Pfizer Inc and its partner BioNTech SE announced in February that they have applied for full FDA approval of their Omicron-focused COVID-19 vaccine for use both as a primary vaccine and a booster for those 12 years and older.1 Separately, BioNTech SE completed the construction of a facility in Germany that will make a key ingredient in its messenger-RNA vaccines, including those for cancers and infectious diseases like COVID-19. Chancellor Olaf Scholz welcomed the opening of the facility and said Germany needs to support the creation of more such facilities to help develop and launch new drugs and therapies.2
However, Pfizer also announced a 2023 forecast that didn’t meet analysts’ overall expectations. While Pfizer anticipated that it couldn’t match the $100 billion in sales of its COVID-19 vaccine Comirnaty and pill Paxlovid from last year, the post-COVID dip was steeper than expected, leading to the reduced forecast. Pfizer believes demand for its COVID treatment will grow again in 2024, after governments work through the massive stockpile of vaccines they have on hand.3 Likewise, AstraZeneca (held by the Fund) announced it was counting on up to 15 new treatments in cancer, metabolic, and rare disease drugs set to debut over the next decade to make up for the decline in COVID-related sales.4
Elsewhere, researchers from Leiden University have developed a “DNA medication pass” that uses a patient’s DNA profile to enable doctors and pharmacists to identify whether they are likely to benefit from or have adverse reactions to a specific drug, as well as establish the optimal dose for that individual. Publishing their findings in The Lancet, this breakthrough in precision medicine allowed the researchers to achieve a 30% reduction in serious side effects for patients. The pass can be used to custom design treatments across a wide range of diseases and may lead to a more effective and efficient approach to prescribing medicines.5
Company Specific Updates
Bristol Myers Squibb Co.
Bristol Myers Squibb Co. reported better-than-expected Q4 earnings thanks to a smaller-than-expected decline in sales of its cancer drug, Revlimid. This is the first year of generic competition for Revlimid, and the company’s success in growing through the year is seen as a positive sign. The company announced it was counting on newer products, such as its cancer therapies Opdualag and Abecma, to offset the decline in Revlimid sales. Bristol Myers expects to double sales of these more recent offerings in 2023 to about $4 billion YoY.6
Merck & Co Inc
Merck’s new non-small cell lung cancer drug Keytruda was approved by the U.S. Food and Drug Administration as adjuvant treatment following successful results from Phase 3 trial. In collaboration with Moderna, Inc., Merck’s Phase 2b trial of Keytruda in combination with a personalized mRNA therapeutic cancer vaccine showed “a statistically significant and clinically meaningful improvement” in recurrence-free survival for post-surgical patients with stage III/IV melanoma versus Keytruda alone. In addition, Merck has received positive topline results from two other Phase 3 trials for the use of Keytruda against certain kinds of biliary tract and gastroesophageal cancers.7
Investing in Global Healthcare with LIFE ETF
One way to simplify investing in the cutting-edge healthcare industry is through an ETF. Evolve Global Healthcare Enhanced Yield Fund (LIFE ETF) provides investors with exposure to twenty global blue-chip companies in the healthcare industry, with a covered call strategy that is actively managed to provide increased yield potential while helping mitigate risk. For more information about the Evolve Global Healthcare Enhanced Yield Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact us.
LIFE ETF Portfolio Strategy and Activity
For the month, AbbVie Inc. made the largest contribution to the Fund, followed by Stryker Corporation and Novo Nordisk A/S. The largest detractors to performance for the month were Eli Lilly & Co., followed by Roche Holding Ltd., and Abbott Labs.
1 “Pfizer/BioNTech apply for full FDA approval of updated COVID vaccine,” Reuters, February 24, 2023; https://www.reuters.com/business/healthcare-pharmaceuticals/pfizerbiontech-apply-full-approval-updated-covid-vaccine-2023-02-24/
2 Loh, T., “BioNTech Expands German Plant as Scholz Vows to Help Pharma,” Bloomberg, February 2, 2023; https://www.bloomberg.com/news/articles/2023-02-02/biontech-boosts-german-investment-with-expansion-of-vaccine-hub
3 Cattan, N., “Pfizer 2023 Outlook Disappoints as Covid Business Drops Off,” Bloomberg, January 31, 2023; https://www.bloomberg.com/news/articles/2023-01-31/pfizer-forecasts-lower-than-expected-2023-earnings-on-covid-dip
4 Grover, N. and Fick, M., “AstraZeneca goes for growth with new drugs as COVID sales wane,” Reuters, February 9, 2023; https://www.reuters.com/business/healthcare-pharmaceuticals/astrazeneca-q4-revenue-just-shy-analyst-estimates-2023-02-09/
5 Cohen, J., “In Potential Breakthrough, Dutch Study Shows How Use Of a ‘DNA Medication Pass’ Can Significantly Reduce Adverse Events,” Forbes, February 3, 2023; https://www.forbes.com/sites/joshuacohen/2023/02/03/in-potential-breakthrough-dutch-study-shows-how-use-of-a-dna-medication-pass-can-significantly-reduce-adverse-events/
6 Erman, M., “Bristol Myers’ profit beats on better-than-feared Revlimid sales,” Reuters, February 2, 2023; https://www.reuters.com/business/healthcare-pharmaceuticals/bristol-myers-q4-earnings-sag-lower-revlimid-sales-2023-02-02/
7 “Merck Announces Fourth-Quarter and Full-Year 2022 Financial Results,” Merck, February 2, 2023; https://www.merck.com/news/merck-announces-fourth-quarter-and-full-year-2022-financial-results/
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