The idea that anyone could have a problem with Joe Biden’s cancer moonshot is unimaginable. After all, who hasn’t had a friend or relative affected by cancer?
My dad died from a combination of prostate and bone cancer. Now, you could argue that, at 81, old age might have done him in, regardless of the disease eating away at his body. But, the reality is that so many die much younger than my dad from various forms of cancer. It is a scourge to longevity everywhere.
Biden’s cancer moonshot aims to cuts the death rate from cancer in the U.S. by 50% over the next 25 years while improving the experience of those dealing with cancer. I’m 100% for it. I’m sure the drug companies are, too. Forget the old myth that they don’t want to cure cancer. There is a lot of money to be made by eliminating a virus or disease.
Who are the companies developing the best cancer moonshots? Below are three possibilities.
| MRK | Merck & Co | $86.02 |
| NVS | Novartis | $79.58 |
| LLY | Eli Lilly | $301.69 |
Merck & Co. (MRK)
Merck & Co. (NYSE:MRK) reported better-than-expected Q2 revenue and profits thanks to Keytruda, the company’s cancer drug that binds to the PD-1 protein, helping immune cells kill cancer cells. According to the National Cancer Institute, Keytruda can be used by itself or in combination with other drugs to treat certain types of breast cancer, melanoma, colorectal cancer, endometrial cancer and others.
In the second quarter, Keytruda’s sales were $5.3 billion, $400 million higher than analyst estimates. Excluding curreny exchange, sales were 30% higher than Q2 2021. Keytruda was Merck’s best-selling drug in the second quarter, considerably higher than Gardasil, which protects against cervical cancer.
Keytruda was also the fourth-largest drug by sales in 2021 at $17.2 billion, more than $4 billion more than Revlimid, Bristol-Myers Squibb’s (NYSE:BMY) multiple myeloma therapy.
In mid-September, Merck got approval in Canada to use Keytruda for patients 12 and older with stage IIB or IIC melanoma after a surgically removed tumor. I live in Canada. Anything Merck can do to extend a cancer patient’s chance of survival is good by me.
And, if you care about the financials, the company earned an adjusted $1.87 per share in Q2, 20 cents higher than the Zacks consensus estimate.
Novartis (NVS)
In FiercePharma’s list of the top 20 drugs by worldwide sales, I couldn’t help but notice that Novartis’ (NYSE:NVS) generic division, Sandoz, launched a generic version of Revlimid earlier this year in 19 European countries. Sandoz’s Lenalidomide is used for several hematology-oncology conditions. It does have serious side effects, so it is only available through special distribution programs. The generics maker currently has more than 50 oncology products covering various cancers, though.
In late August, Novartis announced that it intends to separate Sandoz from the company, making it an independent publicly traded generics drug company. It would be Europe’s largest generics company. Sandoz will trade on the SIX Swiss Exchange with an American Depositary Receipt available in the U.S.
Like many spinoffs, Novartis argues that the separation of Sandoz allows both companies to focus on their core businesses, providing greater value to shareholders.
For the second quarter, Sandoz reported $2.32 billion in sales, 5% higher than a year earlier, excluding currency effects. The division’s core operating income was $473 million, or 20.4% of sales.
As governments negotiate for better drug prices, generics will likely continue to see healthy growth, which should be very good for Sandoz’s business. So, keep an eye out for the ADR to begin trading, and in the meantime, perhaps consider shares of NVS.
Eli Lilly (LLY)
Last on our list of cancer moonshots is Eli Lilly (NYSE:LLY), which offers Verzenio, a drug to treat early breast cancer.
Verzenio can’t hold a candle to Eli Lilly’s best-selling drug, Trulicity for type 2 diabetes, which generated $1.91 billion in the second quarter. That was more than three times Verzenio’s Q2 sales. But they did increase by 72% year over year to $589 million, making it one of Eli Lilly’s top 10 growth products. And Verzenio should easily hit $2 billion in annual sales this year.
As a result of Verzenio’s growth, Pfizer’s (NYSE:PFE) breast cancer blockbuster Ibrance is losing market share. Launched in 2015, Ibrance sales have stalled, largely due to competition from Verzenio and Novartis’ Kisqali, which have both done better in clinical settings, according to FiercePharma contributor Kevin Dunleavy.
I recently recommended LLY stock as one of seven blue-chip stocks to buy for safety in the current market volatility. I liked its ability to convert income to free cash flow. In 2021, it converted a dollar of income into $1.07 free cash flow.
The company has delivered for shareholders over the long haul. Over the past five years, shares have returned 260% compared with a 54% return for the S&P 500. Yielding 1.3%, Eli Lilly is a must if you’re interested in healthcare stocks that deliver the goods.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.