J&J's Remicade Versus Inflectra

Johnson & Johnson (JNJ-$95.63) isn’t waiting until decade’s end to expand its offering of anti-inflammatory therapies: to refresh the immunology franchise, JNJ is directing R&D at promising next-generation biologics, including the anti-interleukin (IL)-23 monoclonal antibody Guselkumab for psoriasis and rheumatoid arthritis (RA); Sirukumab, an anti-interleukin (IL)-6 monoclonal antibody in the treatment of patients with RA; and, an oral Janus Kinase (JAK) inhibitor (ASP015K) for RA.

Management also told analysts at a recent healthcare conference that new products are expected to comprise almost 46% of pharmaceutical sales by 2017. Auspicious product launches across other disease markets (including the blood thinner Xarelto, prostate cancer drug Zytiga, hepatitis-C antiviral Incivo and interleukin inhibitor Stelara for psoriasis) suggest JNJ is having early success in executing on its goal to lessen dependence on Remicade through diversification.

Read more at YCharts: J&J’s Top Drug vs. Generic: Investment Thesis

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.  

Celgene Grows Beyond Cancer Products

Although growth prospects for Celgene’s (CELG-$154.44) oncology franchise remain strong, the product portfolio remains highly concentrated. To justify a PE ratio almost twice that of key competitors, the company needs additional revenue streams to offset competitive risks.

Just in 2013, Celgene has invested more than $500 million in third-party ventures – young companies working on promising drugs, ranging from epigenetics (structure-based drug design) to cancer metabolism and immunotherapy. Celgene will owe millions more in milestone payments – should any of these ventures pan out. 

Luckily, the balance sheet is sound, with healthy credit metrics and liquidity available to finance both internal R&D expense and external ventures. The company holds a revolving credit facility totaling some $1.5 billion and its long-term debt maturities are staggered, with the bulk of maturities scheduled out to 2017 and beyond.  

Read more at YCharts: Celgene’s Revlimid: Sales to $8B? Patent to 2023?

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.  

Roche Holding More than Oncology Franchise

Notwithstanding safety concerns and narrow therapeutic labeling, Roche Holding’s (RHHBY-$69.63) rheumatoid arthritis treatment Actmera has still managed to show respectable sequential growth: January – September 2013 sales grew 33% to 763 million Swiss francs ($826.9 million), likely due to study results presented last year showing Actemra was more effective than Humira as monotherapy in reducing common disease-activity endpoints of RA (e.g. reduction in tenderness and swollen joints) in those sufferers who couldn’t take methotrexate, the standard-of-care in most newly-diagnosed patients.

Recent events suggest that estimated peak annual sales of $1.1 billion in 2017 could prove conservative, too.

Read more at YCharts: New Player in the $18B Market for Arthritis Drugs?

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.  

Managing Weight-Loss Expectations at Arena Pharmaceuticals

The current market potential for Arena Pharmaceuticals’ (ARNA-$4.39) weight-loss drug Belviq here in the U.S. is approximately $1.0 billion – or about $315 million net to Arena.

Such bullish estimates, however, assume two variables not within current reach: (1) Add-on therapy for phentermine; and (2) broad reimbursement coverage by commercial and Medicare plans.

In a recent press release, Arena boasted that “Belviq is now covered by several prominent health plans and PBMs, including, among others, Express Scripts (including its legacy Express Scripts and Medco operations), Tufts, Health Alliance Plan, Excellus BCBS, Highmark BCBS, BCBS of Michigan, and BCBS of North Carolina and Healthnet (California).”

Jack Lief, co-founder and CEO of Arena, told analysts on the second-quarter conference call, too, that “as much as 50% [of insurance plans]” would likely reimburse for Belviq prescriptions by April 2014. Recent channel checks suggest that this statement is inaccurate at best, misleading at worst.

Read more at YCharts: How Arena’s “$3 Billion” Belviq Withered

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.