Covid-19 impact report on Biotech

BIOTECH REPORT

A first look at Covid-19 impacts


-> Accurately measuring the impacts of the prevailing economic crisis is of course somewhat premature.

-> That said, and barring new developments in coming weeks, we can nevertheless consider that the healthcare sector should be one of the least affected of all. Indeed, large cap pharmaceuticals and diagnostics companies could well rank among the stocks to buy as we move towards the late stages of the Covid-19 impact.

-> Here we try to address a slightly different objective. Across the different activities that healthcare companies are conducting, clinical and regulatory affairs seem to be more affected than others. A kind of unanimous statement seems to be saying that new trial starts are postponed but also that patient recruitment for trials has become more difficult while follow-up of patients might also be negatively affected. On the other hand, although regulatory agencies have sent reassuring messages to say that the review of medicines would not be impacted by the current situation, we have seen AdCom cancellations and doubt that inspections of manufacturing or R&D sites can take place normally at present.

-> When the two topics are considered, we estimate that the biotech sector is far more likely to feel the impacts than others and it is unsurprising to see it has already suffered more adversely on the markets. As such, our objective here is to navigate through the sector and discuss the various situations.

-> In the end, we come up with a selection of two favourite names for an offensive play and two for a defensive play: Innate Pharma and Genfit on the one hand, Genmab and Galapagos on the other hand. All four are Buy ratings and harbour significant upside to their respective FVs.

Analyst: Team Healthcare