CRSP - Lilly Vertex top pharma performers in H1; Moderna Pfizer the worst

2023-07-01 16:00:00 ET

Buoyed by booming sales of its diabetes drugs, Eli Lilly ( NYSE: LLY ) was the best performing large pharma or biotech in H1 2023, returning an impressive 28% .

Coming in second, Vertex Pharmaceuticals ( VRTX ), helped by continued strong revenue from its cystic fibrosis portfolio, returned ~23% .

In third, Denmark-based Novo Nordisk ( NVS ), which is focused on diabetes treatments, was up ~18% .

In the first half of the year, the Dow Jones Industrial Average ( DJI ) finished up ~4% , the S&P 500 ( SPX ) is up ~16% , the Nasdaq ( COMP.IND ) is up ~33% .

Rounding out the top 5 performing pharmas and biotech in H1 2023 were Sanofi ( SNY ) and Biogen ( BIIB ).

Lilly's ( LLY ) strong 2023 is the result of continued strong sales of its diabetes portfolio, including its newest treatment, Mounjaro (tirzepatide), which had $568.5M in sales in Q1 alone. Sales of the company's best selling drug, the diabetes medication Trulicity, rose 14% year over year to ~$1.98B in the quarter.

Lilly is poised for further gains in the second half. Besides a possible indication for Mounjaro as a weight loss treatment , it could also see approval of donanemab for Alzheimer's disease by the end of the year .

The pharma also reported on June 26 strong results for its newest weight loss candidate, retatrutide .

Vertex's ( VRTX ) success is the result of its cystic fibrosis portfolio, which dominates the market for that disease. Its best-selling therapy for the condition, Trikafta (elexacaftor/tezacaftor/ivacaftor and ivacaftor), also known as Kaftrio in the EU, achieved ~$2.1B in sales in Q1, a 19% increase from the year-ago period .

While the company CF medicines are certainly growth drivers, Vertex ( VRTX ) isn't resting on its laurels. A phase 3 study on VX-548 for the treatment of acute pain is expected to complete by the end of the year and its partnership with CRISPR Therapeutics ( CRSP ) for gene therapy exa-cel for sickle cell disease and transfusion-dependent beta-thalassemia could also reap dividends in the near future.

Novo Nordisk ( NVO ), like Lilly ( LLY ), can attribute their good fortune to sales in its diabetes franchise. However, Novo ( NVO ) has another drug that has aided their success so far this year, the approved weight loss therapy Wegovy (semaglutide).

In Q1, Wegovy had sales of ~DKK4.6B (~$668.7M), representing 225% growth from Q1 2022.

On the other end of the spectrum, Moderna ( NASDAQ: MRNA ) and Pfizer ( NYSE: PFE ), among the best performing stocks of 2022 and 2021 due to the COVID-19 pandemic, are at the bottom of the pharma pack in the first half, down, respectively, ~32% and ~28% .

Four out of the five worst performing pharma and biotech stocks of the first half of the year had significant investments in COVID-related vaccines or therapies. Coming in at No. 3 worst performer is Pfizer ( PFE ) COVID vaccine partner BioNTech ( BNTX ), down ~27% , while Novavax ( NVAX ), also known for its COVID shot, off ~24%, was the fifth worst performing pharma or b iotech.

Despite its poor first half performance, UBS recently upgraded Moderna ( MRNA ) to buy citing its underappreciated pipeline . Meanwhile, Credit Suisse recently cut Pfizer ( PFE ) to neutral noting limited pipeline catalysts . However, Seeking Alpha contributor Nathan Aisenstadt recently argued that Pfizer's ( PFE ) future is bright given drug and vaccine approvals received in 2023 so far .

Organon ( NYSE: OGN ) came in as the No. 4 worst performer, down ~26% , as its Q1 results left a lot to be desired . However, things might improve for the Merck spinoff following its recent launch of a Humira biosimilar .

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