reports
- Dominic Rose
- Naresh Chouhan
Thematic Research - Quantifying The Impact From Part D Reform
In 2025, Big Pharma will be exposed to further US drug pricing reform as a result of the IRA act. This is the final big change to play out and we calculate there is the potential for a mid-single digit EBIT impact for some companies, but there is material heterogeneity in terms of the magnitude of the impact. There is also the potential for upside for Novo & LLY. However, given the significant complexity in the reimburse-ment changes & in computing the current sales in Medicare Part D, we are re...
- 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
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
EU Pharma - IRA Impact Analysed (Thematic Research, 16pgs)
The IRA is a complex piece of legislation that will materially cut some US drug prices. With the IRA newsflow set to amp up, our analysis of the impact on EU Pharma shows that the IRA has a negligible effect on value. We calculate that the IRA negotiations will reduce sector sales by 1.5% by 2030, driving a 4% EBIT impact, but just a ~1% NPV impact. The only concern we have is if pricing in the commercial channel is also affected. We show that in this scenario, where price in commercial is the s...
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