The COVID Effect: Q2 Was Tough, Q3 Is Looking Up

Ophthalmology drugs, particularly drugs associated with surgeries and retinal disease, took a beating in Q2 because of COVID-19 disruptions. Things may be looking up for the current quarter.

During a quarterly sales call, Swiss pharma company Roche, parent of Genentech, reported sales of Lucentis (ranibizumab), declined 19% during Q2. Disruptions in hospitals and ophthalmology practices, as well as patients deciding to postpone treatment, all factored into the drop.

Roche isn’t alone in its suffering. Sales of Regeneron’s Eylea (aflibercept) were down $46 million in Q2 ($1.114 billion) compared with Q2 2019 ($1.160 billion). Bausch Health reported a net loss of $326 million in Q2: Sales were down 23% compared with Q2 2019, according to the company’s earnings report. On the same day it reported Q2 earnings, Bausch also announced plans to spin off its eye health business into an independent publicly traded company.

“Generally, ophthalmology drugs have seen a decline across the board,” said Udit Patel, an executive director in the healthcare investment banking group at Piper Sandler. “Prescription drugs that can be refilled without a doctor’s visit have seen a lesser impact than those administered by an injection, where a patient has to go to a hospital or specialist’s office.”

For most of Q2, ophthalmology practices closed shop or limited in-clinic visits to urgent or emergency situations. While telehealth has helped bring back some patients, the overall slowdown in appointments has a wider influence. Fewer new patients, new diagnoses, and new prescriptions, as well as shaky consumer confidence, have all negatively impacted drug sales.

“We don’t know when consumers will feel comfortable going to their ophthalmologists and optometrists again,” Patel said. “Optometrists write more dry eye prescriptions than any other specialist. Unlike other therapeutic areas, because of the diversity in ophthalmologic treatments – drugs, devices, surgical interventions – COVID is having a broader impact.”

The age range of eye disease patients also plays a role. Conditions such as age-related macular degeneration (AMD), cataracts, and glaucoma tend to affect adults age 50 and over, which means a greater percentage of patients at higher risk for COVID-19. With a patient population less likely to visit a hospital or specialist for treatment, the pandemic has had a more significant impact on ophthalmology than other therapeutic areas where diseases are life-altering but not life-threatening.

An analysis from Strata Decision Technology found that ophthalmology lost more patient volume than any other medical specialty due to COVID-19. Analyzing data from more than 2 million patients, the report found glaucoma surgeries declined 88%, while cataract surgeries dropped 97% during the week of March 22, 2020, compared with the same period in 2019.

Beovu Safety Risks Impact Novartis Sales
Novartis had an especially tough spring/summer. It holds the ex-US franchise for Lucentis, so it took that hit during Q2. On top of that, its new wet AMD treatment, Beovu (brolucizumab), underperformed because of reports of retinal vasculitis and retinal vascular occlusion, possibly resulting in severe vision loss.

Novartis responded quickly, however. The company created an independent safety review committee, initiated a global safety label update, and convened a panel of 100 medical experts to evaluate the root cause of the safety concerns. Patel says sentiment is “mixed” on Beovu’s long-term potential.

Future Outlook
Patel said Q2 represents the trough of 2020. He and other analysts expect the market to improve, leading to either a flat or slightly down year overall. With elective surgeries resuming, pharmaceuticals tied to surgeries and medical device sales have picked up, while prescription-based treatments are recovering more gradually.

Optometrists and ophthalmologists are also falling in line with other specialties’ rapid adoption of telemedicine as a way to safely diagnose and treat non-emergency conditions. “There’s a shift in the thought process,” said Patel. “Physicians are thinking about at-home monitoring and device companies are considering at-home diagnostic tools that allow patients to monitor themselves on a more frequent basis. We have to consider new ways to make patients’ lives easier and help physicians optimize interventions.”