The industry's brightest hopes: where are they now?

Date April 03, 2013

No matter how detailed sellside models are, most analysts will admit that forecasting revenue for an unlaunched drug often comes down to putting a finger in the air, even before you consider the conflicts of interests that can result in expectations departing from reality.

Indeed, a look at EvaluatePharma’s archived consensus data for the industry’s brightest hopes of the past five years reveals some remarkable misses, but it also shows that analysts can on occasion be pretty spot on (see tables below). The accuracy of forecasts is particularly pertinent given last week’s US approval of Biogen Idec’s Tecfidera, and consensus data suggesting that this drug’s sales could reach $3.7bn within five years.

Tecfidera represents the third leg of Biogen’s multiple sclerosis franchise, and has just been priced at $55,000 per patient per year – a discount to Novartis’s Gilenya, but more than some key opinion leaders had suggested was a level that would not risk damping down demand (Tecfidera hits the ground running with FDA thumbs up, March 28, 2013).

In any case the stage is now set for an aggressive battle against the other oral MS agents, which also include Sanofi’s Aubagio, and with Tecfidera being the biggest drug launch of 2013 by forecast sales there is clearly plenty to play for.

Historic brightest launch prospects 
Year  Top biotech product  Top conventional product  EP Vantage story link 
2008  Actemra  Pradaxa  Which of this year's launches will be future blockbusters? 
2009  Prolia  alogliptin  Which of 2009's launches will be future blockbusters? 
2010  Prolia  Byetta  Which of 2010's launches will be future blockbusters? 
2011  Benlysta  Telaprevir  Which of 2011's launches will be future blockbusters? 
2012  Tresiba + Ryzodeg  Vascepa  Which of 2012's launches will be future blockbusters? 
2013  Kadcyla  Tecfidera  Which of 2013's launches will become blockbusters? 

But what are the chances of it – or any other forecast blockbuster, for that matter – meeting lofty expectations? In an attempt to gauge the accuracy of consensus forecasts EP Vantage has looked at all the past five years’ forecast blockbuster or near-blockbuster drug launches, which we have defined as those with at least $800m in expected sales.

Where available, the forecast revenue has then been compared with the actual sales achieved in the period specified; if the forecast related to a point still in the future it has been compared with the current expectations for that future period, which will logically have been adjusted based on the drug’s early market performance.

The results are startling – even after excluding abandoned late-stage projects like AstraZeneca’s Rezeid and Certriad, withdrawn drugs such as Merck & Co’s Tredaptive and those, like Basilea’s ceftobiprole, which have suffered protracted delays that as of today have kept them off the market.

The table of duds is led by Pfizer’s one-time opioid-related constipation drug Relistor and InterMune’s expensive idiopathic pulmonary fibrosis treatment Esbriet. The former was a drug inherited from Wyeth that has since been divested, while the latter has struggled with reimbursement.

The past five years' blockbuster duds...  
Product  Forecast made for  Revenue forecast ($m)  Actual revenue or current forecast ($m)  Difference 
Relistor  2012  865  37  -96% 
Esbriet  2014  917  132  -86% 
Incivek  2016  4,058  669  -84% 
Vascepa  2016  2,042  505  -75% 
Benlysta  2016  2,845  698  -75% 
alogliptin  2014  2,538  788  -69% 
Brilinta  2016  2,527  865  -66% 
Bydureon  2014  1,662  615  -63% 
Qsymia  2016  1,134  437  -61% 
Actemra  2012  2,249  898  -60% 

To be fair, only Vivus’s Qsymia and Amarin’s Vascepa look like clear cases of the tail having wagged the dog, as analysts fought to outdo each other to justify overheated investor expectations that had little basis in fact. Forecasting Glaxo’s Benlysta, meanwhile, was a case of guessing the size of a market – lupus – that had not seen a new entrant for half a century.

Other misses have been prompted by a sea change in treatment, such as Vertex’s Incivek, whose expected failure to capture a massive $3.4bn of previously forecast 2016 revenue will come at the hands of the hepatitis C powerhouse that Gilead has become in its march towards the first all-oral interferon-free regimen.

Outside the top 10 of shame, Dendreon’s Provenge and Amgen’s Xgeva, 46% and 24% off 2014 forecasts respectively, have been hit by a mixture of reimbursement issues and heightened competition in the prostate cancer space.

Safety concerns

Then there are safety concerns, which have dogged the diabetes drugs alogliptin and Bydureon, and more recently Novo Nordisk’s Tresiba and Ryzodeg. Expected 2016 sales for Tresiba and Ryzodeg have shrunk by 43% to $815m in the space of a year.

Such considerations also throw into stark relief Friday’s US approval of Johnson & Johnson’s canagliflozin (Invokana), which has become the first SGLT2 inhibitor to reach the type 2 diabetes market after a long and tortuous journey. The once-touted drug class has documented safety issues, yet Invokana is at present forecast to yield 2018 sales of $835m.

...and those beating bullish forecasts 
Product  Forecast made for  Revenue forecast ($m)  Actual revenue or current forecast ($m)  Difference 
Stribild  2016  842  2,385  183% 
Yervoy  2016  874  1,546  77% 
Perjeta  2016  1,073  1,885  76% 
Complera  2016  853  1,383  62% 
Invega Sustenna  2014  853  1,247  46% 
Victoza  2014  1,772  2,482  40% 
Xeljanz  2016  1,430  1,954  37% 
Kalydeco  2016  982  1,174  20% 
Eliquis  2016  2,287  2,660  16% 
Stelara  2012  995  1,025  3% 

Still, analysts do not always overreach. As the table above shows, consensus can be spot on and is often exceeded.

Clearly, the travails of some in diabetes have benefited Novo’s Victoza, while the big HIV winners have been Gilead's Stribild and Complera. Indeed, Stribild stands as the big outperformer, now expected to add $1.5bn to 2016 forecasts made just 12 months ago.

Elsewhere, Bristol-Myers Squibb’s melanoma antibody Yervoy had a long road to approval but, if updated 2016 forecasts based on its first couple of years on the market are anything to go by, it looks to have been worth it. And Vertex can take some solace in its cystic fibrosis drug Kalydeco, which has drawn some attention away from its waning hep C presence.

While consensus is often a poor indicator of actual performance, it is not always a case of sellsiders driving up forecasts in the knowledge that follow-on business in the form of fund-raisings and M&A could come their banks’ way.

The doomsayers who point to the number of drugs that never meet blockbuster forecasts have to contend with those that outperform, as well as the overlooked products that might sell over $1bn if put in the right hands.

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To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobEPVantage on Twitter

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