Ipsen shares fall 3.8% after Bylvay fails rare liver disease trial
Roche Holding’s first-half core operating profit of 11.9 billion Swiss francs beat consensus estimates by 4%, according to Bernstein analysts. The company’s 39% margin was 142 basis points ahead of consensus, Bernstein said, attributing the performance to optimized research-and-development investment and cost savings that reduced selling, general, and administration expenses. Roche also benefited from royalty and milestone payments related to Eli Lilly’s Foundayo obesity pill, which UBS analysts said drove a strong increase in what the company calls “other revenue.” By 2030, UBS noted, Roche expects 5% of group sales to come from other revenue. Despite the beat, Roche reiterated its full-year guidance, with Bernstein saying consensus estimates seem unlikely to change.
CEO Thomas Schinecker addressed the company’s acquisition strategy on a call with analysts, saying Roche does not have its back against the wall to fill its drug pipeline. “We always make very detailed due diligence. We always have material-transfer agreements where we really test the molecules in our own hands…I’ve seen other companies lose a bit of discipline in this space,” Schinecker said. He said Roche is open to doing deals as long as they make financial sense.
Roche also revised its expectations for its eye drug Vabysmo, saying it no longer expects sales growth to rebound in the U.S. this year. The company now expects U.S. growth of a mid-single-digit percentage, with double-digit growth outside the U.S., according to UBS analysts. “There may be some concern about the revised expectation for Vabysmo’s growth trajectory in the U.S. but the company does still expect [about 6 billion Swiss francs] peak sales,” the analysts said. Roche shares rose 2.1% on the day.
Ipsen’s stock fell 3.8% after the company said Bylvay failed to meet the primary goal in a late-stage clinical trial for biliary atresia, a rare liver disease. RBC Capital Markets analyst Harry Sephton said in a note the news is a small negative for the French drugmaker, which had viewed the trial as a high-risk event. Biliary atresia likely accounted for half of Ipsen’s 700 million-euro peak sales estimate for Bylvay, but RBC said the indication probably represented a small proportion of consensus forecasts of 420 million euros for the drug’s 2032 sales. Ipsen executives had previously flagged a high hurdle for approval in this disease, the analysts said.
UBS maintained its buy rating on CSL with a target price of 158.00 Australian dollars, but analysts said they see little scope for profit growth in fiscal 2027. The analysts told clients they don’t think competitive conditions have improved in major markets since CSL cut its guidance for the most recent fiscal year ended June 30. They said this will likely inform a cautious approach to fiscal 2027 guidance, though they are hopeful the Australian biopharma will have some new contract wins to report at next month’s annual result announcement. UBS’s current expectation is for flat underlying profit in fiscal 2027. CSL shares traded at A$115.75 ahead of the open.