of Consumer Unit: GSK completed the demerger of its Consumer Healthcare (CHC) segment into a standalone company. The independent Consumer Healthcare company has been named Haleon. Shares of Haleon have already been listed on the London Stock Exchange (LSE), which started trading on Jul 18. It is expected that American Depositary Shares. representing shares of Haleon plc, will start trading with the ticker symbol “HLN” on the NYSE in a regular way from Jul 22.

GSK also completed its share consolidation following the demerger. GSK has issued four new ordinary shares of 31.25 pence each for every five existing ordinary shares of 25 pence each. With regard to ADS issued by GSK, four new ADSs will be issued for every five existing ADSs of GSK trading on the NYSE.

AbbVie Seeks Approval for Migraine Candidate in Europe: AbbVie submitted a marketing authorization application (MAA) to the European Medicines Agency (EMA) seeking approval of its CGRP receptor antagonist, atogepant for the prophylaxis treatment of migraine. The application is supported by data from two pivotal phase III studies, ADVANCE and PROGRESS, which evaluated atogepant in adult patients with episodic and chronic migraine.

Atogepant is already approved in the United States as Qulipta for the preventive treatment of episodic migraine since last September. Last month, AbbVie filed for the label expansion of Qulipta in the United States as a preventive treatment for chronic migraine. However, atogepant is not yet approved for any indication in Europe.

AbbVie announced a strategic alliance with eye care solutions company, iSTAR Medical to further develop and commercialize the latter’s most advanced product, MINIject, a minimally invasive glaucoma surgical device for patients with glaucoma. For the deal, AbbVie will make a $60 million upfront payment to iSTAR Medical. MINIject is already approved and launched in Europe, while in the United States, a U.S. Premarket Approval study (STAR-V) has been filed to allow commercialization.

Merck’s Head and Neck Cancer Study on Keytruda Fails: Merck’s phase III study evaluating Keytruda for unresected locally advanced head and neck squamous cell carcinoma (HNSCC) failed to meet its primary endpoint of event-free survival (EFS). The final analysis of the study showed that there was an improvement in EFS in patients treated with the Keytruda plus concurrent chemoradiation therapy (CRT) compared to the placebo plus CRT. However, the data failed to meet statistical significance. Keytruda is presently approved for certain later stages of HNSCC in the United States, Europe and some other countries. The KEYNOTE-412 study was evaluating Keytruda in earlier stages of HNSCC.

The NYSE ARCA Pharmaceutical Index rose 0.4% in the last five trading sessions.

Large Cap Pharmaceuticals Industry 5YR % Return

Large Cap Pharmaceuticals Industry 5YR % Return

Here’s how the eight major stocks performed in the last five trading sessions.

Image Source: Zacks Investment Research

In the last five trading sessions, Novartis rose the most (4%) while Merck declined the most (4%).

In the past six months, Lilly rose the most (36%) while Roche declined the most (12.3%).

(See the last pharma stock roundup here: MRK Buys Cancer Drug Rights, SNY Dupixent Kids Study Succeeds)

What's Next in the Pharma World?

Keep a tab on Q2 earnings of Pfizer, Merck, Sanofi, AstraZeneca and others and regular pipeline and regulatory updates next week.

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