With the majority of multinational corporations (MNCs) completing Q3 financial reporting in recent days, GBI reviews key highlights including details of both global and China market performance trends. MSD gains on unquenched demand for Keytruda, GardasilAlthough attracting fewer headlines of late than the anti-obesity drug makers, US-based major Merck, Sharp & Dohme (MSD; NYSE: MRK) is enjoying a storming year in performance terms. In Q3’23, global sales were up 9% year-on-year (YOY) in constant currency terms (as per all subsequent growth figures) to USD 15.9 billion over the three months, while the forecast for annual sales was raised to USD 59.7 billion - USD 60.2 billion. The programmed death-1 (PD-1) blockbuster Keytruda (pembrolizumab) continues to dominate the immunotherapy field, growing 17% in Q3 to USD 6.33 billion, and earning over USD 18.4 billion year-to-date, driven by growing use in earlier cancer stages such as triple-negative breast cancer and renal cell carcinoma. With Keytruda’s patent set to expire in 2028, MSD is expanding the drug’s indications relentlessly, recently securing highly lucrative nods for use as a neoadjuvant and adjuvant treatment (alongside surgery) in non-small cell lung cancer (NSCLC). Other key performers for MSD are the Gardasil family of human papillomavirus (HPV) vaccines, with global sales up by 16% to USD 2.59 billion during Q3. The China market is the key global driver for Gardasil. In January 2023, local distribution partner Chongqing Zhifei Biological extended their existing partnership until 2026, committing to purchase at least RMB 100 billion (USD 14.8 billion) worth of Gardasil and other MSD vaccines during that time. Boosted by Gardasil, MSD became the leading MNC firm in the China market earlier this year, and maintained momentum in Q3, with China sales up 18% YOY to USD 1.67 billion. There was also a pleasant surprise for MSD in Japan, where sales of COVID-19 therapy Lagevrio (molnupiravir) surged by 51% to USD 640 million, meaning Japan was MSD’s fastest growing market during the quarter with 63% expansion to USD 1.06 billion in revenues. Commitment to Kelun confirmed following Daiichi deal: MSD added to its pipeline during the quarter via the potential USD 22 billion collaboration with Daiichi Sankyo for co-development and commercial rights to three antibody drug conjugate (ADC) candidates: the HER3-targeted patritumab deruxtecan, the B7-H3-targeted ifinatamab deruxtecan, and the CDH6-targeted raludotatug deruxtecan. Within days of that announcement, MSD withdrew from development of two preclinical candidates previously licensed to MSD from China’s Sichuan Kelun Pharmaceutical Co., Ltd in deals signed during 2022. Nevertheless, during the earnings conference call MSD Research Labs president Dr. Dean Li noted that “the Daiichi Sankyo collaboration complements our important, ongoing alliance with Kelun Biotech”. Development of the lead TROP2 candidate licensed from Kelun, MK-2870 (SKB-264) continues, with Phase II data presented at ESMO for the ADC in patients with previously treated metastatic, hormone receptor positive, HER2 negative breast cancer, generating an objective response rate of 36.8%. That adds to existing positive data for MK-2870 in both triple-negative breast and non-small cell lung cancer. MSD reportedly aims to initiate larger studies for MK-2870 starting with NSCLC and expanding into additional tumor types, while clinical development of another Kelun-licensed molecule, the Claudin18.2-targeted MK-1200, is also set to get under way.Lilly and Novo still in early stages of GLP-1 market growthNow the world’s first and second largest pharmaceutical companies by market capitalization thanks to being the leaders in development of GLP-1 weight-loss drugs, Eli Lilly & Co., (NYSE: LLY) and Novo Nordisk (CPH: NOVO-B) continued to reap the obesity harvest.Lilly’s sales were up 36% year-on-year (YOY) to USD 9.5 billion, while excluding a USD 1.42 billion one-off payment from the sale of the schizophrenia drug Zyprexa (olanzapine) to Germany’s Chelapharm and COVID-19-related antibody sales made in 2022, underlying sales still grew by 24% YOY. Lilly’s obesity drug Mounjaro (tirzepatide) smashed to USD 1.4 billion in sales in Q3, USD 1.28 billion of those earned in the United States. Other key performers for Lilly include the CDK4/6 breast cancer drug Verzenio (abemaciclib), up 68% YOY in Q3 to just over USD 1 billion, and auto-immune disease drug Taltz (ixekizumab), which made USD 744 million and grew at 9% YOY.Novo Nordisk is on an even stronger trajectory, with sales up 38% YOY to USD 8.3 billion. The firm raised its guidance for the full-year 2023, with sales growth now expected to be between 32% and 38% at CER (from 27%-33% forecast in Q2). Novo has two obesity drugs, Wegovy (semaglutide) and Saxenda (liraglutide), combined sales of which jumped 200% during Q3 to USD 1.74 billion, again with the US market responsible for around 50% of sales. Meanwhile, the diabetes formulation of semaglutide, Ozempic, saw 50% growth in sales to USD 3.39 billion. Notably, Novo’s total insulin sales declined -5% YOY, eclipsed by the alternative type 2 diabetes drugs now available.Both Lilly and Novo Nordisk are expected to be just scratching the surface of the potential marketplace for anti-obesity drugs, with the US market in particular a gold mine. Forecasts range from around USD 40 billion by 2030, to Goldman Sachs’ recent forecast for a USD 100 billion total market size by 2030, or a 16-time expansion from the USD 6 billion market