2014 in review – Did new drug launches meet expectation and for what pipeline drugs have revenue forecasts grown the most?

There may have been fewer innovative new drugs approved in 2013 versus 2012, but the industry nevertheless delivered to market a catalogue of notable new products last year. The subsequent launch performances for some of these key therapies tell their own story as to how the pharmaceutical market continued to evolve in 2014.

Where else to start but with Gilead Sciences' Sovaldi, the launch of which has revolutionised the treatment of hepatitis C. Approved by the FDA in December 2013, consensus expectations at the beginning of the year were for Sovaldi to generate global sales of around $1.5 billion in 2014.

Current consensus forecasts estimate that Sovaldi will actually generate sales of $11 billion this year, with analysts having vastly underestimated just how many patients would be prescribed the drug in 2014. The broadly held (but ultimately inaccurate) view was that the vast majority of patients who have been treated with Sovaldi during 2014 would be 'warehoused' for Gilead's follow-up compound Harvoni, which was approved a few months ago (Physician Views Poll Results – No wonder payers are concerned; physicians enthused by labelling that allows Gilead Sciences' sofosbuvir/ribavirin combo to be administered to GT1 patients).

The combined Sovaldi/Harvoni franchise is forecast to record sales of around $12 billion next year; greater entrenchment of Sovaldi over the past 12 months may play a critical role in fending off competitive threats over the next few years.

Riding on the coattails of Sovaldi's success, the performance of Johnson & Johnson's own hepatitis C treatment Olysio also heavily exceeded expectations this year; current consensus calls for 2014 full-year sales to reach $2.4 billion versus the $270 million that analysts were modelling at the beginning of the year. The success of Olysio summed up the enthusiasm among physicians for a new generation of hepatitis C therapies, with the vast majority of usage occurring via an expensive combination with Sovaldi, which removed the need to treat some patients with interferon.

Beyond the hepatitis C market there were few upside revenue surprises for key drugs approved in 2013, although Biogen IDEC's Tecfidera (multiple sclerosis), Johnson & Johnson's Invokana (type 2 diabetes) and Imbruvica (chronic lymphocytic leukaemia) were notable exceptions.

Tecfidera enjoyed a stellar initial launch in 2013 which continued into 2014, boosted by high levels of anticipation for the drug among neurologists in the EU and faster than expected uptake in the region despite Biogen's best efforts to caution investors.

Uptake of the SGLT-2 inhibitors has continued to impress over the past 12 months and as the first-in-class agent (in the US market), full-year consensus sales expectations for 2014 increased from $261 million to $572 million, while a strong launch for Imbruvica (and approval in a number of new indications) saw consensus expectations rise from $220 million at the beginning of the year to $485 million currently. In contrast, analysts have scaled back their revenue forecasts for Roche's competing therapy Gazyva.

It is notable that three of the drugs that have exceeded expectations in 2014 are Johnson & Johnson products; a trend which supports the status of the company as one of the most successful in the industry in terms of new drug launches over the past five years (Spotlight On: Johnson & Johnson switching from offense to defence in 2015)

At the other end of the spectrum it was the industry's most prolific regulatory player in 2013 – GlaxoSmithKline – which delivered the most disappointing commercial performance versus analyst expectations. The UK drugmaker secured approval for five new drugs from the FDA in 2013, two of which – Breo Ellipta and Anoro Ellipta – were widely expected to expand its leadership of the chronic obstructive pulmonary disease (COPD) market.

At the beginning of the year, consensus estimates indicated that Breo would generate sales of around $410 million in 2014, but these forecasts have subsequently fallen to a target of $88 million due to a much slower than expected launch. A similar scenario has played out with Anoro, which analysts had expected to generate sales of $324 million, but which is now forecast to reach just $59 million in 2014. Launch performance for both products has significantly impacted longer-term revenue expectations for both the respiratory portfolio and GlaxoSmithKline.

A contributing factor to the weaker-than-expected launches of Breo and Anoro was an increase in pricing pressure within the US respiratory market. GlaxoSmithKline's long established Advair franchise was the victim of more aggressive rebating for AstraZeneca's competing Symbicort brand, a strategy that weakened its formulary positioning and had an impact in 2014 sales. GlaxoSmithKline has said it too will compete more aggressively moving forward, but retention of market share will come at the expense of price, meaning that future sales forecasts for Advair have been notably downgraded by analysts over the past six months.

A similar fate has befallen Sanofi's long-acting insulin Lantus, the price of which has increased frequently and consistently in recent years. The requirement placed on Sanofi earlier this year to dramatically increase the rebates it offers to US payers provided a sudden challenge to the company's growth outlook and contributed to the shock departure of CEO Christopher Viehbacher. Viewed at the start of the year as an $8.4 billion-a-year asset by 2018, current consensus forecasts have shaved some $2 billion from this figure (2014 in review – US drug pricing: Sovaldi the red herring as primary care takes a kicking)

Regarding pipeline compounds for which expectations have grown significantly in 2014, Novartis' heart failure therapy LCZ696 is a notable example. Clinical data released earlier this year was better-than-anticipated and could position Novartis' drug as a paradigm-shifting therapy (ViewPoints: Expectations are high going into this weekend's important data presentation for Novartis' LCZ696). As a result, consensus forecasts for 2018 have grown from around $470 million at the beginning of the year to around $2.4 billion.

Demonstrating how Merck & Co. has appeared to close the gap on Bristol-Myers Squibb in the immuno-oncology race, 2018 sales forecasts for its PD-1 inhibitor have increased from $900 million to $2.5 billion over the past 12 months. Enthusiasm for the PD-1/PD-L1 inhibitors in general has continued to grow with further evidence of activity in multiple solid and haematological cancer types prompting 2018 consensus forecasts for Bristol-Myers Squibb's Opdivo to rise from $2.8 billion to $3.5 billion over the course of the past year. PD-L1 inhibitors being developed by AstraZeneca and Roche – both of which are in slightly earlier stages of overall development – have seen more modest increases in revenue forecasts.

The biggest surprise 'emerging' therapy in 2014 was arguably Intercept's potential NASH therapy OCA, for which positive mid-stage data was released just under a year ago. Current consensus forecasts indicate 2018 sales of around $600 million, but these had swelled to $1.5 billion in mid-2014 (ViewPoints: New questions about Intercept's obeticholic acid not necessarily a boon to competing NASH programmes

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