reports
- Karen Andersen
Trump’s Blueprint to Lower Drug Prices Offers Minor Changes; No Big ...
The Trump administration’s policy paper titled “The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs†offers proposals that don’t impact our moat ratings in the Big Pharma and Biotech industries, and the pricing power of branded drugs in the U.S. still looks strong. The blueprint’s near-term focus largely supports increasing generic drug competition, slightly strengthening Medicare drug price negotiations, improving drug price transparency, and providi...
- Karen Andersen
Trump’s Drug Plan Looks to Modestly Lower Drug Prices, Keeping Big P...
Trump’s policy speech on lowering drug prices didn’t offer many specifics and focused mostly on reducing middleman profits and raising drug prices overseas. Based on the 2019 U.S. government budget proposal and the Council of Economic Advisors white paper on drug policy, we expect only modest negative headwinds to branded drug prices. We continue to view moats within Big Pharma/Biotech industries as intact, supported by strong pricing power for patent protected drugs. We view the branded dru...
- Karen Andersen
Roche's oncology and diagnostics dominance continues to support a wide...
At the annual meeting of the American Association for Cancer Research (AACR), clinical data is emerging that is reinforcing Merck’s leading position in the largest immuno-oncology area of first-line non-small cell lung cancer (NSCLC), but we don’t expect any major changes to our fair value estimates based on the data and continue to view key immuno-oncology players Merck, Bristol, and Roche as undervalued. Additionally, the impressive clinical data at AACR from both Bristol and Merck in the ...
- Karen Andersen
Roche Remains Undervalued Following 1Q; Biosimilars in Europe Countere...
Roche’s overall first-quarter top-line results were in line with our estimates, although biosimilar headwinds to oncology drug Rituxan in Europe are looking stronger than we expected, and the launch of MS drug Ocrevus in the U.S. is performing better than we had expected. We’ve slightly updated our fair value estimate to CHF 325/$41 per share, which also accounts for exchange rate fluctuations since our last update. Our five-year growth estimates (4% top line, 6% bottom line) are above conse...
- Karen Andersen
Merck and Bristol Post Strong Data, Reaffirming Immuno Oncology’s Po...
At the annual meeting of the American Association for Cancer Research (AACR), clinical data is emerging that is reinforcing Merck’s leading position in the largest immuno-oncology area of first-line non-small cell lung cancer (NSCLC), but we don’t expect any major changes to our fair value estimates based on the data and continue to view key immuno-oncology players Merck, Bristol, and Roche as undervalued. Additionally, the impressive clinical data at AACR from both Bristol and Merck in the ...
- Karen Andersen
Slight FVE Change as Roche Enters Tough 2018-19; We're Bullish on Near...
Roche reported solid 2017 results, and our forecast for 2018 (4% top-line growth, 11% core EPS growth) is just above the top end of the firm’s range for top-line results (flat to low-single-digit growth) and bottom-line results (high-single-digit growth). Roche will be facing a full year of Rituxan biosimilar competition in Europe as well as new Herception biosimilar launches, and pressure should intensify as patents on all three of Roche's top biologics expire in the United States by the end ...
- Karen Andersen
Slight FVE Change as Roche Enters Tough 2018-19; We're Bullish on Near...
Roche reported solid 2017 results, and our forecast for 2018 (4% top-line growth, 11% core EPS growth) is just above the top end of the firm’s range for top-line results (flat to low-single-digit growth) and bottom-line results (high-single-digit growth). Roche will be facing a full year of Rituxan biosimilar competition in Europe as well as new Herception biosimilar launches, and pressure should intensify as patents on all three of Roche's top biologics expire in the United States by the end ...
- Karen Andersen
Roche's oncology and diagnostics dominance supports a wide moat rating...
Roche announced positive readouts for two key clinical trials that had been expected before year-end, and we’re maintaining our $41.50/CHF 318 fair value estimate, as we had a bullish take on both programs. We continue to believe cancer drug Tecentriq and hemophilia drug Hemlibra will be key growth drivers for Roche over the next five years and help support Roche’s established wide economic moat. While 2018-19 will be particularly hard hit by biosimilar launches, as patents on all three of R...
- Karen Andersen
Roche's Key Cancer and Hemophilia Readouts Are Positive, Supporting Ou...
Roche announced positive readouts for two key clinical trials that had been expected before year-end, and we’re maintaining our $41.50/CHF 318 fair value estimate, as we had a bullish take on both programs. We continue to believe cancer drug Tecentriq and hemophilia drug Hemlibra will be key growth drivers for Roche over the next five years and help support Roche’s established wide economic moat. While 2018-19 will be particularly hard hit by biosimilar launches, as patents on all three of R...
- Karen Andersen
As First Biosimilars Hit Roche, We’re Bullish on Data Through 1H 201...
Roche’s 6% constant-currency growth in the third quarter (and 5% growth in pharma and diagnostics arms year to date) puts it on track to meet our forecasts for the year, and we’re maintaining our CHF 318 per share/$41.50 per share fair value estimate. The U.S. has driven growth so far in 2017, as new products (Ocrevus and Tecentriq) launch in this geography first, and Europe has turned into a slight headwind for Roche, as biosimilar Rituxan begins to launch and standard pricing pressure in t...
