Having weathered many challenges in Q2 2020, biopharmaceutical firms, by and large, presented a case for optimism during Q3 2020 earnings calls. However, alongside this optimistic outlook were a number of voices expressing concern around the impact of the current surge in COVID-19 cases.

Efforts to adapt commercial strategies to better fit the shifting environment were frequently cited as drivers of a Q3 rebound.

During Q2 earnings calls, companies spoke to the efforts being undertaken to more effectively promote products virtually and to reductions in SG&A expenses (see our analysis of Q2 earnings). During recent Q3 earnings presentations companies (for example, Sunovion and Alkermes) indicated that COVID-19 had resulted in less of an impact than anticipated in their previous outlook statements.

Many companies attributed Q3 success in part to the prudence of strategic endeavours initiated earlier in the year. Among these strategic pandemic-mitigating endeavours, the expansion of digital promotion capabilities and reprioritization of hybrid approaches to sales were frequently cited as keys to Q3 recovery. On the whole, Q3 saw firms better adapting to a virtual promotion environment and accelerating digital promotion strategies. GSK reflected on this shift, noting “strong acceleration of our digital capabilities as well as increased face-to-face engagement where possible…We've taken the opportunity presented by the new ways of working to amplify our digital presence, complementing more traditional approaches very successfully.”

Companies launching brands in Q3 also emphasized beginning with an adaptive and integrated strategy, necessitated by pandemic market conditions. For example, Sunovion employed a hybrid approach with their October launch of KYNMOBI (apomorphine HCl), where they introduced the product via both in-person and online efforts.

Renewed prioritization of direct-to-consumer efforts also emerged as part of the Q3 recovery. Eli Lilly and BMS ramped up investment in their direct-to-consumer capabilities, reflected in an 11% increase in SG&A and one-time ~$7 billion expense, respectively. AbbVie attributed encouraging new patient starts and market expansion to their direct-to-consumer investment, while Amgen described direct-to-consumer activity (e.g., television advertising) as a way to offset disruption in patient behavior due to COVID-19.

In addition to updated commercial strategies, positive shifts in the market environment also contributed to recovery.

The return of elective procedures/initiations was one such factor that played a key role in producing more optimistic forecasts. In light of these circumstances, Otsuka and Roche reverted to their earlier (original) forecast estimates. Similarly, J&J indicated that the medical device industry experienced greater stability in Q3 2020, positively impacting the company’s guidance.

Increasing HCP-patient interaction rates were another dynamic reported in many Q3 earnings presentations, with direct impacts on new patient diagnosis and new patient prescription starts. In the immunology and antiviral markets, Gilead and GSK both indicated an upward trend, with Gilead leadership noting that synergies exist between the two markets. Other companies noting a rebound in patient access to HCPs include Amgen, Eli Lilly, and Otsuka.

Still, concerns remain in the market, with other companies (e.g., Daiichi Sankyo and Puma Biotechnology) revising their forecasts down. Merck, Mylan, and Pfizer cited that wellness and back-to-school visits remain substantially below pre-pandemic levels, affecting long-term outlook for vaccines and similar products. Multiple companies noted that patient volumes, and thus product revenues, remain relatively depressed in the oncology market.

Despite positive indicators, a number of voices of caution emerged ahead of the winter season.

As COVID-19 case volumes surged across the country, some companies sought to remind stakeholders that the road ahead remained uncertain. Novo Nordisk was one such voice warning of an uncertain winter season, despite citing recovery in Q3 and expected continued recovery in Q4. Similarly, Agios tempered expectations around access to healthcare professionals given the potential resumption and/or increase of COVID-19-related restrictions.

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