reports
- Dominic Rose
- Naresh Chouhan
Sartorius Stedim - More Downside to Come (SELL, TP EUR150 [165], 9 pgs...
The capitulation may be upon us. The order book continues to show weakness & contrary to the befuddling Q423 sales strength, equipment sales look likely to stay weak as CDMO’s reduce CAPEX after 3yrs of turbo charged growth. We now question the trend growth rate as we believe that market share gains will be minimal, CDMO CAPEX will recover very slowly & M&A is unlikely to contribute as much as it did in the past. Moreover, we expect DIM to add significant capacity in the coming 24mths, which is ...
- Dominic Rose
- Naresh Chouhan
AZN - Upgrade to BUY (TP £125 [£115], 16 pgs)
Having been neutral on AZN since Feb ‘23 based on what we believed to be a lack of catalysts & over optimistic consensus forecasts, we show that most of the EPS downgrades are in no’s & the catalyst outlook is transformed. Our deep dive on the pipeline leads us to upgrade our 2029 sales by $8bn, giving us 5% CAGR sales growth 2024-29 and 9% EPS CAGR. We conducted deep research into 6 key drugs which drive the bulk of our 7% above consensus 2029 sales forecasts. The biggest impediments to AZN sha...
- Dominic Rose
- Naresh Chouhan
Novo - Wegovy Stockpiling Almost $5bn (BUY, TP DKK1100, 5 pgs)
Our latest analysis shows that Novo could drive material consensus upgrades by starting to release a potential ~$5bn Wegovy stockpile. With Novo restricting Wegovy supply between Nov-21 & Dec-22, and then from May-23 onwards, they have built up a substantial stockpile of product, in our view. Our analysis of their inventory shows there is likely as much as $5bn of finished or close-to-finished Wegovy product at current US net prices. Our analysis of the supply chain and distribution strategy exp...
- Dominic Rose
- Naresh Chouhan
Ironwood - STARS To Fuel Apraglutide Launch (TP $22, 13 pgs)
Despite the share price reaction to the STARS readout, having contemplated it in detail, we have formed the view that it is a very solid dataset which Ironwood can use to effectively launch apraglutide in SBS-IF. We see its 1x weekly profile and strong 2x benefit vs placebo on PS reduction as being very competitive vs market leader Gattex and show that concerns on the secondary endpoints miss are overplayed given the high level of placebo response caused by the new weaning algorithm. We expect t...
- Dominic Rose
- Naresh Chouhan
Lonza - Upside from Market Disruption (BUY, TP CHF610 [500], 13 pgs)
New analysis of the upcoming disruptions to the biologic CDMO market lead us to upgrade our 2027 Lonza revenues by 10% & our PT to CHF610 (28% upside). We show that recent disruptions to Wuxi & Catalent’s ability to supply the market could mean that 20% of global market CDMO share could be up for grabs. We also show that Lonza inventories have normalised, suggesting a return to normal ordering in 2024. Our AI-derived biologic demand model shows that volume growth should be 12% in 2024 & 2025 and...
- Dominic Rose
- Naresh Chouhan
Novo - 8 Reasons It’s Going to DKK1100 (BUY, TP DKK1100 [850], 18 pgs)
Novo are just too good to bet against. We now increase our 2030 obesity franchise sales to $50bn and most importantly show that sema’ is only 27% of group sales in 2031. Therefore, if sema’ sales halve by 2034, it’s only a ~5% p.a. headwind to group sales 2032-34. Greater visibility on the post-sema outlook is a strong reason for the Novo multiple to be retained into 2025. We see 8 reasons why Novo will hit DKK1100 in the next year, driven by EPS upgrades, increased supply & P3 readouts. We see ...
- Dominic Rose
- Naresh Chouhan
Sanofi - 2024: The Year Biologics Come to COPD (BUY, TP EUR110 [100], ...