earlier this year.1 That’s based on World Obesity Atlas data that predicts over 50% of the world’s population will be ‘obese’ by 2035, from 38% in 2020, and predicated on around 15 million patients in the US alone regularly taking anti-obesity drugs.Aiming to match MSD’s success as the dominant player in the PD-(L)1 field, Novo Nordisk and Lilly are now competing to expand the market footprint for their GLP-1 drugs. The Danish giant in particular has been making headway. In August, Novo released data showing that Wegovy reduced risk of cardiovascular events in the obese by 20%, and in October a study assessing semaglutide’s ability to slow the progress of chronic kidney disease and reduce cardiovascular events was ended early due to strong signs of efficacy. Other developments to look out for include Novo’s oral formulation of semaglutide, scheduled to complete Phase III studies in March 2024. A slew of new players will be joining the market in 2024. Notably, Innovent Biologics is among the front-runners with mazdutide, a dual GLP-1/glucagon receptor agonist discovered by Lilly but now being accelerated to market by the Chinese partner, with Phase III results set to be available in January 2024.Pfizer banking on Seagen’s ADCsto compensate COVID lossesSuffering from the collapse of COVID-19-related revenues, Pfizer Inc., (NYSE: PFE) reported a -41% drop in Q3 revenues to USD 13.2 billion. The US giant was in the red for the first time since 2019, reporting a net loss of USD 2.38 billion following a USD 5.7 billion write-off of COVID-19 product inventory due to the US government’s cancellation of orders for COVID therapy Paxlovid originally scheduled for Q4’23 delivery.On the positive side, excluding the impact of COVID-19-related sales, Pfizer’s other products contributed 10% YOY growth, and the company’s leadership are satisfied that the target for full-year non-COVID revenue growth of 6%-8% should be met this year. The huge windfall accrued from sales of Paxlovid and the BioNTech partnered COVID vaccine – estimated by GBI at over USD 90 billion over the last two years – are being put to work in acquiring companies to restock the pipeline. Pfizer’s 2022 acquisitions of BioHaven and Global Blood Therapeutics (GBT) are already paying off, with BioHaven’s migraine drug Nurtec ODT/Vydura (rimegepant) generating USD 233 million in sales, and GBT’s sickle cell disease drug Oxbryta (voxelotor) making USD 85 million in Q3’23.The most significant of Pfizer’s recent deals, the USD 43 billion purchase of antibody drug conjugate (ADC) specialist Seagen Inc., (Nasdaq: SGEN), was announced in March this year, and moved closer to completion in October with unconditional approval from the European Commission. CEO Albert Bourla noted “we continue to expect the transaction to close in late 2023 or early 2024”, with approval from the US Federal Trade Commission (FTC) still awaited. Responsible for 3 of the 12 ADCs currently approved in the US, Seagen is forecast to provide at least USD 10 billion in annual revenues by 2030 to Pfizer.Pipeline and workforce cutsWith this year’s forecast for annual sales cut by USD 9 billion, the strains Pfizer is now under as it aims to reposition itself post-COVID was reflected in the launch of a ‘cost realignment program’, with the aim to achieve at least USD 3.5 billion in net cost savings by the end of 2024. Several hundred jobs are being immediately cut at a plant in Michigan, alongside the planned closure of a New Jersey facility. The Q3 pipeline also included details of five drug programs that have been discontinued. Sanofi's China sales dip -2.5% due to VBPFrench major Sanofi SA (Nasdaq: SNY)’s reported sales growth at 3.2% to EUR 11.96 billion (USD 12.64 billion), but issued a downgrade to its 2024 earnings per share forecast – now expected to fall by low-single digits – and scrapped its profit target for 2025. That reflected a major shakeup in the corporate strategy, with more spending to be directed towards innovative drug R&D, while the consumer healthcare (CHC) business unit is set to be spun-off independently. The earliest the spinoff could take place is Q4 2024. The market reacted badly to the developments, with around USD 20 billion wiped off the value of Sanofi’s shares.Sanofi’s overall business is being driven by its vaccines portfolio and the anti-allergy drug Dupixent (dupilumab), while there was recently a strong launch for hemophilia therapy ALTUVIIIO (recombinant Factor VIII). Dupixent sales continue to expand at pace, up 32.9% YOY during the quarter to EUR 2.85 billion (USD 3.01 billion).Sanofi, along with the likes of Organon and Bayer, is among several MNCs who are now suffering in China due to the volume-based procurement (VBP) program. The firm’s China sales fell -2.5% YOY during Q3’23 to EUR 728 million, and were down -3.8% over the 9-month year-to-date period to EUR 2.268 billion. In China, Dupixent, anti-cholesterol drug Praluent (alirocumab), and blood thinner Plavix (clopidogrel) are the key performers, while the VBP program weighs heavily on other parts of the portfolio, with Lantus (insulin glargine), deep-vein thrombosis prophylactic Lovenox, and high blood pressure therapy Aprovel (irbesartan) seeing sales shrinkage.Reference1. https://www.goldmansachs.com/intelligence/pages/anti-obesity-drug-market.html近期报告GBI Drug Report | Products Update & Review (2023.08)The Obesity Drug Market Boom and Development TrendsH1'23 MNCs Performance in China Market and Policy HighlightsFuture! Untapped potential of galectins’ role in human disease?