When Eli Lilly won emergency use authorization for its COVID-19 antibody drug, bamlanivimab, earlier this week, beating Regeneron to the finish line in a closely watched race, it was viewed as both good news and bad news.
Now that Wall Street analysts have had a couple of days to digest the approval, some have concluded the bad news may outweigh the good—for both Lilly and Regeneron.
That’s because bamlanivimab’s label limits its use to non-hospitalized patients who are deemed to be at risk of developing severe COVID-19. What’s more, the label warns that the drug may actually worsen outcomes in hospitalized patients who need oxygen or ventilation.
“This suggests that such cautionary language may be applied to all antibodies for the disease, and thus would limit [Regeneron’s] antibody to a similar patient population and cautionary language,” said analysts at SVB Leerink in a note to investors.
Then there’s the confusion issue. Lilly’s label mentions no benefit from bamlanivimab in reducing mortality from COVID, saying only that the antibody treatment reduces hospitalization or emergency-room visits in the 28 days after treatment.
“Physicians are likely to wonder how to define who might be at risk of hospitalization, since the individuals who go to the hospital are frequently difficult to predict,” SVB Leerink wrote. “On the other side of the indication, to be eligible you can’t be too sick, or in need of supplemental oxygen or hospital care, because then you are too advanced, and may not benefit or may suffer harm from the medicine. We expect this limited indication to be highly confusing,” they groused.
SVB Leerink slashed its estimate of the extent to which antibody treatments would be used in hospitalized patients on ventilation from 55% to zero and non-ventilated patients from 75% to 30%.
For Regeneron, that means sales of its antibody treatment would peak next year at $1.3 billion, SVB Leerink predicted, lowering its previous peak sales estimate of $1.8 billion. Sales would fall every year after that, coming in at just $473 million in 2024, they predicted.
Analysts at Cantor Fitzgerald noted that Lilly will distribute bamlanivimab under a U.S. government program, receiving $375 million for the first 300,000 doses. The company said it would manufacture 1 million doses by the end of the year, and if they all sell, that would total $875 million.
Still, Lilly itself said during its third-quarter earnings call that for the company to hit the high end of its 2020 revenue guidance range of $23.7 billion to $24.2 billion, it “would likely require the inclusion of moderate revenue from potential COVID-19 treatments,” Cantor Fitzgerald wrote in a note to investors. The initial shipment may cover that, but any upside to the guidance would depend on demand for the additional 700,000 doses.
Bernstein analysts estimated in October that the total market for anti-COVID antibodies would hit $3 billion worldwide next year. At the time, they estimated Regeneron and Lilly would split that market, but overall sales would fall quickly to $806 million in 2021.
Of course, the elephant in the room for any company working on drugs to treat COVID-19 is the expected onslaught of vaccines, starting with Pfizer’s. Its announcement of 90% efficacy in early results from the phase 3 trial of its mRNA vaccine raised hopes for an end to the pandemic and lifted stock markets around the world.
But it also raised concerns among analysts covering companies that are working on drugs to treat COVID-19. Analysts at Barclays said in a note that the world would still need treatments for the disease after vaccines hit the market, but that Pfizer’s positive data “should raise further questions around the mid-to-long-term durability of those revenue streams.”
For SVB Leerink analysts, the prospect of a quick emergency authorization for Pfizer’s vaccine prompted a prediction that the product would bring in sales of $258 million in the fourth quarter of this year and $4.6 billion next year. “We believe this strong data should boost confidence of the general public in COVID vaccines, which should drive up the early adoption rate,” they said.