Following Dupixent’s Priority Review in COPD and a deep-dive in the space, we upgrade our COPD peak sales by $3bn to $6bn & our Dupixent 2030 sales to $22bn. Our analysis of the significant unmet need, doc surveys & existing/emerging competition leads us to believe that the market is underestimating the very significant opportunity from the 650k US pts who are currently uncontrolled. The priority review could be upside to this year’s numbers, but we believe COPD could add 5% to 2025 EPS which is...
- Dominic Rose
- Naresh Chouhan
Ironwood - Big Catalyst Next Month
With IRWD’s cash cow Linzess set to grow at low single digits in 2024, despite headwinds from the removal of the AMP Medicaid cap and lower commercial pricing, we now eagerly await the topline data from apra’s Phase III STARS trial in March. We conservatively forecast >$1bn (non-risk adjusted) for apra’ in SBS, but have no revenues in for apra’ in aGvHD, which is reading out P2 data in Q1 and could also lead to upgrades. In Q3, we expect to see data from CNP-104 in PBC, making 2024 a potentially...
- Dominic Rose
- Naresh Chouhan
Destiny - Making Positive Changes (Sponsored Research, TP £1.20, 12 pg...
Last week, Destiny reported positive preclinical safety data for XF-73 Dermal, facilitating its progression to clinical evaluation in diabetic foot ulcer (DFU) & serious burn wound infections. We view XF-73 as bringing a novel approach to treating these serious conditions. The company is exploring partnering options for both the Nasal and Dermal formulations, with this likely to be the next catalyst, in our view. NTCD-M3 also continues to progress, with a change of CDMO and a move to a solid for...
- Dominic Rose
- Naresh Chouhan
GSK - It’s Not Sexy But It Is a BUY (TP £19 [£14.50], 14 pgs)
Following new analysis on current growth drivers & upcoming pipeline readouts, we upgrade our 2028 revenues by £2.5bn & believe GSK can deliver 11% CAGR EPS growth 2024-27 leaving us 7% above consensus 2027 EPS. Whilst we believe 2029-31 is an unfillable hole & justifies a low multiple on Pharma, this is more than in the price and near-term momentum will likely drive the shares higher. The Zantac overhang clearing, some pipeline catalysts & the potential for fresh management coupled with near-te...
- Dominic Rose
- Naresh Chouhan
CDMO - Long Lonza, Short Stedim (LONN: BUY, TP CHF500 [465]; DIM: SELL...
With multiple datapoints, management commentary and peer reporting, we now have a better picture of the H124 outlook and more importantly of how the shares may trade. Whilst company commentary is cautiously optimistic on an H2 revenue recovery, the bottoming of order books and modest growth in sequential sales has led to the market becoming increasingly positive on the Life Science Tools space and CDMO’s. While we believe the risks are still significant, we believe the margin risk is now more ma...
- Dominic Rose
- Naresh Chouhan
Sartorius Stedim - Expectations Still Too High (SELL, TP EUR165, 10 pg...
With FY results due on Friday, we continue to believe the DIM expectations need to fall materially. We also question what credence can be placed on any long-term guidance given the high levels of uncertainty in the marketplace and the significant additional capacity that DIM is adding in the coming years, which will impact margins. Moreover, we continue to believe that a rights issue is not off the table. SELL. For access to the full note, please contact Naresh Chouhan ( )
- Dominic Rose
- Naresh Chouhan
Wuxi Biologics - Rare Buying Opportunity (BUY, TP HKD60 [125], 14 pgs)
A combination of our newly formed forecast model and Wuxi Bio’s recent commentary, means we are increasingly confident on Wuxi’s ability to deliver our forecasted 18% sales growth this year and 16% CAGR sales growth to 2028. We see significant upside to our forecast from the $6.5bn milestone pool of which we include only $200m by 2028 and we include zero royalty revenue. Gross margins are likely to remain depressed for some time as a number of new plants come on stream and take time to ramp up. ...
- Dominic Rose
- Naresh Chouhan
Hansa - New TP Reflects Slower Idefirix Ramp (Sponsored Research, TP 1...