- Karen Andersen
Roche/AbbVie's Venclexta Meets Endpoint in CLL Study; We Remain Bullis...
Roche and partner AbbVie announced that the combination of blood cancer drugs Rituxan and Venclexta in relapsed/refractory chronic lymphocytic leukemia extended progression-free survival over the standard of care (Rituxan plus bendamustine) in the Murano study. While details of the study will be presented at a future meeting (potentially the annual meeting of the American Society of Hematology in December), we’re bullish on the ability of this combination--and the Gazyva/Venclexta combination ...
- Karen Andersen
Strong ESMO Data Supports Our Above-Consensus Expectations for Immuno-...
Data coming out of the European Society for Medical Oncology congress reinforces our higher-than-consensus expectations (20% higher in 2021) for immuno-oncology drugs, with Bristol-Myers Squibb and Roche representing the most undervalued stocks with heavy exposure to this drug class. Further, the strong data reinforces wide moat ratings for these companies as well as for Merck and AstraZeneca as the strong efficacy rates in lethal cancers should support strong pricing power and fast patient adop...
- Karen Andersen
Maintaining Our Roche FVE After Strong 2Q and Ocrevus Launch; Shares U...
We’re maintaining our CHF 318/$41.50 fair value estimate for Roche following strong 5% top-line growth in the first half (driven by new launches of cancer drug Tecentriq and multiple sclerosis drug Ocrevus) and an increase in management’s 2017 guidance (to mid-single-digit top-line and core earnings per share growth). We continue to believe the shares are undervalued ahead of several potential catalysts coming by the end of 2017, including new data from Tecentriq, hemophilia drug emicizumab,...
- Karen Andersen
Political Reality too Much for GOP Healthcare Overhaul; Mixed Impact f...
The political reality of scaling back healthcare coverage for millions of constituents was too much for the U.S. Senate GOP to overcome in passing a major overhaul of the Affordable Care Act. With the loss of more than two “yes†votes for both the initial and revised Senate Republican plan, Senate majority leadership was unable to push a measure that would be appealing to both the moderate and libertarian wings of its caucus. Thus, we believe the probability of a substantive “repeal and re...
- Karen Andersen
Maintaining Our Roche and Chugai FVEs Following Strong Hemophilia Data
Roche and Chugai announced positive data for hemophilia drug emicizumab in two important clinical trials, and we’re maintaining our CHF 318/$41.50 fair value estimate for Roche and JPY 3,780 per share fair value estimate for Chugai. We believe that Roche’s branded drug and diagnostic segments warrant a wide moat, and strong data from Chugai-discovered emicizumab supports Chugai’s narrow moat despite pricing pressure in Japan. Roche shares look undervalued, and we see positive catalysts for...
- Karen Andersen
Senate's Healthcare Bill Shares Great Similarity With the AHCA, but Pa...
While there are challenges to translating the Senate's healthcare bill into law, if successful, we think it would be largely positive for pharmaceutical and devices firms while having a mixed impact on hospitals and managed care firms. After taking great pains to keep their healthcare proposals under wraps to bypass the normal committee consideration process and limit floor debate, Senate Republicans finally revealed their bill on June 22. Despite earlier comments by some senators that their bil...
- Karen Andersen
Perjeta's Lower Market Potential Hits Our Roche FVE, but Shares Remain...
Roche has exited the annual meeting of the American Society of Clinical Oncology with a mix of data, which we think was dominated by disappointing Aphinity data (breast cancer) but also included excellent (albeit expected) Alecensa data in lung cancer and early data as well as hints to a long-term strategy in immuno-oncology. We think the details on Perjeta’s efficacy in adjuvant breast cancer from the Aphinity study have a material impact on the firm's value and are likely to limit Perjeta's ...
- Karen Andersen
Roche's oncology and diagnostics dominance underlies its wide moat rat...
At ASCO, strong immuno-oncology data continues to support our 2021 $28 billion sales estimate for the drugs, above the $22 billion consensus estimate. We view Bristol-Myers Squibb and Roche as the best investment opportunities in IO; we view these companies as well as Merck and AstraZeneca as strengthening their wide moats based on excellent efficacy of IO drugs combined with strong pricing power. Solid IO drug efficacy in several cancers, including gastric (Merck’s Keynote-059), triple negat...
- Karen Andersen
Immuno-Oncology Drugs Post Strong Data at ASCO, Supporting Our 2021 $2...
At ASCO, strong immuno-oncology data continues to support our 2021 $28 billion sales estimate for the drugs, above the $22 billion consensus estimate. We view Bristol-Myers Squibb and Roche as the best investment opportunities in IO; we view these companies as well as Merck and AstraZeneca as strengthening their wide moats based on excellent efficacy of IO drugs combined with strong pricing power. Solid IO drug efficacy in several cancers, including gastric (Merck’s Keynote-059), triple negat...
- Karen Andersen
House GOP Takes First Step to Fulfill Promise on ACA
The third time’s the charm as the House of Representatives voted 217 to 213 to pass the revised American Health Care Act. While this provides the House GOP with a way to make good on its long-standing promise to repeal and replace the Affordable Care Act, the altered bill is unlikely to go very far in the Senate for several reasons. First, most of the revisions pushed the legislation rightward in order to gain the agreement of conservatives in the Freedom Caucus. Considering Republicans in t...
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