Despite 2023 being an eventful year for Hansa, including the advancement of several pipeline programmes, this progress has been overshadowed by the slow patient uptake in kidney transplant, pushing out the anticipated sales inflection to 2027. The company has taken steps to speed up study enrolment in the US, while preserving cash by means of the planned restructuring. In our view, Europe is likely to improve in 2024, with repeat sales expected from all key geographies. Meanwhile, the 5-year sur...
- Dominic Rose
- Naresh Chouhan
Abliva - All Eyes on FALCON Interim Data (Sponsored Research, TP 1.50S...
Abliva is a Swedish biotech developing treatment options for primary mitochondrial diseases (PMD). Its lead asset, KL1333, is undergoing a two-part Phase 2 (FALCON) study in PMD. All 40 patients in Wave 1 completed randomisation in Dec23. An interim analysis is planned for Summer 2024 and will guide on the final enrolment size for FALCON. Full results are expected by early 2026 and could be sufficient to support a regulatory filing, in our view. KL1333 has received Fast Track Designation (US) an...
- Dominic Rose
- Naresh Chouhan
EU Pharma - 2024 Year Ahead (28 pgs)
For EU Pharma, 2024 is likely to be characterised by EPS revisions, a handful of new launches & sluggish EPS growth for a number of names. The relative lack of pipeline catalysts makes forecasting sales and EPS much more important than for 2023. We identify 4 key issues to watch for: 1) Medicaid AMP cap removal, 2) Higher tax costs, 3) Higher debt costs & 4) a handful of very specific company issues that could make a material difference to performance (Novo: Wegovy supply, GSK: litigation, SAN: ...
- Dominic Rose
- Naresh Chouhan
Ironwood - INITIATION - A STAR for 2024 (TP $18, 76% upside, 62 pgs)
Ironwood Pharmaceuticals has two key assets: 1) Linzess is a launched asset (shared with ABBV) with ~$1bn in 2023 sales, which is being managed for profitability, and, 2) apraglutide, a P3 GLP-2 for short bowel syndrome with top-line data due in March 2024. We expect apraglutide to hit ~$1bn in peak sales and drive 15% CAGR sales growth ‘23-28 despite the ~8% hit to Linzess sales in 2024 from the AMP cap removal. 2024 is a catalyst rich year & we expect significant interest in Ironwood as the ye...
- Dominic Rose
- Naresh Chouhan
Roche - D/G to SELL – EPS Risks in 2024 (SELL, TP CHF200 [300], 17 pgs...
We forecast just 2% EPS growth in 2024 vs consensus at 8% due to a number of factors: 1) Slowing growth from Tecentriq, Hemlibra & Ocrevus due to competition & Tecentriq nearing maturity, 2) Downside risk to consensus in the Royalties line, 3) A CHF700m earnings headwind due to higher tax & debt costs. We forecast 2% growth in S&D and R&D which could be lower, but with likely upward inflationary pressure on wage costs, we believe it will be difficult to materially reduce costs. We now forecast j...
- Dominic Rose
- Naresh Chouhan
Novo - Wegovy – 3 More Sources of Upside (BUY, TP DKK850 [800], 15 pgs...
Following the SELECT readout, we are increasingly asked by investors what is next for the Novo investment thesis. We now identify 3 sources of upside to Wegovy consensus forecasts & increase our peak sales to $28bn. We show that, 1) Medicaid is worth $6bn in peak sales & is largely ignored, 2) The lack of Medicare access is likely to have the perverse positive impact of raising Wegovy’s net price & the IRA now has a smaller impact, & 3) Supply into 2024 is likely to be better than consensus is m...
- Dominic Rose
- Naresh Chouhan
Thematic - Obesity Drugs Won’t Change The World
Despite our bullish stance on Novo & the obesity drugs, in this note we aim to show the minimal impact they will have on the broader economy despite recent fears that new obesity drugs will have a material negative impact on a broad range of sectors. We show that these claims are well overblown in the near-term, with only 0.15% of the US population currently on anti-obesity drugs (AODs). Our forecasts, which point to a $50bn US market by 2030, imply that
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.